UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Cable One, Inc. |
(Name of Registrant as Specified in Its Charter) |
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210 E. Earll Drive Phoenix, AZ 85012 |
April 13, 202016, 2021
Dear Fellow Stockholders:
I am pleased to announce the details of the 20202021 Annual Meeting of Stockholders (the “Annual Meeting”) of Cable One, Inc. (the “Company”). The Annual Meeting will be held at the Company’s headquarters, 210 EastE. Earll Drive, Phoenix, Arizona, 85012, on Friday, May 15, 2020,21, 2021, at 8:00 a.m., local time. It will also be streamed via a live audio webcast available on our investor relations website at ir.cableone.net or by visiting https://services.choruscall.com/links/cabo200515.htmlcabo210521.html.
As we areWe remain sensitive to the continuing public health concerns surrounding the coronavirus (COVID-19) crisis andCOVID-19 pandemic. Accordingly, to support the well-being of our associates and stockholders, I urgewe are recommending that you to join the webcast rather than attending the Annual Meeting in person this year. We are actively monitoring the pandemic and vaccine distributions rates as well as the protocols that Federal, state and local governments may impose. In the event that we are required, or determine it is prudent, to restrict in-person attendance to the Annual Meeting, we will make an announcement as promptly as practicable in advance of the Annual Meeting via a press release that will be posted on our investor relations website and will also be filed with the Securities and Exchange Commission as additional proxy materials.
Included with this letter are a Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the Annual Meeting.
Your vote is important. As always, we encourage you to vote your shares as soon as possible prior to the Annual Meeting. You may vote over the internet as well as by telephone, or, if you requested to receive printed proxy materials, by returning a proxy card or voting instruction form in the envelope provided.
Sincerely,
/s/ Julia M. Laulis
Julia M. Laulis
Chair of the Board, President and
Chief Executive Officer
CABLE ONE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 15, 202021, 2021
The 20202021 Annual Meeting of Stockholders of Cable One, Inc. (the “Company”) will be held at the Company’s headquarters, 210 EastE. Earll Drive, Phoenix, Arizona, 85012, on Friday, May 15, 2020,21, 2021, at 8:00 a.m., local time, for the following purposes:
1. | To elect |
2. | To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the year ending December 31, |
3. | To approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers for |
4. |
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| To transact such other business as may properly come before the meeting or any adjournment thereof. |
The Board of Directors of the Company has fixed the close of business on March 30, 2020April 5, 2021 as the record date for the determination of stockholders entitled to notice of and to vote at the meeting.
It is important that your shares be represented and voted at the meeting. Please sign and return your proxy card or voting instruction form at your earliest convenience. You may also vote your shares by telephone or over the internet. If you choose to vote your shares by telephone or over the internet, please follow the instructions in the enclosed Proxy Statement and proxy card or voting instruction form. You may revoke your proxy at any time before it has been voted at the meeting. You may vote in person at the meeting even if you have previously given your proxy. For shares held through a broker, bank or other nominee, you may vote by submitting voting instructions as provided by your broker, bank or other nominee; however, you may not vote such shares in person at the meeting unless you have a proxy executed in your favor by your broker, bank or other nominee.
By Order of the Board of Directors,
/s/ Peter N. Witty
Peter N. Witty
Secretary
Phoenix, Arizona
April 13, 202016, 2021
TABLETABLE OF CONTENTS
CABLE ONE, INC.
210 E. Earll Dr.
Phoenix, Arizona 85012
PROXYPROXY SUMMARY
This Proxy Summary highlights information described in more detail elsewhere in this Proxy Statement. Proxy Statement. It does not contain all of the information that you should consider, and you should read the entire Proxy StatementProxy Statement carefully before voting.
Cable One, Inc. | |
Date and Time: | Friday, May |
| Cable One, Inc. Headquarters, 210 |
| ir.cableone.netorhttps://services.choruscall.com/links/ |
Record |
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These proxy solicitation materials, including this Proxy Statement and the accompanying proxy card or voting instruction form, were first distributed and made available on or about April 16, 2021 to all stockholders entitled to vote at the Annual Meeting.
Voting Matters and Board Recommendations |
The Board of Directors (the “Board”) of Cable One, Inc. (the “Company, “we,” “us,” “our” or “Cable One”) unanimously recommends you vote as follows:
Proposal | Board Recommendation | Page for Additional Detail | ||||
1. Election of Directors:
The election of |
| FOR each nominated director ☑ | 10 | |||
2. Ratification of Appointment of Independent Registered Public Accounting Firm:
The ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm of our Company for the year ending December 31, | FOR ☑ | 21 | ||||
3. Advisory Vote to Approve Executive Compensation for
The approval, on a nonbinding advisory basis, of the compensation of our named executive officers (“NEOs”) for | FOR ☑ | 46 |
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Company Highlights |
Operational Highlights
■ | We added a record 82,000 residential data customers, which excluded a net of approximately 14,000 additional residential data customers from our acquisition and disposition activity in 2020. That growth resulted in an organic addition (excluding customers added at the time of closing of each of our various acquisitions since 2015) of over 50% more customers in 2020 than we had in the four-and-a-half year period between our spin-off and the end of 2019. |
■ | Our customer-focused pandemic response initiatives included: |
○ | Participated in the Federal Communications Commission’s (the “FCC”) “Keep Americans Connected Pledge”; | |
○ | Creation of video chat applications that enabled our technicians to install and troubleshoot service while keeping our customers and employees safe; | |
○ | Setting up free public Wi-Fi hotspots and offering a low-cost 15 Megabit per second residential data service for the first three months; | |
○ | Member of the “K-12 Bridge to Broadband” initiative, which helps school districts and states provide internet access for students in low-income households; and |
○ | Donated $300,000 to Meals on Wheels and local food banks and $50,000 to K-12 schools for back to school supplies. |
■ | We |
■ | In 2020, we acquired Valu-Net LLC, an all-fiber internet service provider headquartered in Kansas (“Valu-Net”), and completed five strategic investments with a cumulative book value of nearly $750 million to further our vision to provide high-quality broadband service to small cities and large towns throughout rural America. |
Financial Highlights
■ | Net income was | |
■ | Net cash provided by operating activities was | |
■ | Total stockholder return as of December 31, |
Governance Highlights |
■ | 90% of the Board is independent, and our gender and racially diverse Board is comprised of 60% female directors. | |
■ |
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■ | We are | |
■ | We maintain robust executive and non-employee director stock ownership guidelines. | |
■ | Our Clawback Policy allows for the forfeiture and recoupment of incentive compensation in the event of financial restatements, legal or compliance violations and various forms of misconduct. | |
■ | We prohibit hedging and pledging of our securities by all executives, directors and | |
■ | We have a majority voting requirement in uncontested director elections. | |
■ | We do not have a stockholder rights plan. | |
■ | Every member of our Audit, Compensation and Nominating and Governance Committees are independent under New York Stock Exchange (“NYSE”) listing standards and applicable Securities and Exchange Commission (“SEC”) rules. |
Proposal 1: Election of Directors (page |
The following tables present certain information, as of March 30, 2020,April 5, 2021, concerning each nominee for election as a director at, and each director whose term of office will continue after, the Annual Meeting.
Class II Director Nominees | ||||||||||||
Name |
| Age |
| Director Since |
| Principal Occupation |
| Independent |
| Committee Memberships |
| Other Public Company Boards |
Mary E. Meduski | 61 | 2019 | President and Chief Financial Officer of TierPoint, LLC and Cequel III, LLC | ✔ | Audit | 0 | ||||||
Alan G. Spoon |
| 68 |
| 2015 |
| Retired partner at Polaris Partners |
| ✔ |
| Audit; Executive |
| 4 |
Wallace R. Weitz |
| 70 |
| 2015 |
| Founder of Weitz Investment Management, Inc. |
| ✔ |
| Compensation; Executive; Nominating and Governance |
| 1 |
Class I and III Directors Continuing in Office | ||||||||||||
Name |
| Age |
| Director Since |
| Principal Occupation |
| Independent |
| Committee Memberships |
| Other Public Company Boards |
Brad D. Brian |
| 67 |
| 2015 |
| Chair of the law firm Munger, Tolles & Olson LLP |
| ✔ |
| Compensation; Nominating and Governance |
| 0 |
Thomas S. Gayner |
| 58 |
| 2015 |
| Co-Chief Executive Officer of Markel Corporation |
| ✔ (Lead Independent Director) |
| Executive; Nominating and Governance |
| 4 |
Deborah J. Kissire |
| 62 |
| 2015 |
| Retired Ernst & Young LLP partner |
| ✔ |
| Audit |
| 2 |
Julia M. Laulis |
| 57 |
| 2017 |
| Chair of the Board, President and Chief Executive Officer of Cable One |
|
| Executive |
| 0* | |
Thomas O. Might |
| 68 |
| 1995 |
| Retired Executive Chairman of Cable One |
|
| — |
| 0 | |
Kristine E. Miller | 56 | 2019 | Former Senior Vice President, Chief Strategy Officer of eBay | ✔ | Compensation | 0 | ||||||
Katharine B. Weymouth |
| 53 |
| 2015 |
| Chief Operating Officer and President of dineXpert |
| ✔ |
| Audit; Compensation |
| 2 |
Director Nominees | ||||||||||||
Name | Age | Director Since | Principal Occupation | Independent | Committee Memberships | Other Public Company Boards | ||||||
Thomas S. Gayner | 59 | 2015 | Co-Chief Executive Officer of Markel Corporation | ✔ Independent Director) | Executive; Nominating and Governance | 3 | ||||||
Deborah J. Kissire | 63 | 2015 | Retired Ernst & Young LLP partner | ✔ | Audit | 3 | ||||||
Thomas O. Might | 69 | 1995 | Retired Executive Chairman of Cable One | ✔ | — | 0 | ||||||
Kristine E. Miller | 57 | 2019 | Former Senior Vice President, Chief Strategy Officer of eBay | ✔ | Compensation; Nominating and Governance | 0 |
Class I and II Directors Continuing in Office | ||||||||||||
Name | Age | Director Since | Principal Occupation | Independent | Committee Memberships | Other Public Company Boards | ||||||
Brad D. Brian | 68 | 2015 | Chair of the law firm Munger, Tolles & Olson LLP | ✔ | Compensation; Nominating and Governance | 0 | ||||||
Julia M. Laulis | 58 | 2017 | Chair of the Board, President and Chief Executive Officer of Cable One | Executive | 1 | |||||||
Mary E. Meduski | 62 | 2019 | President and Chief Financial Officer of TierPoint, LLC and Cequel III, LLC | ✔ | Audit; Nominating and Governance | 0 | ||||||
Sherrese M. Smith | 49 | 2020 | Partner at the law firm Paul Hastings LLP | ✔ | Nominating and Governance | 1 | ||||||
Wallace R. Weitz | 71 | 2015 | Founder of Weitz Investment Management, Inc. | ✔ | Compensation; Executive | 1 | ||||||
Katharine B. Weymouth | 54 | 2015 | Former Publisher and Chief Executive Officer of Graham Holdings Company (“GHC”) | ✔ | Audit; Compensation | 2 |
Proposal 2: Ratification of Appointment of |
The following table provides summary information regarding the aggregate fees billed to the Company for professional services rendered by PwC for 20192020 and 2018.2019.
2019 | 2018 | 2020 | 2019 | |||||||||||||
Audit Fees | $ | 2,675,539 | $ | 2,017,035 | $ | 2,639,156 | $ | 2,675,539 | ||||||||
Audit-Related Fees | 16,000 | 120,969 | 15,453 | 16,000 | ||||||||||||
Tax Fees | — | — | — | — | ||||||||||||
All Other Fees | 4,000 | 3,000 | 2,700 | 4,000 | ||||||||||||
Total | $ | 2,695,539 | $ | 2,141,004 | $ | 2,657,309 | $ | 2,695,539 |
Executive Compensation |
We have a performance-based compensation philosophy, and the key objectives of our executive compensation program are as follows:
■ | Attract and retain highly qualified and productive executives. |
■ | Motivate executives to enhance our overall performance and profitability through the successful execution of our short- and long-term business strategies, with an emphasis on the long-term. |
■ | Align the long-term interests of our executives and stockholders through meaningful ownership of our stock by executives and by rewarding stockholder value creation. |
■ | Ensure that total compensation opportunities are competitive. |
The following charts show an overview of the components of 20192020 target total direct compensation for our CEO and our other NEOs (except one newly hired NEO) and the percentage that is at-risk.
Proposal 3: Advisory Vote to |
We are asking stockholders to approve an advisory resolution on the compensation of our NEOs as reported in this Proxy Statement. Although the say-on-pay vote is advisory and therefore non-binding, the Board and the Compensation Committee value the input of our stockholders and will review and consider the voting results when making future decisions regarding our executive compensation program. At our 20192020 Annual Meeting of Stockholders, more than 98%nearly 99% of the votes cast were in favor of our say-on-pay proposal.
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Upon the unanimous recommendation of the Board, we are asking stockholders to approve amending and restating our Amended and Restated Certificate of Incorporation (the “Charter”) to declassify the Board beginning with the 2021 Annual Meeting of Stockholders. This change would provide for the annual election of all directors phased-in over a three-year period, as described in this proposal.
Who Can Vote |
Stockholders of record as of the close of business on March 30, 2020April 5, 2021 (the “Record Date”) may vote at the Annual Meeting. Each of your shares—whether held (i) directly in your name as stockholder of record or (ii) in street name—entitles you to one vote with respect to each proposal to be voted on at the Annual Meeting. However, street name stockholders generally cannot vote their shares directly and instead must instruct the broker, bank or nominee how to vote their shares.
How to Cast Your Vote | |
You can vote using any of the following methods: |
Over the internet at www.proxyvote.com or scan the QR code on your proxy card or voting instruction form with your mobile device. We encourage you to vote this way. | |
By toll-free telephone at 1-800-690-6903. | |
By completing and mailing your proxy card or voting instruction form. | |
By attending the Annual Meeting and voting in person. However, due to the continuing public health concerns surrounding the COVID-19 pandemic, you are encouraged to vote in advance utilizing one of the other methods described above and to join the webcast of the Annual Meeting rather that attending in person. Stockholders of record (that is, if your shares are registered in your name and not in “street name”) will be on a list held by the inspector of elections. Street name stockholders must obtain a proxy executed in their favor from the institution that holds their shares, whether it is their brokerage firm, bank or other nominee, and present it to the inspector of elections in order to vote at the Annual Meeting. |
PROXYPROXY STATEMENT
FOR THE 2020 2021 ANNUAL MEETING OF STOCKHOLDERS
MAY15, 2020MAY 21, 2021
This Proxy Statement contains information relating to the Annual Meeting of Cable One, or any adjournments thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. The Board is making this proxy solicitation.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders
to Be Held on May 15, 202021, 2021
Our Proxy Statement and Annual Report to Stockholders are available at
www.proxyvote.com
These proxy solicitation materials, including this Proxy Statement and the accompanying proxy card or voting instruction form, were first distributed and made available on or about April 13, 2020 to all stockholders entitled to vote at the Annual Meeting.
Other Questions and Answers
Q: | Will any other matters be voted on? |
A: | We are not aware of any matters to be voted on other than those referred to in this Proxy Statement. If any other matter is properly brought before the Annual Meeting, Julia M. Laulis and Steven S. Cochran, acting as your proxies, will vote your shares at their discretion. |
Q: | What else should I know about |
A: | If you hold shares in “street name” (that is, your shares are held in a brokerage account by a broker, bank or other nominee, also known as a “beneficial owner”), you should follow the voting instructions provided by your broker, bank or other nominee.
If you wish to vote over the internet or by telephone, your vote must be received by 11:59 p.m., Eastern Time, on the day before the Annual Meeting. After that time, internet and telephone voting will not be permitted, and a stockholder of record wishing to vote who has not previously submitted a signed proxy card or voting instruction form must vote in person at the Annual Meeting. Stockholders of record will be on a list held by the inspector of elections. Street name stockholders must obtain a proxy executed in their favor from the institution that holds their shares, whether it is their brokerage firm, bank or other nominee, and present it to the inspector of elections in order to vote at the Annual Meeting. Voting in person by a stockholder at the Annual Meeting will replace any previous votes submitted by proxy.
Your shares will be voted as you indicate. If you are a stockholder of record and you sign and return a proxy card but do not indicate your voting preferences, Julia M. Laulis and Steven S. Cochran, acting as your proxies, will vote your shares in accordance with the Board’s recommendations specified in the Proxy Summary under “Voting Matters and Board Recommendations.” |
Q: | Can I change my vote? |
A: | Yes. If you are a stockholder of record, you can change your vote or revoke your proxy at any time before the Annual Meeting: |
■ | By entering a new vote over the internet or by telephone by 11:59 p.m., Eastern Time, on the day before the Annual Meeting; |
■ | By returning a properly signed proxy card with a later date that is received at or prior to the Annual Meeting; or |
■ | By voting in person at the Annual Meeting. |
If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your voting instructions in person at the Annual Meeting if you obtain a signed proxy from the record holder (bank, broker or other nominee) giving you the right to vote the shares. Only the latest validly executed proxy that you submit will be counted. | |
Q: | What is a broker non-vote? |
A: | If you hold your shares in street name and do not provide voting instructions to your broker, NYSE rules grant your broker discretionary authority to vote your shares on “routine matters” at the Annual Meeting, including for the ratification of PwC as our independent registered public accounting firm for |
■ | will be voted on Proposal 2 |
■ | will not be voted on Proposal 2 if your broker chooses to not exercise its discretionary authority to vote your shares (resulting in your shares not being represented at the Annual Meeting). |
“Broker non-votes” will be counted as present for purposes of determining a quorum and will have no effect on Proposals 1 and |
Q: | What vote is required to approve a proposal? |
A: | If a quorum is present at the Annual Meeting, the following chart describes the voting requirements for approval and the effect of abstentions and “broker non-votes” on each proposal. Stockholders may cast a “for,” “against” or “abstain” vote with regard to any director nominee or proposal. |
Proposal | Vote Required for Approval | Effect of Abstentions | Effect of Broker Votes | |||
1. Election of Directors | Receipt of a majority of the votes cast at the Annual Meeting, meaning that the number of votes cast “for” a director nominee exceeds the number of votes cast “against” that nominee | No effect | No effect | |||
2. Ratification of Appointment of Independent Registered Public Accounting Firm | Affirmative vote of a majority of the votes cast by the stockholders entitled to vote thereon who are present in person or represented by proxy at the Annual Meeting | No effect | No effect (brokers have discretion to vote on this proposal) | |||
3. Advisory Vote to Approve Executive Compensation for | Affirmative vote of a majority of the votes cast by the stockholders entitled to vote thereon who are present in person or represented by proxy at the Annual Meeting | No effect | No effect | |||
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Q: | What happens if a director nominee who is duly nominated does not receive a majority of the votes |
A: | In accordance with our By-laws, any incumbent director who fails to receive a majority of the votes cast must submit an offer to resign from the Board no later than two weeks after the Company certifies the voting results. In that case, the remaining members of the Board will consider the resignation offer and may either (i) accept the offer or (ii) reject the offer and seek to address the underlying cause(s) of the majority-against vote. The Board must decide whether to accept or reject the resignation offer within 90 days following the certification of the stockholder vote, and, once the Board makes its decision, the Company must promptly make a public announcement of the Board’s decision (including a statement regarding the reasons for its decision in the event the Board rejects the offer of resignation). |
Q: | Who will count the vote? |
A: | Votes cast in person or by proxy at the meeting will be tabulated by the inspector of elections appointed for the meeting, who will determine whether a quorum is present. The inspector of elections need not be a stockholder, and no director or nominee for the election as a director may be appointed the inspector of elections. |
Q: | Where can I find the voting results of the Annual |
A: | We will report the voting results in a Current Report on Form 8-K filed with the SEC within four business days following the Annual Meeting. |
Q: |
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A: | The Annual Meeting will be streamed for stockholders and other interested parties via a live audio webcast available on our investor relations website at ir.cableone.net or by visiting https://services.choruscall.com/links/
As we
If you join the live audio webcast, you will not be able to vote nor will your presence be counted for purposes of determining whether a quorum is present at the Annual Meeting. Accordingly, you are encouraged to vote in advance of the Annual Meeting over the internet, by toll-free telephone or by completing and mailing your proxy card or voting instruction form, as indicated above. In addition, stockholders and other interested parties listening via the live audio webast will not be able to pose questions. |
Q: | What do I need to do to attend the Annual Meeting? |
A: |
Seating at the Annual Meeting will be on a first-come, first-served basis upon arrival at the Annual
Backpacks, cameras, recording equipment and other electronic recording devices will not be permitted inside the Annual Meeting. Failure to follow the Annual Meeting rules or permit inspection will be grounds for exclusion from the Annual Meeting. |
Q: | Can I bring a guest? |
A: | No. In-person attendance at the Annual Meeting is for stockholders only. |
Q: | What is the quorum requirement of the Annual Meeting? |
A: | A majority of the votes entitled to be cast by the outstanding shares of common stock entitled to vote generally on the business properly brought before the Annual Meeting must be present in person or by proxy to constitute a quorum for the Annual Meeting. If you vote, your shares will be part of the quorum. Abstentions and “broker non-votes” will be counted for purposes of determining whether a quorum is present at the Annual Meeting. As of the Record Date, there were |
Q: | Who is soliciting proxies? |
A: | Solicitation of proxies is being made by our management on behalf of the Board through the mail, in person, over the internet or by telephone, without any additional compensation being paid to such members of management. The cost of such solicitation will be borne by us. In addition, we have requested brokers and other custodians, nominees and fiduciaries to forward proxy cards and proxy soliciting material to stockholders, and we will pay their fees and reimburse them for their expenses in so doing. |
Q: | What other information about Cable One is available? |
A: | The following information is available: |
■ | We maintain on our investor relations website, ir.cableone.net, copies of our Annual Report on Form 10-K; Annual Report to Stockholders; Corporate Governance Guidelines; Code of Business Conduct and Ethics; charters of the Audit, Compensation, Executive and Nominating and Governance Committees; Policy Statement Regarding Director Nominations and Stockholder Communications (the “Policy Statement”); and other information about the Company. |
■ | In addition, printed copies of these documents will be furnished without charge (except exhibits) to any stockholder upon written request addressed to our Secretary at 210 E. Earll Drive, Phoenix, Arizona, |
■ | Amendments to, or waivers granted to our directors and executive officers under, the Code of Business Conduct and Ethics, if any, will be posted on our website. |
Q: | Can I receive materials relating to the Annual Meeting electronically? |
A: | To assist us in reducing costs related to the Annual Meeting, stockholders who vote over the internet may consent to electronic delivery of mailings related to future annual stockholder meetings. We also make our Proxy Statements and Annual Reports available online and may eliminate mailing hard copies of these documents to those stockholders who consent in advance to electronic distribution. If you are voting over the internet, you may consent online at www.proxyvote.com when you vote. If you hold shares in street name, please also refer to information provided by the broker, bank or other nominee for instructions on how to consent to electronic distribution. |
PROPOSALPROPOSAL 1: ELECTION OF DIRECTORS
TheOur Board is currently divided into three classes, designated Class I, Class II and Class III. Directors are currently elected by class forIII, with staggered three-year terms, which continue untilsuch that the thirdterm of one class expires at each annual meeting of stockholders. At our 2020 Annual Meeting of Stockholders, our stockholders approved our Amended and Restated Certificate of Incorporation (the “Charter”) to declassify the Board beginning with the Annual Meeting and provide for the annual election of all directors phased in over a three-year period. In accordance with this phase-in period, the nominees listed below and at each subsequent annual meeting are being proposed for election to one-year terms (until the first annual meeting of stockholders next following the director’s election and until the director’s successor is elected and qualified.qualified). As a result, our Board will be fully declassified following our 2023 Annual Meeting of Stockholders. Our Charter and By-laws provide that the number of the directors of the Company will be fixed from time to time by the Board.
There are threefour Class IIIII directors whose term of office expires in 2020.2021. The nominees for election as Class II directors, to serve for a three-yearone-year term until the 20232022 Annual Meeting of Stockholders and until his or hertheir successor is elected and qualified, are MaryThomas S. Gayner, Deborah J. Kissire, Thomas O. Might, and Kristine E. Meduski, Alan G. Spoon and Wallace R. Weitz.Miller. All nominees are currently directors of the Company. Ms. Meduski, who was recommended by Ms. Laulis and another executive officer, was elected by the Board in July 2019.
As discussed in greater detail in Proposal 4 and under “Corporate Governance—Classified Board Structure” below, at the Annual Meeting, we are asking our stockholders to approve amending and restating our Charter to declassify the Board beginning with the 2021 Annual Meeting of Stockholders.
The candidates for election have been nominated by the Board based on the recommendation of the Nominating and Governance Committee. In choosing directors and nominees, the Company seeks individuals of the highest personal and professional ethics, integrity, business acumen and commitment to representing the long-term interests of our stockholders and other stakeholders. In respect of its composition, the Board considers the diversity, skills and experience of prospective nominees in the context of the needs of the Board and seeks directors who are “independent” under applicable law and listing standards. Although our Corporate Governance Guidelines and the Policy Statement do not prescribe specific standards regarding Board diversity, the Board considers, as a matter of practice, the diversity of prospective nominees (including incumbent directors), both culturally and in terms of the variety of viewpoints on the Board, which may be enhanced by a mix of different professional and personal backgrounds and experiences. While diversity and the variety of viewpoints, backgrounds and experiences represented on the Board are always considered, the Board believes that a prospective nominee should not be chosen nor excluded solely or principally because of factors such as race, creed, color, religion, national origin, sex/gender, affectional or sexual orientation, gender identity, age or disability.
The Board is committed to evaluating diverse candidates for every vacancy, and it will include women and persons of color in each candidate pool from which non-incumbent director nominees are selected, consistent with its past practice. In 2019, after an extensive search that included multiple candidates who were women and persons of color,Over the last two years, the Board has elected twothree new female directors.directors, including one racially diverse director.
Directors are elected by the affirmative vote of a majority of the votes cast at the Annual Meeting. The Board knows of no reason that would cause any nominee to be unable to act or to refuse to accept his or hertheir nomination or election. In the event that any nominee for election withdraws or for any reason is not able to serve as a director, the individuals acting as your proxies may vote for such other person as the Board may nominate.
The following table presents certain information, as of March 30, 2020,April 5, 2021, concerning each nominee for election as a director at, and each director whose term of office will continue after, the Annual Meeting.
Name |
| Age |
| Director Since |
| Class |
| Position |
| Expiration of Term as Director | Age | Director Since | Current Class | Position | Expiration of Term as Director | |||||
Julia M. Laulis |
| 57 |
| 2017 |
| I |
| Chair of the Board, President and Chief Executive Officer |
| 2022 | 58 | 2017 | I | Chair of the Board, President and Chief Executive Officer | 2022 | |||||
Brad D. Brian* |
| 67 |
| 2015 |
| I |
| Director |
| 2022 | 68 | 2015 | I | Director | 2022 | |||||
Thomas S. Gayner* |
| 58 |
| 2015 |
| III |
| Lead Independent Director |
| 2021 | 59 | 2015 | III | Lead Independent Director | 2021 | |||||
Deborah J. Kissire* |
| 62 |
| 2015 |
| III |
| Director |
| 2021 | 63 | 2015 | III | Director | 2021 | |||||
Mary E. Meduski* | 61 | 2019 | II | Director | 2020 | 62 | 2019 | II | Director | 2023 | ||||||||||
Thomas O. Might |
| 68 |
| 1995 |
| III |
| Director |
| 2021 | ||||||||||
Thomas O. Might* | 69 | 1995 | III | Director | 2021 | |||||||||||||||
Kristine E. Miller* | 56 | 2019 | III | Director | 2021 | 57 | 2019 | III | Director | 2021 | ||||||||||
Alan G. Spoon* |
| 68 |
| 2015 |
| II |
| Director |
| 2020 | ||||||||||
Sherrese M. Smith* | 49 | 2020 | II | Director | 2023 | |||||||||||||||
Wallace R. Weitz* |
| 70 |
| 2015 |
| II |
| Director |
| 2020 | 71 | 2015 | II | Director | 2023 | |||||
Katharine B. Weymouth* |
| 53 |
| 2015 |
| I |
| Director |
| 2022 | 54 | 2015 | I | Director | 2022 |
* Independent Director
In addition to the information presented below regarding each nominee’s specific qualifications, skills, attributes and experience that led the Board to conclude that he or she should serve as a director, the Board believes that each nominee has demonstrated established records of accomplishment in areas relevant to our strategy and operations and share characteristics identified in our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the Policy Statement as essential to a well-functioning deliberative body, including honesty, integrity, judgment, acumen, ethics, financial literacy, independence, competence, diligence and commitment to the interests of all stockholders to build long-term stockholder value.
All of the directors and nominees have held senior positions as leaders of complex organizations and gained expertise in core management skills, such as strategy and business development, innovation, line operations, brand management, finance, legal, compensation, leadership development, compliance and risk management. They have significant experience in corporate governance and oversight through their positions as senior executives and as directors of public companies and other institutions. These skills and experience are pertinent to our current and evolving business strategies, as well as to the Board’s oversight role, and enable the directors to provide diverse perspectives about the complex issues facing the Company.
The following matrix and biographies highlight significant qualifications, skills, attributes and experience of each of our directors who is a nominee for election as a director or whose term of office will continue after the Annual Meeting. The matrix is a summary only; therefore, it does not include all of the qualifications, skills, attributes and experience that each director offers, and the fact that a particular qualification, skill, attribute or experience is not listed does not mean that a director does not possess it.
Data, Video, Voice / Communications / Media Industry Experience | Leadership Experience | Governance / Outside Board Experience | Financial / Accounting Expertise | Legal Expertise | Diversity | |||||||||
Brad D. Brian | ✔ | ✔ | ✔ | |||||||||||
Thomas S. Gayner | ✔ | ✔ | ✔ | ✔ | ||||||||||
Deborah J. Kissire | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||
Julia M. Laulis | ✔ | ✔ | ✔ | ✔ | ||||||||||
Mary E. Meduski | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||
Thomas O. Might | ✔ | ✔ | ✔ | |||||||||||
Kristine E. Miller | ✔ | ✔ | ✔ | |||||||||||
| ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||
Wallace R. Weitz | ✔ | ✔ | ✔ | |||||||||||
Katharine B. Weymouth | ✔ | ✔ | ✔ | ✔ | ✔ |
Nominees for Election for a Term Expiring at the 20232022 Annual Meeting of Stockholders
Thomas S. Gayner
Mary E. Meduski
Ms. MeduskiMr. Gayner has served as Co-Chief Executive Officer of Markel Corporation, a publicly traded financial holding company headquartered in Glen Allen, Virginia, since January 2016 and as a director since August 2016. He also served as President and Chief FinancialInvestment Officer of Markel Corporation from May 2010 until December 2015 and as a director of TierPoint,Markel Corporation from 1998 to 2003. Since 1990, he has served as President of Markel-Gayner Asset Management Corporation. Previously, he was a certified public accountant at PwC and a Vice President of Davenport & Company LLC a leading national providerin Virginia. Mr. Gayner serves on the boards of information technologyColfax Corporation and data center services, since December 2015. SheGHC. He also serves as President and Chief Financial Officeron the board of Cequel III, LLC, TierPoint’s management company. Prior to joining TierPoint, Ms. Meduski served as Executive Vice President and Chief Financial Officer of Suddenlink Communications from 2006 until 2015. Before joining Suddenlink Communications, Ms. Meduski served as Executive Vice President and Chief Financial Officer of AAT Communications Corp., the largest privately owned wireless tower company in the United States at the time. Prior to joining AAT Communications, she was a Managing Director in the Media and Communications Investment Banking Groups of TD Securities and BankBoston Securities. Ms. Meduski is a member of the Cornell University Board of Trustees.The Davis Series Mutual Funds.
Ms. MeduskiMr. Gayner brings to the Board her significantthe leadership, management oversight and financial skills gained in his role as a senior manager and operating experience in the communications, media, and technology industries.
Alan G. Spoondirector of Markel Corporation as well as other public company boards.
In considering the nomination of Mr. Spoon servedGayner to serve an additional term as a partner at Polaris Partners,director, the other members of the Nominating and Governance Committee (on which Mr. Gayner serves as Chair) and the Board carefully examined and assessed Mr. Gayner’s roles with and obligations to entities other than the Company, including his position as an executive officer of Markel Corporation and his services as a private investment firm that provides venture capital to development-stageboard member of other public companies, between May 2000 and December 2018, including as Partner Emeritus from 2015 to 2018 and Managing General Partner from 2000 to 2010. Mr. Spoon was Chief Operating Officer and a director of The Washington Post Company (now named Graham Holdings Company (“GHC”) and our former corporate parent)parent, GHC. Among the numerous benefits derived from March 1991 through May 2000Mr. Gayner’s service as a director, the Board believes that his experience, perspective and insights all strongly align with our long-term focus; his presence on and helping lead the Board provides stability and continuity in light of the shift in our strategic focus over the last decade to being a broadband-centric connectivity provider as well as in our evaluation, execution and/or integration efforts related to multiple acquisitions and strategic investments; and his deep understanding of and involvement with various stakeholders stemming from his roles at other companies provides a unique and valuable resource to Cable One. The Nominating and Governance Committee and the Board also took note of Mr. Gayner’s perfect attendance record in 2019 and 2020 at meetings of the Board and of the Committees on which he served as Presidentwell as his exceptional attendance record in his nearly six years of The Washington Post Company from September 1993 through May 2000. Priorservice on our Board (having attended all but two of his Board and Committee meetings during that time). Furthermore, Mr. Gayner has vigorously discharged his leadership roles as our Lead Independent Director and as Chair of the Executive and Nominating and Governance Committees, both in preparedness and active participation, and he continues to that, he heldbe a wide varietyvaluable member of positions at The Washington Post Company, including Presidentthe Board with sufficient capacity to devote the necessary time and attention to matters concerning the Board. After a thorough evaluation of Newsweek from September 1989all of these considerations, as well as the leadership, management oversight and financial skills brought to May 1991.the Board by Mr. Spoon began his career at,Gayner, the Nominating and later became a partner of, The Boston Consulting Group.Corporate Governance Committee unanimously recommended and the Board unanimously re-nominated Mr. Gayner for election to the Board.
Mr. SpoonDeborah J. Kissire
Ms. Kissire retired as a partner of Ernst & Young LLP, an independent registered public accounting firm, in July 2015 after a 36-year career. At the time of her retirement, Ms. Kissire served as Ernst & Young’s Vice Chair and East Central Region Managing Partner as well as a member of the Americas Executive Board. Ms. Kissire serves on the boards of DanaherAxalta Coating Systems Ltd., Celanese Corporation Fortive Corporation, IAC/InterActiveCorp and MatchOmnicom Group Inc., and previously served as a director of Cable One from 1991 to 2000. Additionally, heshe has served on the boards of Getty Images, TechTarget, Inc., Human Genome Sciences, TicketmasterGoodwill Industries of Greater Washington and American Management Systems. Previously, Junior Achievement USA.
Ms. Kissire brings to the Board her significant experience in public company financial reporting, accounting and internal control matters.
Thomas O. Might
Mr. Spoon wasMight has been a member of the Board of Regents at the Smithsonian Institution (formerly Vice Chairman). He is a memberCable One since 1995. Prior to his retirement from Cable One in December 2017, Mr. Might served as Executive Chairman in 2017, as Chairman of the MIT Corporation (member of theBoard from 2015 to 2017, as Chief Executive Committee), where he also serves on the board of edX.org (an online education platform).Officer from 1994 to 2016 and as President from 1994 to 2014.
Mr. Spoon’s public company leadership experience gives him insight into business strategy, leadership and executive compensation; and his public company and private equity experience give him insight into technology trends, acquisition strategy and financing. With more than 18 years of experience atMight joined The Washington Post Company including nine years(now named Graham Holdings Company) in 1978 as assistant to publisher Donald E. Graham after serving a directorsummer internship at the newspaper in 1977. He was promoted to Vice President-Production in 1982 and served in that position until 1987, when he became Vice President-Production and Marketing. In 1991, Mr. Might was named Vice President-Advertising Sales. In 1993, Mr. Might was promoted to President and Chief Operating Officer of Cable One. He became President and Chief Executive Officer of Cable One he also has knowledge of Cable One’s business.
Wallace R. Weitzin 1994 and was elected to the Board in 1995. Mr. Might was a Combat Engineer Officer in the U.S. Army from 1972 to 1976.
Mr. Weitz founded the investment management firm Weitz Investment Management, Inc. in 1983 as Wallace R. Weitz & Company and has since served in various roles at Weitz Investment Management, including Chief Investment Officer, President and Portfolio Manager. Mr. Weitz manages the Partners III Opportunity Fund and co-manages the Partners Value Fund and Hickory Fund, each of which is managed by Weitz Investment Management. Mr. Weitz has served as a Trustee of the Weitz Funds since 1986. Mr. Weitz began his career in New York as a securities analyst before joining Chiles, Heider & Co. in Omaha, Nebraska in 1973. There, he spent 10 years as an analyst and portfolio manager. Mr. Weitz is on the board of trustees for Carleton College and serves on various other non-profit boards.
Mr. WeitzMight brings to the Board leadership and management oversight skills as well as intimate knowledge and perspective about the Company’s history, strategic and operational opportunities and challenges, economic and industry trends, and the competitive and financial positioning of the Company based on his substantial finance experience as an investor in public companies.various executive roles at Cable One.
Kristine E. Miller
Ms. Miller served as Senior Vice President, Chief Strategy Officer for eBay, a global ecommerce marketplace, from September 2014 until February 2020. Prior to joining eBay, Ms. Miller was a Partner and Director at Bain & Company, a global management consulting firm, from 1990 until 2014. At Bain, Ms. Miller served in numerous leadership roles, including Chair of Bain’s Compensation and Promotion Committee. Ms. Miller currently serves on the boards of Neiman Marcus Group; Chairish, an online, high-end home furnishings marketplace; and Reflect, a privately held mental health platform. She has served on the boards of the eBay Foundation, Bain & Company, the California Chamber of Commerce and Junior Achievement of the Bay Area.
Ms. Miller brings to the Board her extensive experience, including working with company management and boards, on matters related to strategic leadership, marketing, technology, operations and organizational effectiveness across various industries as well as expertise related to acquisition and integration activities.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”“FOR” THE ELECTION OF EACH OF THE NOMINATED DIRECTORS.
Directors Continuing in Office
Brad D. Brian
Mr. Brian is a national trial lawyer and Chair of the law firm Munger, Tolles & Olson LLP, having practiced there for more than 3839 years. A complex civil and criminal litigator, Mr. Brian is a Fellow in the American College of Trial Lawyers and the International Academy of Trial Lawyers. Mr. Brian has represented numerous Fortune 500 corporations in lawsuits and government investigations. This work has included trials, regulatory investigations and internal corporate investigations. He also has defended companies against more than 40 lawsuits filed under the qui tam provisions of the False Claims Act. Mr. Brian is the co-editor of Internal Corporate Investigations (ABA 4th Ed. 2017). Mr. Brian was named a “Litigator of the Year” by The American Lawyer in 2016. He serves on several non-profit boards, including the board of trustees of the UC Berkeley Foundation.
Mr. Brian brings to the Board his experience as a litigator and corporate advisor and his understanding of legal matters that may arise at Cable One.
Thomas S. Gayner
Mr. Gayner has served as Co-Chief Executive Officer of Markel Corporation, a publicly traded financial holding company headquartered in Glen Allen, Virginia, since January 2016 and as a director since August 2016. He also served as President and Chief Investment Officer of Markel Corporation from May 2010 until December 2015 and as a director of Markel Corporation from 1998 to 2003. Since 1990, he has served as President of Markel-Gayner Asset Management Corporation. Previously, he was a certified public accountant at PwC and a Vice President of Davenport & Company LLC in Virginia. Mr. Gayner serves on the boards of Colfax Corporation, GHC and The Davis Series Mutual Funds. He also serves on the board of the Community Foundation of Richmond, a non-profit entity.
Mr. Gayner brings to the Board the leadership, management oversight and financial skills gained in his role as a senior manager and director of Markel Corporation as well as other public company boards.
Deborah J. Kissire
Ms. Kissire retired as a partner of Ernst & Young LLP, an independent registered public accounting firm, in July 2015 after a 36-year career. At the time of her retirement, Ms. Kissire served as Ernst & Young’s Vice Chair and East Central Managing Partner as well as a member of the Americas Executive Board. Ms. Kissire serves on the boards of Axalta Coating Systems Ltd. and Omnicom Group Inc., and she has served on the boards of Goodwill Industries of Greater Washington and Junior Achievement USA.
Ms. Kissire brings to the Board her significant experience in public company financial reporting, accounting and internal control matters.
Julia M. Laulis
Ms. Laulis has been Chair of the Board since January 2018, Chief Executive Officer and a member of the Board since January 2017 and President of Cable One since January 2015.
Ms. Laulis joined Cable One in 1999 as Director of Marketing – Northwest Division. In 2001, she was named Vice President of Operations for the Southwest Division. In 2004, she became responsible for starting Cable One’s Phoenix Customer Care Center. In 2008, she was named Chief Operations Officer, and in 2012, she was named Chief Operating Officer. In January 2015, she was promoted to President and Chief Operating Officer.
Prior to joining Cable One, Ms. Laulis served in various marketing management positions with Jones Communications. Ms. Laulis began her 35-plus-year career in the cable industry with Hauser Communications.
Ms. Laulis serves on the boards of The AES Corporation, C-SPAN, CableLabs and The Cable Center, and she is a trustee of the C-SPAN Education Foundation. Ms. Laulis was nominated for election as a director of The AES Corporation at its annual meeting of stockholders scheduled on April 23, 2020.
In addition to being the Company’s President and Chief Executive Officer, Ms. Laulis brings to the Board her significant operational and leadership experience as well as intimate knowledge and perspective about the strategic and operational opportunities and challenges, economic and industry trends, and competitive and financial positioning of the Company based on her various executive roles at Cable One.
Thomas O. MightMary E. Meduski
Mr. MightMs. Meduski has beenserved as President and Chief Financial Officer and a director of TierPoint, LLC, a leading national provider of information technology and data center services, since December 2015. She also serves as President and Chief Financial Officer of Cequel III, LLC, TierPoint’s management company. Prior to joining TierPoint, Ms. Meduski served as Executive Vice President and Chief Financial Officer of Suddenlink Communications from 2006 until 2015. Before joining Suddenlink Communications, Ms. Meduski served as Executive Vice President and Chief Financial Officer of AAT Communications Corp., the largest privately owned wireless tower company in the United States at the time. Prior to joining AAT Communications, she was a Managing Director in the Media and Communications Investment Banking Groups of TD Securities and BankBoston Securities. Ms. Meduski is a member of the Cornell University Board of Cable One since 1995. Prior to his retirement from Cable One in December 2017, Mr. Might served as Executive Chairman in 2017, as Chairman of the Board from 2015 to 2017, as Chief Executive Officer from 1994 to 2016 and as President from 1994 to 2014.Trustees.
Mr. Might joined The Washington Post Company in 1978 as assistant to publisher Donald E. Graham after serving a summer internship at the newspaper in 1977. He was promoted to Vice President-Production in 1982 and served in that position until 1987, when he became Vice President-Production and Marketing. In 1991, Mr. Might was named Vice President-Advertising Sales.
In 1993, Mr. Might was promoted to President and Chief Operating Officer of Cable One. He became President and Chief Executive Officer of Cable One in 1994 and was elected to the Board in 1995.
Mr. Might was a Combat Engineer Officer in the U.S. Army from 1972 to 1976.
Mr. MightMs. Meduski brings to the Board her significant leadership, financial and management oversight skillsoperating experience in the communications, media and technology industries.
Sherrese M. Smith
Ms. Smith has served as wella corporate partner at Paul Hastings LLP since August 2013. She is a member of the firm’s media, technology and telecommunications practice and serves as intimate knowledgeVice-Chair of the firm’s data privacy and perspective aboutcybersecurity practice. Prior to joining Paul Hastings, Ms. Smith served as Chief Counsel to Chairman Julius Genachowski at the Company’s history, strategicFCC from July 2009 to June 2013. She was Vice President and operational opportunities and challenges, economic and industry trends,General Counsel of Washington Post Digital from July 2002 to July 2009. Ms. Smith serves on the boards of NortonLifeLock Inc., America’s Public Television Stations (APTS) and the competitive and financial positioningPhilip Merrill College of Journalism at the Company based on his various executive roles at Cable One.University of Maryland.
Kristine E. Miller
Ms. Miller served as Senior Vice President, Chief Strategy Officer for eBay, a global ecommerce marketplace, from September 2014 until February 2020. Prior to joining eBay, Ms. Miller was a Partner and Director at Bain & Company, a global management consulting firm, from 1990 until 2014. At Bain, Ms. Miller served in numerous leadership roles, including Chair of Bain’s Compensation and Promotion Committee. Ms. Miller currently serves on the board of Reflect, a privately held mental health platform, and she has served on the boards of the eBay Foundation, Bain & Company, the California Chamber of Commerce and Junior Achievement of the Bay Area.
Ms. MillerSmith brings to the Board her extensive experience in counseling companies on complex transactional and regulatory issues involving media, communications and technology companies, including working with company managementregarding data privacy and boards, on matters related to strategic leadership, marketing, technology, operations and organizational effectiveness across various industriescybersecurity, as well as expertise related to acquisition and integration activities.her insights having previously served at the FCC.
Wallace R. Weitz
Mr. Weitz founded the investment management firm Weitz Investment Management, Inc. in 1983 as Wallace R. Weitz & Company and has since served in various roles at Weitz Investment Management, including Chief Investment Officer, President and Portfolio Manager. Mr. Weitz manages the Partners III Opportunity Fund and co-manages the Partners Value Fund and Hickory Fund, each of which is managed by Weitz Investment Management. Mr. Weitz has served as a Trustee of the Weitz Funds since 1986. Mr. Weitz began his career in New York as a securities analyst before joining Chiles, Heider & Co. in Omaha, Nebraska in 1973. There, he spent 10 years as an analyst and portfolio manager. Mr. Weitz is on the board of trustees for Carleton College and serves on various other non-profit boards.
Mr. Weitz brings to the Board his substantial finance experience as an investor in public companies.
Katharine B. Weymouth
Ms. Weymouth isserved as Publisher and Chief Executive Officer of The Washington Post, the newspaper division of The Washington Post Company, from February 2008 until October 2014. Prior to becoming Publisher and Chief OperatingExecutive Officer, andMs. Weymouth served in a number of different business roles at The Washington Post, including as Vice President of the advertising department. She began her career as an attorney, practicing for eight years, including as a judicial clerk on the U.S. Court of Appeals for the 9th Circuit for one year, as a litigator at the law firm of Williams & Connolly LLP for several years and in the legal department at The Washington Post for multiple years. Ms. Weymouth is a Senior Advisor to dineXpert, a group buying service for independent restaurants, that launchedafter having previously served in 2018. She was the roles of Chief ExecutiveOperating Officer of Washington Post Media and Publisher of The Washington Post newspaper from February 2008 until October 2014. Ms. Weymouth joined The Washington Post Company in 1996 as Assistant General Counsel of The Washington Post newspaper and held various positions within that organization over the course of 18 years. She held several positions within The Washington Post’s advertising department, including Director of the department’s jobs unit, Director of Advertising Sales and Vice President of Advertising. She also served as Associate Counsel of Washingtonpost.Newsweek Interactive, then the online publishing subsidiary of The Washington Post Company.President. Ms. Weymouth serves on the boards of GHC and Republic Services, Inc. She also serves as a director of the Sequoia Fund and at two private companies—Xometry and Empower. In addition, she is a trustee offor the Philip L. Graham Fund, and as a directorthe Chair of the Board for The Greater Washington Community Foundation for the Greater Capital Region.and an Advisory Board member of FiscalNote.
Ms. Weymouth brings to the Board public company leadership, management oversight and operational expertise gained through her various senior roles with and directorships at public and private companies as well as historical knowledge of our business from her time as a director of GHC.
There are no family relationships among any of our directors and executive officers.
CORPORATECORPORATE GOVERNANCE
Board Committees and Meeting Attendance
The standing committees of the Board consist of the Audit Committee, Compensation Committee, Executive Committee and Nominating and Governance Committee. As discussed in more detail below, each of the Audit, Compensation and Nominating and Governance Committees is comprised entirely of independent directors, consistent with the definition of “independent” under NYSE listing and SEC rules standards applicable to boards of directors generally and board committees in particular.
Each committee of the Board operates under a written charter that is maintained on our website, ir.cableone.net/govdocs, and has the authority to hire at the expense of the Company independent legal, accounting, compensation, financial or other advisors as it deems necessary or appropriate.
The following table summarizes the current membership of theour 10-person Board and each of its committees, as well as the number of times the Board and each committee met during 2019.2020.
Director |
| Board |
| Audit Committee |
| Compensation Committee |
| Executive Committee |
| Nominating and Governance Committee | Board | Audit Committee | Compensation Committee | Executive Committee | Nominating and Governance Committee | |||||
Brad D. Brian* |
| ✔ |
|
|
| ✔ |
|
|
| ✔ | ✔ | ✔ | ✔ | |||||||
Thomas S. Gayner* |
| Lead Independent Director |
|
|
|
|
| Chair | Chair | Lead Independent Director | Chair | Chair | ||||||||
Deborah J. Kissire* |
| ✔ |
| Chair |
|
|
|
|
|
| ✔ | Chair | ||||||||
Julia M. Laulis |
| Chair |
|
|
|
|
| ✔ |
|
| Chair | ✔ | ||||||||
Mary E. Meduski* | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||||||||
Thomas O. Might |
| ✔ |
|
|
|
|
|
|
| |||||||||||
Thomas O. Might* | ✔ | |||||||||||||||||||
Kristine E. Miller* | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||||||||
Alan G. Spoon* |
| ✔ |
| ✔ |
|
| ✔ |
|
| |||||||||||
Sherrese M. Smith* | ✔ | ✔ | ||||||||||||||||||
Wallace R. Weitz* |
| ✔ |
|
|
| Chair |
| ✔ |
| ✔ | ✔ | Chair | ✔ | |||||||
Katharine B. Weymouth* |
| ✔ |
| ✔ |
| ✔ |
|
|
|
| ✔ | ✔ | ✔ | |||||||
Number of Meetings |
| 5 |
| 6 |
| 4 |
| 4 |
| 4 | 6 | 7 | 4 | 4 | 4 |
* Independent Director
Each director attended at least 75% of the total number of meetings of the Board and the committees of the Board on which the director served during his or hertheir term of service in 2019.2020.
As we are a part of the United States’ critical infrastructure, and our continued operation was and is essential to connectivity services that are vital during the COVID‐19 pandemic, during 2020, our Board members also regularly interacted on an informal basis to monitor the evolving situation caused by and the effects of the pandemic on our business and to review and discuss our responses to the pandemic to support the well-being of our employees, customers, suppliers, business partners and others.
Audit Committee
The functions of the Audit Committee include, among other duties, overseeing:
■ | management’s conduct of our financial reporting process (including the development and maintenance of systems of internal accounting and financial controls); |
■ | the integrity of our financial statements; |
■ | our compliance with legal and regulatory requirements; |
■ | the qualifications and independence of our independent registered public accounting firm; |
■ | the performance of our internal audit function; |
■ | the independent registered public accounting firm’s annual audit of our financial statements; and |
■ | the preparation of certain reports required by the rules and regulations of the SEC. |
The Board has determined that all members of the Audit Committee are non-employee, “financially literate,” “independent” directors within the meaning of the listing standards of the NYSE. All members of the Audit Committee have also been determined to be “independent” within the meaning of the SEC rules applicable to service on audit committees. None of the members of the Audit Committee has accepted, other than in such person’s capacity as a Board or Board committee member, any consulting, advisory or other compensatory fee from the Company or its affiliates.
The Board has determined that each of Mses. Kissire and Meduski and Mr. Spoon has the requisite background and experience to be (and is)and was designated an “audit committee financial expert” within the meaning of Item 407(d)(5)(ii) of Regulation S-K due to his or hertheir extensive experience, as discussed under “Proposal 1: Election of Directors.” In addition, the Board has determined that all of the members of the Audit Committee are well grounded in financial matters and are familiar with GAAP. All of the members of the Audit Committee have a general understanding of internal controls and procedures for financial reporting, as well as an understanding of audit committee functions. To the extent that matters come before the Audit Committee that involve accounting issues, the members of the Audit Committee consult with and rely on management, in addition to consulting with external experts, such as the Company’s independent registered public accounting firm, PwC. In addition, the Audit Committee has authority to obtain advice from internal or external legal or other advisors.
Compensation Committee
The functions of the Compensation Committee include, among other duties:
■ | determining and approving the compensation of our Chief Executive Officer; |
■ | reviewing and approving the compensation of our other |
■ | overseeing the administration and determination of awards under our compensation plans; |
■ | overseeing our human capital programs, policies and practices, such as associate development, talent management, organizational culture and diversity and inclusion initiatives (except with respect to matters that are within the scope of responsibility of another committee of the Board); and |
■ | preparing any report on executive compensation required by the rules and regulations of the SEC. |
All members of the Compensation Committee are non-employee directors and have been determined to be “independent” within the meaning of the listing standards of the NYSE and SEC rules applicable to service on compensation committees and, to the extent still applicable, “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).committees.
Executive Committee
The functions of the Executive Committee include, among other duties:
■ | reviewing and providing guidance to the Board and to senior management of the Company regarding the Company’s strategy, operating plans and operating performance; and |
■ | performing such other duties or responsibilities as may be delegated to the Committee from time to time by the Board. |
Nominating and Governance Committee
The functions of the Nominating and Governance Committee include, among other duties:
■ | overseeing our corporate governance practices; |
■ | reviewing and recommending to our Board amendments to our By-laws, Charter, committee charters and other governance policies; |
■ | reviewing and making recommendations to our Board regarding the structure of our various board committees; |
■ | identifying, reviewing and recommending to our Board individuals for election to the Board; |
■ | adopting and reviewing policies regarding the consideration of candidates for our Board proposed by stockholders and other criteria for membership on our Board; |
■ | overseeing the Chief Executive Officer succession planning process, including an emergency succession plan; |
■ | reviewing the leadership structure for our Board; |
■ | overseeing our Board’s annual self-evaluation; and |
■ | overseeing and monitoring general governance matters, including communications with stockholders and regulatory developments relating to corporate governance. |
All members of the Nominating and Governance Committee are non-employee directors and have been determined to be “independent” within the meaning of the listing standards of the NYSE.
Corporate Governance Guidelines and Code of Business Conduct and Ethics
In order to help assure the highest levels of business ethics at Cable One, our Board has adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics, which are maintained on our website, ir.cableone.net/govdocs.
Corporate Governance Guidelines
Our Corporate Governance Guidelines provide a framework for the governance of the Company. Among other things, our Corporate Governance Guidelines address: director qualifications; Board operations, structure and leadership; director compensation; management review and succession; and director orientation and continuing education. The Corporate Governance Guidelines also provide for annual self-evaluations by the Board and its committees.
The Board has not established limits on the number of terms a director may serve prior to his or hertheir 75th birthday; however, no director may be nominated to a new term if he or she would be age 75 or older at the time of the election, unless the Board, upon recommendation of the Nominating and Governance Committee, determines that it is in the best interests of the Company and its stockholders for the director to continue to serve on the Board for an additional term.
Code of Business Conduct and Ethics
Our Code of Business Conduct and Ethics applies to our directors, officers and employees. The Code of Business Conduct and Ethics is designed to deter wrongdoing and contains policies pertaining to, among other things, compliance with applicable laws, rules and regulations; the responsible use of and control over our assets and resources; accuracythe integrity of books, records, reports and financial statements; political activitiescontributions and solicitations;activities; anti-bribery and anti-corruption laws; conflicts of interest and corporate opportunities; employee conduct in the workplace;employment matters, including equal employment opportunity and anti-harassment and non-discrimination; fairness in business practices; antitrust laws; electronic communications and information security; confidential information; securities trading; government investigations; ethics hotline availability; and accountability for adherence to the Code of Business Conduct and Ethics and prompt internal reporting of any possible violations thereof.
Director Nomination Process
Under our By-laws, stockholders of record are able to nominate persons for election to our Board only by providing proper written notice to our Secretary.Secretary at our address set forth in this Proxy Statement. Proper notice must be timely, generally between 90 and 120 days prior to the relevant meeting (or, in the case of annual meetings, prior to the first anniversary of the prior year’s annual meeting), and must include, among other information, the name and address of the stockholder giving the notice, a representation that such stockholder is a holder of record of our common stock as of the date of the notice, certain information regarding such stockholder’s beneficial ownership of our securities and any derivative instruments based on or linked to the value of or return on our securities as of the date of the notice, certain information relating to each person whom such stockholder proposes to nominate for election as a director and a representation as to whether such stockholder intends to solicit proxies. In addition, in the event a stockholder of record desires to bring any other business before the meeting, proper notice must include a brief description of such other business the stockholder proposes to bring before the meeting and the reason for conducting such business.
The Nominating and Governance Committee will consider director candidates recommended by stockholders. Our By-laws provide that any stockholder of record entitled to vote for the election of directors at the applicable meeting of stockholders may nominate persons for election to our Board, if such stockholder complies with the applicable notice procedures.
Our Corporate Governance Guidelines and the Policy Statement contain information concerning the responsibilities of the Nominating and Governance Committee with respect to identifying and evaluating future director candidates. The Policy Statement sets forth our Nominating and Governance Committee’s general policy regarding the consideration of candidates proposed by stockholders; a description of the minimum criteria used by the Nominating and Governance Committee in evaluating candidates for the Board; a description of the Nominating and Governance Committee’s process for identifying and evaluating director nominees (including candidates recommended by stockholders); and the general process for communications between stockholders and the Board. Spencer Stuart, a national outside director search firm that we retained in 2018, assisted in identifying Ms. Miller.Miller, who was elected by the Board in September 2019 and is a nominee for election at the Annual Meeting.
Majority Voting for Directors
Our By-laws provide for majority voting in uncontested director elections, and any incumbent director who fails to receive a majority of the votes cast must submit an offer to resign from the Board no later than two weeks after the Company certifies the voting results. In that case, the remaining members of the Board would consider the resignation offer and may either (i) accept the offer or (ii) reject the offer and seek to address the underlying cause(s) of the majority-against vote. The Board must decide whether to accept or reject the resignation offer within 90 days following the certification of the stockholder vote, and, once the Board makes its decision, the Company must promptly make a public announcement of the Board’s decision (including a statement regarding the reasons for its decision in the event the Board rejects the offer of resignation).
Director Independence
As set forth in our Corporate Governance Guidelines, the majority of directors must be “independent” according to the criteria for independence established by the NYSE. Our Corporate Governance Guidelines also require that all members of each of the standing committees of the Board (other than the Executive Committee) must be independent, including any enhanced independence standards applicable to a particular committee, and none of the members of the standing committees (other than the Executive Committee) may have a material relationship with the Company. In order to determine that a director is independent, the Board must make an affirmative determination that the director satisfies applicable regulatory and NYSE listing requirements to be an independent director of the Company and that the director is free of any other relationship that would interfere with the exercise of independent judgment by such director. The Board has determined that the following directors are independent: Mr. Brian, Mr. Gayner, Ms. Kissire, Ms. Meduski, Mr. Might (beginning in 2021), Ms. Miller, Mr. Spoon,Ms. Smith, Mr. Weitz and Ms. Weymouth. The Board also determined that prior to his retirement as a member of the Board in February 2021, Mr. Spoon was independent.
Executive Sessions of the Non-Management Directors
The listing standards of the NYSE call for the non-management directors of the Company to meet at regularly scheduled executive sessions without management. Mr. Gayner serves as Lead Independent Director of the Board, and he presides at the executive sessions of the Board. In 2019,2020, the non-management directors regularly met in executive sessions outside the presence of any employee director or management, and the non-management directors expect to meet in executive session in 20202021 as appropriate.
Board Leadership Structure
As set forth in our Corporate Governance Guidelines, the Board supports flexibility in determining its leadership structure by not requiring the separation of the roles of Chair of the Board and Chief Executive Officer. The Board believes that the Company and its stockholders are best served by maintaining this flexibility rather than mandating a particular leadership structure.
We currently do not separate the roles of Chair of the Board and Chief Executive Officer as Ms. Laulis serves in both roles. The Board believes that Ms. Laulis’ service as both Chair of the Board and Chief Executive Officer is in the best interests of the Company and that this structure is appropriate because Ms. Laulis possesses in-depth strategic and operational knowledge of the opportunities and challenges facing the Company and has played a critical role in the growth of the Company during her more than 20-year career at Cable One through her experiences as an employee, executive and director of Cable One. Her dual role promotes decisive leadership, accountability and clarity in the overall direction of the Company’s business strategy as well as effective decision-making and strategic alignment between the Board and the Company’s senior management. The Board also believes that this approach facilitates clear and consistent communication of the Company’s strategy to all stakeholders and that, in consultation with our Lead Independent Director, Ms. Laulis is best positioned to develop agendas that focus on matters that merit Board attention.
As provided in our Corporate Governance Guidelines, to ensure the Board’s independence and proper functioning, the Board also appoints a Lead Independent Director who must be independent according to the criteria for independence established by the NYSE. Mr. Gayner currently serves in this capacity. The Lead Independent Director typically chairs executive sessions of Board meetings and consults with Ms. Laulis and senior management regarding issues to be included in Board meeting agendas. The Lead Independent Director is also expected to collaborate with Ms. Laulis, along with the other members of the Executive Committee, in reviewing key operational and other matters and to act as a liaison between Ms. Laulis and the non-management directors. The role of the Lead Independent Director is to provide strong leadership of the non-management directors and help the Board provide effective independent oversight of the Chair of the Board and Chief Executive Officer.
Phase-out of Classified Board Structure
We currently haveare in the process of declassifying our Board over a classified Board. Asthree-year phase-in period as discussed in greater detail in Proposal 4, at1 and below. Pursuant to the Annual Meeting we are asking our stockholders to approve amending and restating our Charter, to declassify the Board beginning with the 2021 Annual Meeting of Stockholders. This change would provide for the annual election of all directors phased-in over a three-year period. If Proposal 4 is approved by the requisite vote of our stockholders, it wouldphase-in will have the following effects:
■ | the nominees elected |
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■ | beginning with the 2022 Annual Meeting of Stockholders, a majority of the directors will be elected annually; and |
■ | following the 2023 Annual Meeting of Stockholders, the entire Board will be elected annually. |
Board’sAs a result, our Board will be fully declassified following our 2023 Annual Meeting of Stockholders.
Board’s Role in Risk Oversight
The Board as a whole actively considers strategic decisions proposed by management, including matters affecting the business strategy and competitive and financial positions of the Company, and monitors the Company’s risk profile. Board meetings are focused on strategic matters affecting major areas of the Company’s business, including operational, execution and competitive risks and risk management initiatives. The Board fulfills certain risk oversight functions through its standing committees. For example, the Audit Committee plays a key role in risk oversight, particularly with respect to financial reporting, accounting, compliance and cybersecuritycompliance matters; the Compensation Committee addresses the risk profile of the Company’s compensation program and arrangements;arrangements as well as various human capital programs, policies and practices; and the Nominating and Governance Committee oversees corporate governance-related risk associated with our governance practices and profile.profile and cybersecurity matters.
Risk oversight activities are supported by internal reporting structures that aim to surface directly to the Board key matters that can affect the Company’s risk exposures as well as by our leadership structure as described above. The Company has a Disclosure Controls Committee that reports directly to the Audit Committee on certain matters relating to the Company’s public disclosures. The Company also has an enterprise risk management (“ERM”) program designed to identify, assess, prioritize, manage and mitigate major risk exposures that could affect our ability to execute on our corporate strategy and fulfill our business objectives. Our ERM program is administered by a risk council made up of members of our senior management supported by subject matter experts within our organization. Representatives of the risk council report directly to the Audit Committee to establish a mutual understanding with management of the effectiveness of the Company’s risk management practices and capabilities, to review the Company’s risk exposure and tolerance and to elevate certain key risks for oversight at the Board level.
Communicating with Directors
In accordance with the Policy Statement, stockholders and other interested persons seeking to communicate with the Board may submit any communications in writing to the Company’sour Secretary, at the address of the Company’s headquarters: 210 E. Earll Drive, Phoenix, Arizona, 85012. Any such communication must state the number of shares beneficially owned by the stockholder making the communication. The Secretary will review all incoming stockholder communications, except for solicitations, junk mail and obviously frivolous or inappropriate communications, and forward such communications, as appropriate, to the full Board or to any individual director or directors to whom the communication is directed.
Annual Meeting Attendance
The Board does not have a policy of requiring directors to attend annual meetings of stockholders; however, the Company generally schedules a Board meeting in conjunction with its annual meeting of stockholders and encourages directors and nominees for director to attend each annual meeting of stockholders. AllTo support the well-being of our employees and stockholders in light of the COVID-19 pandemic, all of our directors except for Mr. Might,virtually attended our 20192020 Annual Meeting of Stockholders.Stockholders, except Ms. Laulis who attended in person.
Compensation Committee Interlocks and Insider Participation
Messrs. Brian and Weitz and Mses. Miller and Weymouth served as members of the Compensation Committee in 2019.2020. None of these individuals has ever been an employee of the Company. During 2019,2020, none of our executive officers served on the board of directors or compensation committee of any other entity for which a member of our Board or Compensation Committee served as an executive officer.
Corporate Governance Policies Related to Compensation and Equity
Please refer to the section entitled “Compensation Discussion and Analysis—Analysis—Corporate Governance Policies” beginning on page 3433 of this Proxy Statement for discussion of our stock ownership guidelines and our policies with respect to prohibiting derivative trading, hedging and pledging, clawbacks and the tax deductibility of compensation.
PROPOSALPROPOSAL 2: RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PwC, an independent registered public accounting firm, has audited the financial statements of our Company for the fiscal year ended December 31, 2019,2020, and has served as our independent auditor since 2014. Our Audit Committee has appointed PwC to serve as our independent registered public accounting firm for the fiscal year ending December 31, 20202021 and recommends that stockholders vote in favor of the ratification of such appointment. Although ratification is not required by our By‑lawsBy-laws or otherwise, the Board is submitting the selection of PwC to our stockholders for ratification as a matter of good corporate governance. If the appointment is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.
We anticipate that representatives of PwC will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so with respect to our financial statements for the fiscal year ended December 31, 20192020 and the firm’s relationship with the Company and will be available to respond to appropriate questions from stockholders.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee’s charter provides that the duties and responsibilities of the Audit Committee include the pre-approval of audit and non-audit services performed by the independent registered public accounting firm in order to assure that the provision of such services does not impair our auditor’s independence. Any proposed services exceeding pre-approved cost levels requires specific pre-approval by the Audit Committee. The term of any pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will periodically review and pre-approve the services that may be provided by the independent registered public accounting firm as well as revise the list of pre-approved services from time to time, based on subsequent determinations.
The Audit Committee will not delegate to management responsibilities to pre-approve services performed by the independent registered public accounting firm. The Audit Committee may delegate pre-approval authority to one or more of its members. The annual audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee will approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, Company structure or other matters. In addition to the annual audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant pre-approval for other audit services, which are those services that only the independent auditor reasonably can provide. The Audit Committee will not approve any non-audit services prohibited by applicable SEC regulations.
Audit-related services are assurance and other services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent registered public accounting firm. The Audit Committee has determined that the provision of audit-related services reflected in the table below does not impair the independence of the independent registered public accounting firm.
The Audit Committee believes that the independent registered public accounting firm can provide tax services to the Company, such as tax compliance, tax planning and tax advice, without impairing such auditor’s independence. However, the Audit Committee will not permit the retention of the independent registered public accounting firm in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code of 1986, as amended (the “Code”), and related regulations.
The Audit Committee may grant pre-approval of those permissible non-audit services classified as “All Other” services that it believes are routine and recurring services and would not impair the independence of the auditor.
Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by the Chief Financial Officer (or other designated officer) and must include a statement from that individual as to whether, in his or hertheir view, the request or application is consistent with the SEC’s rules on auditor independence. All audit fees, audit-related fees and all other fees were preapproved by the Audit Committee.
Audit and Other Fees
The following table provides information regarding the aggregate fees billed to the Company for professional services rendered by PwC for 20192020 and 2018.2019.
2019 | 2018 | 2020 | 2019 | |||||||||||||
Audit Fees (1) | $ | 2,675,539 | $ | 2,017,035 | $ | 2,639,156 | $ | 2,675,539 | ||||||||
Audit-Related Fees (2) | 16,000 | 120,969 | 15,453 | 16,000 | ||||||||||||
Tax Fees | — | — | — | — | ||||||||||||
All Other Fees (3) | 4,000 | 3,000 | ||||||||||||||
All Other Fees (3) | 2,700 | 4,000 | ||||||||||||||
Total | $ | 2,695,539 | $ | 2,141,004 | $ | 2,657,309 | $ | 2,695,539 |
(1) | Audit fees for |
(2) | Audit-related fees for |
| All other fees for |
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”“FOR” THE RATIFICATION OF THE APPOINTMENT OF PWC AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF OUR COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020.2021.
EXECUTIVEEXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Summary
Named Executive Officers
This Compensation Discussion and Analysis describes the compensation of our NEOs named in the 20192020 Summary Compensation Table:
Name | Position | |
Julia M. Laulis | Chair of the Board, President and Chief Executive Officer (“CEO”) | |
Michael E. Bowker | Chief Operating Officer (“COO”) | |
Steven S. Cochran(1) | Senior Vice President and Chief Financial Officer (“CFO”) | |
| Senior Vice President, Marketing and Sales | |
Peter N. Witty | Senior Vice President, General Counsel and Secretary |
(1) | Effective January 1, 2021, Mr. Cochran’s title was changed to Chief Financial Officer. |
(2) | Effective February 24, 2020, Mr. Obermeyer was appointed Senior Vice President, Marketing and Sales. |
20192020 Highlights
We delivered another2020 was an extraordinary year of strongbeset by profound challenges and uncertainty. Despite the impediments created by the COVID-19 pandemic, we produced impressive operational and financial performanceresults in 2019,2020, which resulted in significant value creation for our stockholders, highlightedstockholders. We also launched or expanded various initiatives to deliver on our purpose of keeping our customers connected to what matters most, including in response to the unprecedented events surrounding the pandemic; to strengthen our commitment to diversity, equity and inclusion and corporate social responsibility; and to build our business through strategic investments, acquisitions and organic growth. These efforts are reflected by the following actions and metrics.
Operational Highlightshighlights as well as the operational highlights listed on page 2 of this Proxy Statement.
■ | We |
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Financial Highlights
| Net income was |
■ | Adjusted EBITDA was |
■ | Net cash provided by operating activities was |
■ | Adjusted EBITDA less capital expenditures was |
■ | Total stockholder return as of December 31, |
Executive Compensation and Governance “Best Practices”“Best Practices”
Below is a summary of best practices that we have implemented with respect to the compensation of our NEOs, which we believe support our compensation philosophy and are in the best interests of our Company and our stockholders.
✓ | Our compensation is aligned with a pay-for-performance philosophy where a substantial portion of executive officer compensation is at-risk and tied to objective performance goals. |
✓ | Both annual bonuses and the majority of annual equity incentive awards for |
✓ | The Compensation Committee engages an independent compensation consultant. |
✓ | We maintain robust executive and non-employee director stock ownership guidelines. |
✓ | Our Clawback Policy allows for the forfeiture and recoupment of incentive compensation in the event of financial restatements, legal or compliance violations and various forms of misconduct. |
✓ | We prohibit |
✓ | The Compensation Committee conducts an annual risk assessment of our compensation program. |
✓ | We do not provide any “single trigger” |
✓ | We do not provide gross-up payments on excise taxes under Section 280G or Section 409A of the Code. |
✓ | We provide only limited perquisites to our NEOs. |
✓ | The Cable One, Inc. 2015 Omnibus Incentive Compensation Plan, as amended and restated (the “2015 Plan”) does not allow for the repricing of options or SARs without stockholder |
Our Board and the Compensation Committee greatly value the benefits of maintaining a dialogue with our stockholders to understand their views on our executive compensation program and practices. The Compensation Committee considers the outcome of say-on-pay votes and is devoted to consistently reviewing and enhancing our compensation programs. At our 20192020 Annual Meeting of Stockholders, more than 98%nearly 99% of the votes cast were in favor of our say-on-pay proposal. After evaluating the outcome of the 20192020 say-on-pay vote and based upon input from the Compensation Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), the Compensation Committee determined that our executive compensation program is aligned with our compensation philosophy and our business strategy.
Highlights of Certain Elements of Our 2020 Compensation Program
Our 2020 compensation program supports our performance-based executive compensation philosophy, which is described below, with lower fixed compensation and higher at‐risk compensation. Target total direct compensation remained below our peers while our financial and operating successes and total stockholder return were above industry peers across most major performance metrics that were evaluated. For 2020:
■ | Base Salary – We increased base salaries for each continuing NEO (excluding Mr. Obermeyer) based on individual and Company performance and to address shortfalls compared to competitive market levels. None of our continuing NEOs had received a base salary adjustment since 2018. |
■ | Annual Cash Incentives – 2020 bonus goals metrics remain unchanged and 2020 target bonus percentages for each NEO were set at the same level as the 2019 target bonus percentages, except for Mr. Cochran whose target bonus percentage was increased by five percentage points to more closely align with competitive market levels. |
■ | Long-Term Equity Incentives – The Compensation Committee approved changes to our long-term equity incentives to shift from providing ad hoc awards of time-based RSAs and SARs to a structure where the majority of annual equity grant value is provided through performance-based restricted stock awards (“PSAs”) with the balance in time-based restricted stock awards (“RSAs”). The mix of 2020 equity grants remained more performance-based than typical market practice while also supporting retention. 2020 equity grant values were comprised of approximately 67% PSAs and 33% RSAs for Ms. Laulis and approximately 60% PSAs and 40% RSAs for our other continuing NEOs. |
Our Executive Compensation Program and Practices
The Compensation Committee believes that our executive compensation program is appropriately designed to advance stockholder interests through effective performance-based incentives tied to key financial drivers of long-term stockholder value with retention features. The primary components and associated purposes of our compensation program and associated purposes are as follows:
■ | Base Salary |
■ | Annual Cash Incentives |
■ | Long-Term Equity Incentives |
■ | Other Benefits |
Under our executive compensation program, performance-based incentive compensation comprises a substantial portion of target annual compensation, andwith 70% or more than 70% of average target total direct compensation for each of our NEOs is at-risk. The Compensation Committee considers each component of compensation collectively with other components when establishing the various forms and levels of compensation for our NEOs. In determining the appropriate mix of compensation elements for each NEO, our compensation program seeks to provide a balance between rewarding performance through annual performance-based cash incentive compensation that encourages achieving and exceeding annual goals and milestones and through long-term equity incentive compensation that is designed to advance our long-term growth strategy and align our NEOs’ interests with those of our stockholders.
The following charts show an overview of the components of 20192020 target total direct compensation for our CEO and our other NEOs (except one newly hired NEO) and the percentage that is at-risk.
Objectives of Our Executive Compensation Program
Our performance-based compensation philosophy for executive officers provides incentives to achieve both short- and long-term business objectives, align the interests of our executive officers and long-term stockholders and ensure that we can hire and retain talented individuals in a competitive marketplace.
Key objectives of our executive compensation program are as follows:
■ | Attract and retain highly qualified and productive executives. |
■ | Motivate executives to enhance our overall performance and profitability through the successful execution of our short- and long-term business strategies, with an emphasis on the long-term. |
■ | Align the long-term interests of our executives and stockholders through meaningful ownership of our stock |
■ | Reflect our pay-for-performance philosophy. |
■ | Ensure that total compensation opportunities are competitive. |
Role of the Compensation Committee and the CEO
The Board has delegated to the Compensation Committee the responsibility of overseeing the administration of our compensation plans and the preparation of all related reports and documents required by the rules and regulations of the SEC. The Compensation Committee annually reviews and approves the corporate goals and objectives upon which the executive compensation program is based. The Compensation Committee evaluates the CEO’s performance in light of these goals and objectives. Furthermore, the Compensation Committee reviews and makes recommendations to the Board with respect to any incentive compensation plans, including equity-based plans, to be adopted or submitted to our stockholders for approval.
The Compensation Committee generally meets at least quarterly throughout the year and may meet more often, as required, to address ongoing events. In 2019,2020, the Compensation Committee met four times. Meeting agendas are determined by the Chair of the Compensation Committee with the assistance of our CEO. Our CEO attended all Compensation Committee meetings held during 2019.2020. At the Compensation Committee meetings, our CEO made recommendations to the Compensation Committee regarding the annual base salary, annual cash incentive compensation and equity compensation of our NEOs (other than our CEO)herself). In general, a representative from the Compensation Committee’s independent compensation consultant, FW Cook, and legal counsel also attendsattend Compensation Committee meetings.
Compensation Setting Process
The Compensation Committee determined the compensation of each of our NEOs for 2019.2020. Determinations for our CEO were made after consideration of individual and Company performance for the year, along with an examination of external market data of our industry peer group. For our NEOs other than our CEO, the Compensation Committee’s determinations of compensation were based on the recommendations of our CEO, which reflected consideration of individual and Company performance as well as industry peer group practice. In making its executive compensation decisions, the Compensation Committee does not target a specific percentile for pay, but instead examines external market data of our industry peer group (described in the section entitled “Use of Peer Companies” below) as a guide for making its pay decisions with respect to all pay elements. The factors that influence the amount of compensation awarded include market competition for a particular position; an individual’s experience and past performance inside or outside the Company; compensation history, role and responsibilities within the Company; past and future performance objectives;an individual’s performance; the value of the position within the Company;Company and internal pay equity; succession planning; and the Company’s financial performance; and the relative cost of living in the Phoenix, Arizona market.performance.
Independent Compensation Consultant
The Compensation Committee has the sole authority to retain and dismiss an independent compensation consultant. In 2019,2020, the Compensation Committee engaged FW Cook, a national executive compensation consulting firm, as its independent consultant. FW Cook reviewed and provided recommendations concerning all of the elements of the Company’s executive compensation programs for 2019.2020. FW Cook performs services solely on behalf of the Compensation Committee and has no relationship with the Company or management except as it may relate to performing such services. The Compensation Committee assessed the independence of FW Cook pursuant to the rules of the SEC and the NYSE and concluded that FW Cook is independent and no conflict of interest exists with respect to the services it provided to the Compensation Committee.
Use of Peer Companies
In determining our NEOs’ 20192020 compensation, the Compensation Committee, with the help of FW Cook, compared each element of compensation to that of a related industry peer group. The peer group was primarily comprised of publicly traded cable, internet and telecommunications companies of similar size and was supplemented by technology companies with broadly comparable gross margins and capital expenditures as a percentage of revenues. At the time of the FW Cook compensation study, across key size metrics, we were generally in a 40th-to-75th percentile range versus our peers. Our trailing four quarter revenues and employee headcount were near the 40th percentile, EBITDA was near the 65th percentile and market capitalization value (current and 12-month average) approximated the 75th percentile.
In assessing the competitiveness of compensation provided to our NEOs, FW Cook utilized comparative data disclosed in peer companies’ publicly available proxy statements along with other documents filed with the SEC.
We regularly monitor the composition of our peer group and make changes when appropriate. The following changes were made to the composition of ourOur peer group in 2019: two companies in our industry were added — Altice USA and WideOpenWest; General Communications was acquired by Liberty Interactive, and the combined entity — GCI Liberty — was added as a replacement; and SBA Communications was removed following its conversion into a real estate investment trust.remained unchanged for 2020. The following chart shows the peer groupcompanies developed by us for determiningassessing the competitiveness of our NEOs’ 20192020 compensation.
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Akamai Technologies |
| Gogo | ViaSat |
Altice USA | Cogent Communications | NII Holdings | Vonage Holdings |
ATN International | Consolidated Communications | Shenandoah Telecommunications | WideOpenWest |
Cincinnati Bell(1) | GCI Liberty(2) | Telephone and Data Systems | Zayo Group Holdings |
(1) | Cincinnati Bell has announced that it it expects that its pending acquisition will close in the first half of 2021, after which the company will cease to be publicly traded. |
(2) | GCI Libery was acquired in December 2020 and it is no longer publicly traded. |
In determining the structure of our 20192020 executive compensation program as well as the individual pay levels of our NEOs, the Compensation Committee reviewedconsidered competitive market data provided by FW Cook, whichthat compared the various elements of compensation provided to our NEOs relative to the compensation elements and amounts paid to individuals holding similar positions at companies in our executive compensation peer group. FW Cook worked with management to assess the data and review our compensation practices.
For 2021, the following changes were made to the composition of our peer group: two companies in our industry or with business overlap were added – Iridium Communications and Shaw Communications, and three companies were removed – Gogo (reduced relevance) and NII Holdings and Zayo Group Holdings (lack of data availability because of delisting or acquisition).
Elements of Our Compensation Program
Base Salary
The Compensation Committee reviews executive officer base salaries each year (or otherwise at the time of a new hire or promotion) and makes any adjustments it deems necessary. In setting annual base salary levels, the Compensation Committee takes into account competitive considerations, changes in responsibilities, individual performance, tenure in position, internal pay equity, Company performance, market data for individuals in similar positions, retention, historical practice related to relative cost of living and advice from ourthe Compensation Committee’s independent compensation consultant. The Compensation Committee gives no specific weighting to any one factor in setting the level of base salary and the process ultimately relies on the subjective exercise of the Compensation Committee’s judgment.
As part of the annual review process Mr. Lardyfor 2020, our continuing NEOs received the base salary increases indicated in the table below based on individual and Company performance and to address shortfalls compared to competitive market salary levels that had grown over several years as none of our continuing NEOs had received a base salary increaseadjustment since January 2018 in the case of Ms. Laulis and Mr. Bowker, and since being hired in April and August 2018 in the cases of Messrs. Witty and Cochran, respectively. The 26.1% and 16.9% increases for 2019 based on individual performanceMs. Laulis and Mr. Cochran, respectively, reflected their strong contributions to more closely align him with competitive market salary levels. Basethe Company’s success and the large shortfalls versus their peers’ base salaries for our other NEOs were flat between 2018 and 2019. at the time.
The table below reflects 20192020 base salary amounts as reported inapproved by the 2019 Summary Compensation Table,Committee (including the annualized 20182020 base salary amount for Mr. Obermeyer), 2019 base salary amounts and the dollar and percent change from 20182019 base salary amounts for allcontinuing NEOs.
Name |
| 2019 Base Salary | Annualized 2018 Base Salary | $ Change | % Change | 2020 Base Salary (1) | 2019 Base Salary | $ Change | % Change | |||||||
Julia M. Laulis |
| $575,000 |
| $575,000 |
| — |
| — | $725,000 | $575,000 | $150,000 | 26.1% | ||||
Michael E. Bowker |
| $360,000 |
| $360,000 |
| — |
| — | $385,000 | $360,000 | $25,000 | 6.9% | ||||
Steven S. Cochran |
| $325,000 |
| $325,000 |
| — |
| — | $380,000 | $325,000 | $55,000 | 16.9% | ||||
Eric M. Lardy |
| $253,000 |
| $220,000 |
| $33,000 |
| 15.0% | ||||||||
James A. Obermeyer | $250,000 | N/A | — | — | ||||||||||||
Peter N. Witty |
| $315,000 |
| $315,000 |
| — |
| — | $330,000 | $315,000 | $15,000 | 4.8% |
(1) | In a typical year, our employees are paid on a bi-weekly basis over 26 pay periods. 2020 included an extra pay period, resulting in actual salaries approximately 3.85% higher than in a typical year. The amounts in this column reflect each NEO’s 2020 base salary excluding the impact of the extra pay period. Please refer to the “Salary” column of the 2020 Summary Compensation Table on page 36 of this Proxy Statement for 2020 salary amounts including the impact of the extra pay period. |
Annual Cash Incentive Program
Our annual cash incentive program is intended to motivate and reward our NEOs to achieve and exceed annual goals and milestones that are expected to advance our long-term growth strategy.
Each of our NEOs was awarded a cash incentive opportunity at the beginning of 2019,2020, except Mr. Obermeyer whose award was established in connection with his hiring in February 2020, expressed as a percentage of such executive’s base salary, pursuant to the 20192020 Annual Executive Bonus Plan.Plan (the “2020 Bonus Plan”). The 20192020 Bonus Plan provided for payouts based on our financial performance compared to goals set immediately prior to the beginning of 2019.2020. The table below reflects the target bonus as a percentage of base salary for 2020 and 2019 whichfor each NEO.
Name | 2020 Target Bonus Percentage | 2019 Target Bonus Percentage | % Change | |||
Julia M. Laulis | 100% | 100% | — | |||
Michael E. Bowker | 75% | 75% | — | |||
Steven S. Cochran | 75% | 70% | 5% | |||
James A. Obermeyer | 50% | N/A | — | |||
Peter N. Witty | 50% | 50% | — |
Mr. Cochran’s target bonus percentage amounts were the same as in 2018 for all NEOs.
base salary based on individual performance and to more closely align him with competitive market compensation levels.
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Payouts are capped at 200% of target, and the Compensation Committee retains negativeretained discretion to further reduce any payouts based on its subjective assessment of Company and/or individual performance results. An NEO must generally be employed on the payment date in order to be eligible to receive a bonus payment under the plan.
Bonus payouts under the 20192020 Bonus Plan were subject to the attainment of goals related to Adjusted EBITDA growth and adjusted capital expenditures as a percentage of adjusted total revenues. In order to determine Adjusted EBITDA, we begin with our net income (as defined under GAAP and described in our 20192020 Annual Report on Form 10-K, filed on February 28, 202026, 2021 (the “2019“2020 Form 10-K”)) and adjust for the items as defined and calculated in Annex A of this Proxy Statement. Furthermore, for purposes of the 20192020 Bonus Plan, the Compensation Committee adjusted the calculation of Adjusted EBITDA growth and capital expenditures as a percentage of adjusted total revenues pursuant to a pre-established list of adjustments, which in 2019 related to acquired or divested businesses or assets (i.e., Clearwave, Fidelity, Valu-Net and NewWave operations,our Anniston, Alabama system that was contributed to Hargray (“Anniston”), as applicable) and, designated fiber expansion projects and incremental upgrades, as summarized in the charts showing our performance results under the 20192020 Bonus Plan below.
We believe that the combination of Adjusted EBITDA growth and adjusted capital expenditures as a percentage of adjusted total revenues reflect our performance across several key dimensions, including profitability, cash outflows for capital expenditures and our ability to fund operations and make additional investments with internally generated funds. As such, performance on these measures was the basis for determining earned bonuses under the 20192020 Bonus Plan using the following table (with any values between points on the table determined based on linear interpolation):below:
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| Adjusted EBITDA Growth |
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| 3% |
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| 4% |
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| 5% |
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| 6% |
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| 7% |
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| 8% |
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| 9% |
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| 10% |
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Adjusted Capital Expenditures as a % of Adjusted Total Revenues | Max. | 15 | % |
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| 0% |
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| 65% |
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| 78% |
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| 91% |
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| 104% |
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| 117% |
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| 130% |
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| 156% |
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| 182% |
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| 200% |
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| 200% |
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| 200% |
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| 16 | % |
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| 0% |
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| 61% |
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| 74% |
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| 86% |
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| 98% |
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| 110% |
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| 123% |
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| 147% |
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| 172% |
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| 196% |
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| 200% |
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| 200% |
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| 17 | % |
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| 58% |
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| 69% |
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| 81% |
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| 92% |
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| 104% |
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| 115% |
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| 138% |
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| 161% |
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| 184% |
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| 200% |
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| 200% |
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| 18 | % |
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| 54% |
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| 65% |
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| 75% |
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| 86% |
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| 97% |
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| 108% |
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| 129% |
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| 151% |
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| 172% |
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| 194% |
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Target | 19 | % |
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| 140% |
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| 160% |
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| 180% |
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| 54% |
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| 63% |
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| 72% |
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| 81% |
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| 108% |
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| 126% |
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| 144% |
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| 162% |
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| 56% |
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| 64% |
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| 72% |
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| 96% |
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| 112% |
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| 128% |
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| 144% |
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| 42% |
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| 49% |
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| 56% |
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| 63% |
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| 70% |
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| 84% |
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| 98% |
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| 112% |
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| 126% |
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Thresh. | Target | Max. | ||||||||||||||||||||||||||||||||||||||
<0% | 0% | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% | 9% | 10% | |||||||||||||||||||||||||||||
| Max. | 15 | % | 0% | 65% | 78% | 91% | 104% | 117% | 130% | 156% | 182% | 200% | 200% | 200% | |||||||||||||||||||||||||
Adjusted | 16 | % | 0% | �� | 61% | 74% | 86% | 98% | 110% | 123% | 147% | 172% | 196% | 200% | 200% | |||||||||||||||||||||||||
Capital | 17 | % | 0% | 58% | 69% | 81% | 92% | 104% | 115% | 138% | 161% | 184% | 200% | 200% | ||||||||||||||||||||||||||
Expenditures | 18 | % | 0% | 54% | 65% | 75% | 86% | 97% | 108% | 129% | 151% | 172% | 194% | 200% | ||||||||||||||||||||||||||
as a | Target | 19 | % | 0% | 50% | 60% | 70% | 80% | 90% | 100% | 120% | 140% | 160% | 180% | 200% | |||||||||||||||||||||||||
% of | 20 | % | 0% | 45% | 54% | 63% | 72% | 81% | 90% | 108% | 126% | 144% | 162% | 180% | ||||||||||||||||||||||||||
Adjusted | 21 | % | 0% | 40% | 48% | 56% | 64% | 72% | 80% | 96% | 112% | 128% | 144% | 160% | ||||||||||||||||||||||||||
Total | 22 | % | 0% | 35% | 42% | 49% | 56% | 63% | 70% | 84% | 98% | 112% | 126% | 140% | ||||||||||||||||||||||||||
Revenues | 23 | % | 0% | 30% | 36% | 42% | 48% | 54% | 60% | 72% | 84% | 96% | 108% | 120% | ||||||||||||||||||||||||||
Thresh. | 24 | % | 0% | 25% | 30% | 35% | 40% | 45% | 50% | 60% | 70% | 80% | 90% | 100% |
On March 6, 2020,5, 2021, the Compensation Committee certified the results of the performance goals and approved a performance factor of 144.1%200% for the 20192020 Bonus Plan based on Adjusted EBITDA growth of 6.8%12.0% and adjusted capital expenditures as a percentage of adjusted total revenues of 18.2%18.8%. The Compensation Committee applied the following pre-established adjustments described above to the performance results under the 20192020 Bonus Plan:
Adjusted EBITDA Growth (in millions) | Adjusted EBITDA Growth (in millions) | Adjusted Capital Expenditures (“Capex”) as a % of Total Revenues (in millions) | Adjusted EBITDA Growth (in millions) | Adjusted Capital Expenditures (“Capex”) as a % of Adjusted Total Revenues (in millions) | ||||||||||
2019 Publicly Reported Adjusted EBITDA (1) | $ | 569.0 | 2019 Publicly Reported Capex (1) | $ | 262.4 | |||||||||
2020 Publicly Reported Adjusted EBITDA (1) | $674.1 | 2020 Publicly Reported Capex (1) | $293.2 | |||||||||||
Adjustment for EBITDA Related to Acquired Operations and Designated Fiber Expansion Projects | $ | (33.5 | ) | Adjustment for Capex Related to Acquired Operations, Designated Fiber Expansion Projects and Incremental Upgrades | $ | (60.2 | ) | $(0.9) | Adjustment for Capex Related to Acquired Operations, Designated Fiber Expansion Projects and Incremental Upgrades | $(44.6) | ||||
2020 Adjusted EBITDA, as Adjusted | $673.2 | 2020 Capex, as Adjusted | $248.6 | |||||||||||
2019 Publicly Reported Adjusted EBITDA (2) | $569.0 | 2020 Publicly Reported Total Revenues (1) | $1,325.2 | |||||||||||
Adjustment for EBITDA Related to Acquired Operations, Divestitures and Designated Fiber Expansion Projects | $32.3 | Adjustment for Revenue Related to Acquired Operations and Designated Fiber Expansion Projects | $(5.2) | |||||||||||
2019 Adjusted EBITDA, as Adjusted | $ | 535.5 | 2019 Capex, as Adjusted | $ | 202.1 | $601.3 | 2020 Total Revenues, as Adjusted | $1,320.0 | ||||||
2018 Publicly Reported Adjusted EBITDA | $ | 500.8 | 2019 Publicly Reported Total Revenues (1) | $ | 1,168.0 | |||||||||
Adjustment for Designated Fiber Expansion Projects | $ | 0.5 | Adjustment for Total Revenues Related to Acquired Operations and Designated Fiber Expansion Projects | $ | (59.3 | ) | ||||||||
2018 Adjusted EBITDA, as Adjusted | $ | 501.3 | 2019 Publicly Reported Total Revenues, as Adjusted | $ | 1,108.7 | |||||||||
Adjusted EBITDA Growth | 6.8 | % | Adjusted Capex as a Percentage of Total Revenues | 18.2 | % | 12.0% | Adjusted Capex as a % of Adjusted Total Revenues | 18.8% |
Note: |
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(1) | Publicly reported amounts for 2020 include Valu-Net operations and exclude Anniston operations for the periods beginning July 1, 2020 and October 1, 2020, respectively, the dates on which each was acquired or divested, as applicable. |
(2) | Publicly reported amounts for 2019 include Clearwave and Fidelity operations for the periods beginning January 8, 2019 and October 1, 2019, respectively, the dates on which each was acquired. |
The Compensation Committee approved the following bonus payments under the 20192020 Bonus Plan based on the 20192020 performance results and performance factor for our NEOs:
Name |
| Target Bonus Percentage |
| Target Bonus |
| Performance Factor (as a Percentage of Target) |
| Bonus Payout | Target Bonus Percentage | Target Bonus | Performance Factor (as a Percentage of Target) | Bonus Payout | ||||
Julia M. Laulis |
| 100% |
| $575,000 |
| 144.1% |
| $828,459 | 100% | $725,000 | 200% | $1,450,000 | ||||
Michael E. Bowker |
| 75% |
| $270,000 |
| 144.1% |
| $389,015 | 75% | $288,750 | 200% | $577,500 | ||||
Steven S. Cochran |
| 70% |
| $227,500 |
| 144.1% |
| $327,782 | 75% | $285,000 | 200% | $570,000 | ||||
Eric M. Lardy |
| 50% |
| $126,500 |
| 144.1% |
| $182,261 | ||||||||
James A. Obermeyer | 50% | $106,557 (1) |
| 200% | $213,115 | |||||||||||
Peter N. Witty |
| 50% |
| $157,500 |
| 144.1% |
| $226,926 | 50% | $165,000 | 200% | $330,000 |
(1) | The target bonus amount was pro-rated based on Mr. Obermeyer’s start date. |
Long-Term Annual Equity Incentive
The Compensation Committee considers its long-term equity incentive programincentives to be a critical component of the Company’s executive officer compensation program as it motivatesthey motivate and rewardsreward executive officers over the long-term and further aligns thealign their interests of our executives with those of our stockholders. Our historical practice iswas to grant our annual equity awards in the form of PSAs in early January each year. In addition, the Compensation Committee approveswould approve grants of equity awards in the form of RSAs and SARs to, among other things, further support direct alignment with the interests of our long-term stockholders, promote the retention of management and key employees as well as for new hires, promotions and other special circumstances.
For 2020, the Compensation Committee approved changes to our long-term equity incentives to shift from providing ad hoc awards of time-based RSAs and SARs to a structure where a majority of annual equity grant value is provided through PSAs with the balance provided through time-based RSAs. The mix of 2020 equity grants remains more performance-based than typical market practice while encouraging retention. The 2020 long-term equity grants were comprised of approximately 67% PSAs and 33% RSAs for Ms. Laulis and approximately 60% PSAs and 40% RSAs for our other continuing NEOs. The 2020 target equity grants values were near the 50th percentile for our continuing NEOs.
Equity grants to our NEOs are described in greater detail in the 20192020 Grants of Plan-Based Awards and the Outstanding Equity Awards at Fiscal Year-End tables beginning on pages 3938 and 40,39, respectively, of this Proxy Statement.
20192020 PSA Grants
For 2019,2020, the Compensation Committee granted our NEOs PSAs under the 2015 Plan. The PSAs granted in 20192020 were subject to the attainment of the same goals and performance targets related to Adjusted EBITDA growth and adjusted capital expenditures as a percentage of adjusted total revenues as bonuses under the 20192020 Bonus Plan because the Compensation Committee viewed these metrics as key indicators of our performance, as further described in the section entitled “Annual Cash Incentive Program” above. The decision to use the same performance measures for the annual cash bonus plan and PSAs was based on: (1) the belief that these metrics are the bestcompelling measures of performance and are principle drivers of stockholder value; and (2) challenges encountered and expected in setting and tracking meaningful multi-year performance goals given the company’s organic and inorganic growth and strategy, as highlighted by the acquisitions of ClearwaveCompany’s acquisition, strategic investment and Fidelity indivestiture activity since 2019. While earned over a one-year performance period, the PSAs cliff-vest on the third anniversary of the grant date, which supports retention, discourages executive officers from taking excessive risks for short-term gains and fosters alignment with long-term stockholders as the value delivered ultimately is contingent on three-year stock price performance.
Ms. LaulisThe continuing NEOs each received a 20192020 PSA grant with a target grant date fair value of approximately 100% of her base salary and Messrs. Bowker, Cochran, Lardy and Witty received 2019 PSA grants with a target grant date fair value of approximately 50% of their base salaries. The target number of PSAs was calculated by takingas reflected in the applicable percentage of each NEO’s base salary for 2019 and dividing it by the closing price of our common stock on the trading day immediately prior to the grant date, January 2, 2019, of $803.24 (rounded down to the nearest full share).table below. The PSAs are subject to the terms and conditions of the 2015 Plan as well as an award agreement between the Company and each NEO. PSAs earned based on the achievement of the performance goals described above with respect to 20192020 are scheduled to cliff-vest on January 3, 2022,2023, generally subject to continued service with the Company through such date.
On March 6, 2020,5, 2021, the Compensation Committee certified the results of the performance goals and approved a performance factor of 144.1%200% for the 20192020 PSA grants based on Adjusted EBITDA growth of 6.8%12.0% and adjusted capital expenditures as a percentage of adjusted total revenues of 18.2%18.8%. The Compensation Committee applied the pre-established adjustments described in the section entitled “Annual Cash Incentive Program” above to the performance results for the 20192020 PSAs. The Compensation Committee approved the following 20192020 PSA performance results and performance factor for our continuing NEOs:
Name |
| Target Grant Date Fair Value of PSAs (1) |
| Target Number of PSAs |
| Maximum Number of PSAs |
| Performance Factor (as a % of Target) |
| Earned PSAs (2) | Target Grant Date Fair Value of PSAs (1) | Target Number of PSAs | Maximum Number of PSAs | Performance Factor (as a % of Target) | Earned PSAs (2) | |||||
Julia M. Laulis |
| $580,551 |
| 715 |
| 1,430 |
| 144.1% |
| 1,030 | $1,000,025 | 652 | 1,304 | 200% | 1,304 | |||||
Michael E. Bowker |
| $181,879 |
| 224 |
| 448 |
| 144.1% |
| 322 | $400,317 | 261 | 522 | 200% | 522 | |||||
Steven S. Cochran | $164,016 | 202 | 404 | 144.1% | 291 | $400,317 | 261 | 522 | 200% | 522 | ||||||||||
Eric M. Lardy |
| $127,478 |
| 157 |
| 314 |
| 144.1% |
| 226 | ||||||||||
Peter N. Witty | $159,144 | 196 | 392 | 144.1% | 282 | $300,621 | 196 | 392 | 200% | 392 |
(1) | Amounts in this column represent the grant date fair value of the PSA awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“Topic 718”). |
| Earned PSAs are subject to service-based vesting conditions through January 3, |
20192020 RSA Grants
For 2019,2020, the Compensation Committee approved RSA grants of 350326 shares to Ms. Laulis, and 200163 shares each to Messrs. Bowker and Cochran, Lardy and 130 shares to Mr. Witty, all of which vest in equal annual installments over four years. The grant date fair value of each RSA grant (computed in accordance with Topic 718) was as follows: Ms. Laulis, $284,186, and$500,012; Messrs. Bowker and Cochran, Lardy$250,006; and Mr. Witty, $162,392. These$199,391.
The Compensation Committee also approved two RSA grants were awarded in orderconnection with the hiring of Mr. Obermeyer—an initial RSA award with a targeted value equal to recognize strong individual performanceapproximately three times his base salary on his hire date and encourage retention.a replacement RSA award in respect of equity Mr. Obermeyer forfeited with his prior employer. Mr. Obermeyer’s grant was for an aggregate of 507 shares with a grant date fair value (computed in accordance with Topic 718) of $781,246. 427 RSAs are scheduled to vest on April 1, 2023 and 80 RSAs are scheduled to vest in equal annual installments over four years beginning on April 1, 2021 (in each case, generally subject to his continued employment with us through the applicable vesting date).
20192020 SAR Grants
For 2019, theThe Compensation Committee approved grantsa grant of 2,000 SARs to Ms. Laulis and 1,500 SARs each to Messrs. Bowker, Cochran, Lardy and WittyMr. Obermeyer in order to recognize strong individual performance, encourage retention and support alignmentconnection with long-term stockholder interests. The 2019his hiring. This SAR awards wereaward was granted at fair market value on the date of grant, vestvests in equal annual installments over four years and havehas a ten-year term (generally subject to the NEO’sMr. Obermeyer’s continued employment with us through the applicable vesting date). The grant date fair value of eachthis SAR grantaward (computed in accordance with Topic 718) was as follows: Ms. Laulis, $382,840, and Messrs. Bowker, Cochran, Lardy and Witty, $287,132.$746,240.
2017 PSA Grants
In 2017, the Compensation Committee granted certain of our NEOs PSAs under the 2015 Plan. The PSAs granted in 2017 were based on three-year cumulative Adjusted EBITDA less capital expenditures.
In order to determine Adjusted EBITDA less capital expenditures, we begin with our net income (as defined under GAAP and described in the 2019 Form 10-K) and adjust for the items as defined and calculated in Annex A of this Proxy Statement. Furthermore, for purposes of the 2017 PSAs, the Compensation Committee adjusted the calculation of Adjusted EBITDA less capital expenditures pursuant to a pre-established list of adjustments, which related to acquired businesses or assets (i.e., Clearwave, Fidelity and NewWave operations), designated fiber expansion projects and changes in accounting principles, as summarized in the chart showing three-year cumulative Adjusted EBITDA less capital expenditures results below. As such, performance on these measures was the basis for determining earned 2017 PSAs using the following table (with any values between points on the table determined based on linear interpolation):
Payout % of Target | Three-Year Cumulative Adjusted EBITDA less Capital Expenditures (in millions) | |||
Thres. | 0% | <$622.0 | ||
25% | $622.0 | |||
50% | $665.0 | |||
100% | $732.0 | |||
150% | $802.0 | |||
Max. | 200% | $849.0 |
On March 6, 2020, the Compensation Committee certified the results of the performance goals and approved a performance factor of 138.6% for the 2017 PSA grants based on the following results and applying the pre-established adjustments to the performance results indicated:
Three-Year Cumulative Adjusted EBITDA less Capital Expenditures (“Capex”) Results (in millions) | ||||
Publicly Reported Adjusted EBITDA | $ | 1,512.9 | ||
Adjustment for EBITDA Related to Acquired Operations and Designated Fiber Expansion Projects | $ | (240.3 | ) | |
Publicly Reported Adjusted EBITDA, as Adjusted | $ | 1,272.6 | ||
Publicly Reported Capex | $ | 659.5 | ||
Adjustment for Capex Related to Acquired Operations, Designated Fiber Expansion Project Capex and Gains/Losses Associated with Changes in Accounting Principles, Practices or Interpretations | $ | (173.0 | ) | |
Publicly Reported Capex, as Adjusted | $ | 486.5 | ||
Adjusted EBITDA less Capex, as Adjusted | $ | 786.0 |
Note: All totals were calculated using exact values. Minor differences may exist due to rounding.
The Compensation Committee approved the following 2017 PSA performance results for our NEOs:
Name |
| Target Number of PSAs |
| Maximum Number of PSAs |
| Performance Results (as a % of Target) |
| Earned PSAs |
Julia M. Laulis |
| 884 |
| 1,768 |
| 138.6% |
| 1,225 |
Michael E. Bowker |
| 221 |
| 442 |
| 138.6% |
| 306 |
Steven S. Cochran | — | — | — | — | ||||
Eric M. Lardy |
| 160 |
| 320 |
| 138.6% |
| 221 |
Peter N. Witty | — | — | — | — |
Other Benefits
Our NEOs are entitled to employee benefits generally available to all full-time employees of the Company, including health and welfare benefits. In designing these offerings, we seek to provide an overall level of benefits that is competitive with what is offered by similar companies in the markets in which we operate. In addition, our NEOs are eligible to participate in certain retirement and deferred compensation plans as described in more detail below under “Retirement Benefits.”
Perquisites
We provide our NEOs with very limited perquisites. In 2019,2020, we paid certain costs in connectionprovided relocation and temporary housing assistance for Mr. Obermeyer pursuant to his offer letter with the Company, for which we did not provide any gross-up payments; we made matching charitable contributions for donations from all of our employees to the Company’s fund that supports employees needing financial assistance following natural disasters, which included a donation by Ms. Laulis’ spouse’s travel to and participation in a sales incentive trip and an industry conferenceLaulis; and we reimbursed our NEOs for amounts paid for Mr. Bowker to attend an executive training course. We also reimbursed Ms. Laulis an amount representing part of the cost of our data, video and voice service in Phoenix, Arizona, a benefit that we provide at no cost to all of our employees who reside in one of our markets. For more information regarding these payments, please refer to the “All Other Compensation” column of the 20192020 Summary Compensation Table on page 3736 of this Proxy Statement. We did not provide any other perquisites to our NEOs.
Severance Benefits
Consistent with our policy,practice, we have not entered into any employment or severance agreements that provide for payments or benefits in the event of involuntary termination with any of our NEOs. As such, we do not have any agreements with any of our NEOs that provide cash payments upon a termination of employment or a change of control of the Company (except for the Cable One, Inc. Supplemental Executive Retirement Plan (the “Cable One SERP”) described below in the “Retirement Benefits” section beginning on page 41 of this Proxy Statement).
We do not provide any “single trigger” change of control benefits nor any gross-up payments on excise taxes under Section 280G or Section 409A of the Code. In order to encourage continuity of the executive officers in the event of a change of control and promote the successful execution of the Company’s short- and long-term business strategies, our outstanding equity awards contain a “double trigger” provision, which means the awards only vest upon a qualifying termination of employment that occurs within 18 months following a change of control, as described below in the “Potential Payments Upon Termination or Change of Control” section beginning on page 4443 of this Proxy Statement.
Retirement Plans and Agreements
Qualified Defined Contribution Plan
We maintain the Cable One 401(k) Plan, which is a tax-qualified defined contribution plan. We provide matching contributions on up to 5% of an employee’s eligible compensation, up to the salary limit applicable to tax-qualified plans ($280,000285,000 in 2019)2020). Employees, including our NEOs, are eligible to receive matching contributions after one year of service, with matches fully vested when made.
Nonqualified Supplemental Executive Retirement Plan and Nonqualified Deferred Compensation Plans
We maintain a nonqualified supplemental executive retirement plan and a nonqualified deferred compensation plan. Contributions to or deferrals under these plans were not permitted after December 31, 2015.
Explanation and discussion of these frozen retirement plans can be found in the narratives accompanying the Pension Benefits and Nonqualified Deferred Compensation tables beginning on pages 42 and 43, respectively, of this Proxy Statement.
20202021 Compensation Actions
20202021 Base Salaries
As part of the annual review process, effective January 1, 2020,2021, our NEOs received the base salary increases indicated in the table below based on individual and Company performance and to address shortfalls compared to competitive market salary levels. Ms. Laulis and Mr. Bowker havemade a request to the Compensation Committee that she not receivedreceive a base salary increases since January 2018, and Messrs. Cochran and Witty have not receivedincrease for 2021; however, the Compensation Committee approved a modest increase despite such request in order to bring her base salary increases since they joinedcloser to the Companypeer median in April 2018light of her individual performance and August 2018, respectively.the Company’s exceptional performance during 2020.
Name | 2021 Base Salary | 2020 Base Salary | $ Increase | % Increase | ||||
Julia M. Laulis | $740,000 | $725,000 | $15,000 | 2.1% | ||||
Michael E. Bowker | $395,000 | $385,000 | $10,000 | 2.6% | ||||
Steven S. Cochran | $395,000 | $380,000 | $15,000 | 3.9% | ||||
James A. Obermeyer | $258,000 | $250,000 (1) |
| $8,000 | 3.2% | |||
Peter N. Witty | $338,000 | $330,000 | $8,000 | 2.4% |
(1) | The 2020 base salary amount for Mr. Obermeyer is annualized. |
Name |
| 2020 Base Salary (1) | 2019 Base Salary | $ Increase | % Increase | |||
Julia M. Laulis |
| $725,000 |
| $575,000 |
| $150,000 |
| 26.1% |
Michael E. Bowker |
| $385,000 |
| $360,000 |
| $25,000 |
| 6.9% |
Steven S. Cochran |
| $380,000 |
| $325,000 |
| $55,000 |
| 16.9% |
Eric M. Lardy |
| $265,000 |
| $253,000 |
| $12,000 |
| 4.7% |
Peter N. Witty |
| $330,000 |
| $315,000 |
| $15,000 |
| 4.8% |
|
|
20202021 Annual Executive Bonus Plan
At the end of 2019,2020, the Compensation Committee approved the 20202021 Annual Executive Bonus Plan (the “2020“2021 Bonus Plan”). Consistent with the 20192020 Bonus Plan, each of our NEOs was awarded a cash incentive opportunity at the beginning of 20202021 that provides for payouts based on our financial performance compared to goals set immediately prior to the beginning of 2020,2021, with the target bonus percentage for each NEO set at the same level as the 20192020 target bonus percentages indicated above, except for Mr. Cochran whose target bonus percentage was increased from 70% to 75% of base salary based on individual performance and to more closely align him with competitive market compensation levels.percentages. Bonus payouts under the 20202021 Bonus Plan remainare subject to the attainment of goals related to year-over-year Adjusted EBITDA growth and adjusted capital expenditures as a percentage of total revenuesAdjusted EBITDA for 2020,2021, each subject to certain pre-established adjustments as provided in the 20202021 Bonus Plan. We changed the capital expenditures performance goal from a percentage of adjusted total revenues basis to a percentage of Adjusted EBITDA basis because of our internal focus on the latter metric and our deemphasis of comparisons that do not effectively reflect our well-established broadband-centric strategy, which diminishes the impact of lower margin video revenues.
20202021 PSA and RSA Grants
For 2020, the Compensation Committee approved changes to our long-term annual equity incentives to shift from providing ad hoc awards of time-based RSAs and SARs to a structure where a majority of annual equity grant value is provided through PSAs with the balance provided through time-based RSAs. The mix of 2020 equity grants remains more performance-based than typical market practice while also encouraging retention. The 2020 target long-term annual equity grants are comprised of approximately 67% PSAs and 33% RSAs for Ms. Laulis and approximately 60% PSAs and 40% RSAs for our other NEOs.
Effective January 3, 2020,2021, the Compensation Committee approved PSA and RSA grants to the NEOs with target grant date fair values as follows:
20202021 PSA and RSA Grants
Name |
| Target Grant Date Fair Value of PSAs (1) |
| Target Number of PSAs |
| Grant Date Fair Value of RSAs (1) |
| Number of RSAs | Target Grant Date Fair Value of PSAs (1) | Target Number of PSAs | Grant Date Fair Value of RSAs (1) | Number of RSAs | ||||
Julia M. Laulis |
| $1,000,025 |
| 652 |
| $500,012 |
| 326 | $1,269,800 | 570 | $804,207 | 361 | ||||
Michael E. Bowker |
| $400,317 |
| 261 |
| $250,006 |
| 163 | $550,247 | 247 | $349,752 | 157 | ||||
Steven S. Cochran | $400,317 | 261 | $250,006 | 163 | $550,247 | 247 | $550,247 | 247 | ||||||||
Eric M. Lardy |
| $300,621 |
| 196 |
| $250,006 |
| 163 | ||||||||
James A. Obermeyer | $320,792 | 144 | $216,089 | 97 | ||||||||||||
Peter N. Witty | $300,621 | 196 | $199,391 | 130 | $320,792 | 144 | $280,693 | 126 |
(1) | Amounts in this column represent the grant date fair value of the awards computed in accordance with Topic 718. |
The PSAs are scheduled to cliff-vest on January 3, 20232024 and the RSAs are scheduled to vest in equal annual installments over four years, generally subject to continued service with the Company through such date and, in the case of the PSAs, the attainment of the same goals and performance targets related to Adjusted EBITDA growth and adjusted capital expenditures as a percentage of total revenuesAdjusted EBITDA as bonuses under the 20202021 Bonus Plan described above. The maximum number of PSAs granted remains 200% of target.
Corporate Governance Policies
Stock Ownership Guidelines
The Board has adopted stock ownership guidelines applicable to our executives, including our NEOs, and our non-employee directors because we believe executives and directors will more effectively pursue the long-term interests of stockholders if they are stockholders themselves.
These guidelines, which were adopted in August 2015, generally require executives to hold shares of our common stock having a value equal to a multiple of the executives’ base salary and non-employee directors to hold shares of our common stock having a value equal to a multiple of the non-employee directors’ base cash retainer. RSAs, PSAs (only to the extent earned after the date the Compensation Committee certifies the achievement of the applicable performance goals) and fully owned shares all count towards the guidelines for executives and unvested and deferred restricted stock units (“RSUs”) count towards the guidelines for non-employee directors. SARs are not counted toward compliance with the guidelines nor are unearned PSAs. An executive or non-employee director is expected to achieve the applicable multiple set forth in the guidelines within five years of the later of the date of initial adoption of the guidelines, which was August 4, 2015, or the date of the executive’s initial election to such position or the non-employee director’s initial election to the Board, except as otherwise approved by the Compensation Committee (the “Compliance Period”). Compliance with these stock ownership guidelines is reviewed annually, and all of our NEOs and non-employee directors were in compliance with the stock ownership guidelines as of December 31, 2019.2020. The stock ownership guidelines applicable to our executives as a multiple of the executives’ base salary are as follows:
Position | Multiple of Base Salary | |
Executive Chair or CEO | 6.0 | |
President or COO | 3.5 | |
Senior Vice President | 3.0 | |
Vice President | 2.0 |
Our stock ownership guidelines also include the following provisions:
■ | In the case of a promotion to a level with a higher ownership requirement, an additional two-year compliance period will be provided to acquire the incremental shares required. |
■ | In the case of an executive officer who holds a position at more than one level (e.g., CEO and President), the higher ownership requirement will apply. |
■ | Shares held in trust and by immediate family members (i.e., spouses and children) and in retirement accounts all count towards the guidelines. |
■ | During the Compliance Period, up to 50% of net after-tax shares can be sold at the time a PSA, RSA or RSU vests or a SAR is exercised, and the executive or non-employee director will be required to retain the remaining 50% of net after-tax shares until in compliance with the applicable guideline. Once outside of the Compliance Period, if an executive’s or a non-employee director’s ownership falls below the required ownership level, that person will be required to retain 100% of net after-tax shares at the time a PSA, RSA or RSU vests or a SAR is exercised, until in compliance with the applicable guideline. |
Prohibition on Derivative Trading, Hedging and Pledging
Our Insider Trading Policy provides that it is inappropriate for any executive officer or director, as well as any other employee who is a member of our restricted trading population, to enter into speculative transactions in the Company’sour securities and prohibits them from (1) trading derivative securities, such as puts, calls, options and similar instruments; (2) entering into hedging or monetization transactions or similar arrangements, such as collars and forward-sale contracts; (3) engaging in short sale transactions in the Company’sour securities; and (4) buying the Company’sour securities on margin or pledging any Company securities as collateral, including borrowing against any account in which such securities are held.
Clawback Policy
Our Clawback Policy provides for the ability to recoup incentive compensation granted, paid or otherwise provided to executives and certain other employees. Below is a summary of events that may trigger action under the policy.
■ | Restatement of Financial Results |
■ | Legal or Compliance Violations / Misconduct |
The Board may seek recoupment in any manner it chooses to the extent permitted by law, including reducing current or future incentive compensation awards (except in violation of Section 409A of the Code); requiring reimbursement or repayment of cash-based incentive compensation awards paid (within the previous three-year period); cancelling all or a portion of unvested equity awards, vested equity awards (within the previous three-year period) and any dividends accrued or paid in respect of such equity awards; requiring the return of certain net shares and dividends paid from vested, exercised, settled and sold equity awards (within the previous three-year period); and any other method of reducing the total compensation granted, paid or otherwise provided (within the previous three-year period or any current or future period). For purposes of the policy, incentive compensation includes but is not limited to annual and discretionary bonuses, PSAs, RSAs and SARs.
Policy with Respect to Tax Deductibility of Compensation
As part of its role, the Compensation Committee considers the deductibility of executive compensation under Section 162(m) of the Code. Section 162(m), as in effect prior to 2018, provided that we could not deduct compensation of more than $1.0 million paid in any year to the CEO or any of the three other most highly compensated officers (excluding the CFO), unless the compensation qualified as “performance-based compensation” under Section 162(m). The 2017 Federal tax reform legislation, which was signed into law in December 2017, eliminated the exception for “performance-based compensation” with respect to 2018 and future years. As a result, we expect that, except to the extent that compensation is eligible for limited transition relief applicable to binding contracts in effect on November 2, 2017, compensation over $1.0 million per year paid to any NEO (and any person who was a named executive for any year beginning with 2017) will be nondeductible under Section 162(m).
Compensation Program Risk Assessment
As part of its oversight role, the Compensation Committee considers the impact of our compensation program, policies and practices (both at the executive and below-executive levels), on the Company’s overall risk profile. Specifically, the Compensation Committee, with assistance from our CEO, reviews the compensation plans, incentive plan design, incentive payouts and factors that may affect the likelihood of excessive risk taking to determine whether they present a significant risk to the Company. We believe that our compensation program provides an effective balance in cash and equity mix and short- and longer-term performance periods, and also allows for the Compensation Committee’s application of discretion to override formulaic results. The Company also maintains policies to mitigate compensation-related risk such as stock ownership guidelines, caps on incentive payouts, vesting periods on equity, the Clawback Policy and insider-trading prohibitions as well as independent Compensation Committee oversight. Based on this review, the Compensation Committee determined that the risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with management. Based on its review and discussion with management, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the 20192020 Form 10-K.
Wallace R. Weitz, Chairman
Brad D. Brian
Kristine E. Miller
Katharine B. Weymouth
| |||
Wallace R. Weitz, Chairman | |||
Brad D. Brian | |||
Kristine E. Miller | |||
Katharine B. Weymouth |
20192020 Summary Compensation Table
The following table shows the compensation paid by the Company during 2020, 2019 2018 and 20172018 to our principal executive officer, our principal financial officer and the three other most highly compensated executive officers of the Company who were serving as executive officers as of December 31, 20192020 based on 20192020 total compensation (except in the casescase of Messrs. Cochran, Lardy and Witty,Mr. Obermeyer who were NEOswas an NEO in 2019 and 20182020 only).
Name and Principal Position |
| Year |
| Salary |
| Bonus |
| Stock Awards(1) |
| Option Awards(1) |
| Non-Equity Incentive Plan Compensation(2) |
| Change in Pension Value and Nonqualified Deferred Compensation Earnings(3) |
| All Other Compensation(4) |
| Total | ||||||||
Julia M. Laulis | 2019 | $ | 575,000 | — | $ | 864,737 | $ | 382,840 | $ | 828,459 | $ | 22,205 | $ | 31,062 | $ | 2,704,303 | ||||||||||
Chair of the Board, |
| 2018 |
| $ | 575,000 |
| — |
| $ | 927,100 |
| $ | 339,080 |
| $ | 832,841 |
| — |
| $ | 26,009 |
| $ | 2,700,030 | ||
President and Chief Executive Officer |
| 2017 |
| $ | 550,000 |
| $ | 60,000 |
| $ | 547,779 |
| $ | 690,050 |
| $ | 903,174 |
| $ | 6,792 |
| $ | 32,096 |
| $ | 2,789,891 |
Michael E. Bowker | 2019 | $ | 360,000 | — | $ | 344,271 | $ | 287,132 | $ | 389,015 | — | $ | 29,040 | $ | 1,409,458 | |||||||||||
Chief Operating |
| 2018 |
| $ | 360,000 |
| — |
| $ | 179,621 |
| $ | 339,080 |
| $ | 391,073 |
|
| — |
| $ | 21,867 |
| $ | 1,291,641 | |
Officer |
| 2017 |
| $ | 323,904 |
| $ | 50,000 |
| $ | 136,945 |
| $ | 276,020 |
| $ | 359,639 |
|
| — |
| $ | 26,384 |
| $ | 1,172,892 |
Steven S. Cochran |
| 2019 | $ | 325,000 | — | $ | 326,408 | $ | 287,132 | $ | 327,782 | — | $ | 4,807 | $ | 1,271,129 | ||||||||||
Senior Vice President and Chief Financial Officer |
| 2018 |
| $ | 131,781 |
| — |
| $ | 974,727 |
| $ | 434,720 |
| $ | 133,612 |
|
| — |
| $ | 140,000 |
| $ | 1,814,840 | |
Eric M. Lardy |
| 2019 | $ | 253,000 | — | $ | 289,870 | $ | 287,132 | $ | 182,261 | — | $ | 6,021 | $ | 1,018,284 | ||||||||||
Senior Vice President |
| 2018 |
| $ | 220,000 |
| — |
| $ | 251,045 |
| $ | 339,080 |
| $ | 159,326 |
| — |
| $ | 11,611 |
| $ | 981,062 | ||
Peter N. Witty |
| 2019 | $ | 315,000 | — | $ | 321,536 | $ | 287,132 | $ | 226,926 | — | $ | 10,531 | $ | 1,161,125 | ||||||||||
Senior Vice President, General Counsel & Secretary |
| 2018 |
| $ | 236,466 |
| — |
| $ | 944,679 |
| $ | 328,980 |
| $ | 171,251 |
| — |
| $ | 120,000 |
| $ | 1,801,376 |
Name and Principal Position | Year | Salary (1) | Bonus | Stock Awards (2) | Option Awards (2) | Non-Equity Incentive Plan | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4) | All Other Compensation (5) | Total | |||||||||||||||||||||||||
Julia M. Laulis | 2020 | $ | 752,885 | — | $ | 1,500,037 | — | $ | 1,450,000 | $ | 3,438 | $ | 28,886 | $ | 3,731,808 | |||||||||||||||||||
Chair of the Board, President | 2019 | $ | 575,000 | — | $ | 864,737 | $ | 382,840 | $ | 828,459 | $ | 22,205 | $ | 31,062 | $ | 2,704,303 | ||||||||||||||||||
and Chief Executive Officer | 2018 | $ | 575,000 | — | $ | 927,100 | $ | 339,080 | $ | 832,841 | — | $ | 26,009 | $ | 2,700,030 | |||||||||||||||||||
Michael E. Bowker | 2020 | $ | 399,808 | — | $ | 650,323 | — | $ | 577,500 | — | $ | 19,073 | $ | 1,646,704 | ||||||||||||||||||||
Chief Operating Officer | 2019 | $ | 360,000 | — | $ | 344,271 | $ | 287,132 | $ | 389,015 | — | $ | 29,040 | $ | 1,409,458 | |||||||||||||||||||
2018 | $ | 360,000 | — | $ | 179,621 | $ | 339,080 | $ | 391,073 | — | $ | 21,867 | $ | 1,291,641 | ||||||||||||||||||||
Steven S. Cochran | 2020 | $ | 394,615 | — | $ | 650,323 | — | $ | 570,000 | — | $ | 18,122 | $ | 1,633,060 | ||||||||||||||||||||
Senior Vice President and | 2019 | $ | 325,000 | — | $ | 326,408 | $ | 287,132 | $ | 327,782 | — | $ | 4,807 | $ | 1,271,129 | |||||||||||||||||||
Chief Financial Officer | 2018 | $ | 131,781 | — | $ | 974,727 | $ | 434,720 | $ | 133,612 | — | $ | 140,000 | $ | 1,814,840 | |||||||||||||||||||
James A. Obermeyer Senior Vice President, Marketing and Sales | 2020 | $ | 222,730 | — | $ | 781,246 | $ | 746,240 | $ | 213,115 | — | $ | 140,375 | $ | 2,103,706 | |||||||||||||||||||
Peter N. Witty | 2020 | $ | 342,692 | — | $ | 500,012 | — | $ | 330,000 | — | $ | 17,635 | $ | 1,190,339 | ||||||||||||||||||||
Senior Vice President, | 2019 | $ | 315,000 | — | $ | 321,536 | $ | 287,132 | $ | 226,926 | — | $ | 10,531 | $ | 1,161,125 | |||||||||||||||||||
General Counsel & Secretary | 2018 | $ | 236,466 | — | $ | 944,679 | $ | 328,980 | $ | 171,251 | — | $ | 120,000 | $ | 1,801,376 |
(1) | In a typical year, our employees are paid on a bi-weekly basis over 26 pay periods. 2020 includes an extra pay period, resulting in actual salaries approximately 3.85% higher than in a typical year. The amounts in this column reflect each NEO’s 2020 salary including the impact of the extra pay period. The 2020 year-end base salaries for our NEOs were as follows: |
Name | 2020 Year-End Base Salary | |||
Julia M. Laulis | $ | 725,000 | ||
Michael E. Bowker | $ | 385,000 | ||
Steven S. Cochran | $ | 380,000 | ||
James A. Obermeyer | $ | 250,000 | ||
Peter N. Witty | $ | 330,000 |
| Amounts in these columns represent the grant date fair value of the PSA, RSA and SAR awards computed in accordance with Topic 718 and reflect an estimate of the grant date fair value of PSA, RSA and SAR grants made during each year indicated, rather than the amounts paid to or realized by our NEOs. The amounts included for the PSAs granted to each NEO are based on achievement of the underlying performance conditions at target (i.e., 100% of the target award value), which was determined to be the probable outcome at the time of grant. There can be no assurance that the amounts shown will be realized, and amounts could ultimately exceed these calculated fair values. See Note |
Amounts in the “Stock Awards” column represent the grant date fair value of the PSA and RSA awards granted in |
Name | Stock Awards – Grant Date Fair Value of PSAs | Stock Awards – Grant Date Fair Value of RSAs | Total | |||||||||
Julia M. Laulis | $ | 580,551 | $ | 284,186 | $ | 864,737 | ||||||
Michael E. Bowker | $ | 181,879 | $ | 162,392 | $ | 344,271 | ||||||
Steven S. Cochran | $ | 164,016 | $ | 162,392 | $ | 326,408 | ||||||
Eric M. Lardy | $ | 127,478 | $ | 162,392 | $ | 289,870 | ||||||
Peter N. Witty | $ | 159,144 | $ | 162,392 | $ | 321,536 |
Name | Stock Awards – Grant Date Fair Value of PSAs | Stock Awards – Grant Date Fair Value of RSAs | Total | |||||||||
Julia M. Laulis | $ | 1,000,025 | $ | 500,012 | $ | 1,500,037 | ||||||
Michael E. Bowker | $ | 400,317 | $ | 250,006 | $ | 650,323 | ||||||
Steven S. Cochran | $ | 400,317 | $ | 250,006 | $ | 650,323 | ||||||
James A. Obermeyer | — | $ | 781,246 | $ | 781,246 | |||||||
Peter N. Witty | $ | 300,621 | $ | 199,391 | $ | 500,012 |
Set forth below is the maximum value for the PSAs granted to |
Name |
| Stock Awards – Maximum Value of PSAs |
| Stock Awards – Maximum Value of PSAs | ||||
Julia M. Laulis |
| $ | 1,161,103 |
| $ | 2,000,049 | ||
Michael E. Bowker |
| $ | 363,758 |
| $ | 800,633 | ||
Steven S. Cochran |
| $ | 328,032 |
| $ | 800,633 | ||
Eric M. Lardy |
| $ | 254,955 |
| ||||
James A. Obermeyer | — | |||||||
Peter N. Witty |
| $ | 318,288 |
| $ | 601,242 |
| Amounts in this column for 2020, 2019 |
| The amounts shown in this column represent increases, if any, in the present value of Cable One SERP benefits. For 2018, the present value of Cable One SERP benefits for Ms. Laulis decreased $8,076, and thus is not reflected within the table. The Company sponsors a qualified defined benefit pension plan. There were no above-market or preferential earnings on compensation that was deferred on a basis that is not tax-qualified. Thus, no such earnings are reflected in the amounts shown in this column.
The values of accumulated plan benefits were determined using a discount rate of 3.24% at December 31, 2020 and December 31, 2019 and 4.27% at December 31, 2018
See the Pension Benefits table and the “Retirement Benefits” section below for additional information regarding these benefits. |
| For |
All Other Compensation
Name |
| Perquisites (4a) |
| 401(k) Company Contributions (4b) |
| PSA Dividends (4c) |
|
| Total |
| Perquisites (4a) | 401(k) Company Contributions (4b) | PSA Dividends (4c) | Relocation and Temporary Housing Allowance (4d) | Total | |||||||||||||||||||||
Julia M. Laulis |
| $ | 10,236 |
| $ | 12,163 |
| $ | 8,663 |
|
| $ | 31,062 |
| $ | 2,450 | $ | 14,750 | $ | 11,686 | — | $ | 28,886 | |||||||||||||
Michael E. Bowker |
| $ | 12,600 |
| $ | 13,923 |
| $ | 2,517 |
|
| $ | 29,040 |
| $ | 450 | $ | 14,438 | $ | 4,185 | — | $ | 19,073 | |||||||||||||
Steven S. Cochran |
| — |
| $ | 4,050 |
| $ | 757 |
|
| $ | 4,807 |
| $ | 450 | $ | 14,346 | $ | 3,326 | — | $ | 18,122 | ||||||||||||||
Eric M. Lardy |
| — |
| $ | 4,328 |
| $ | 1,693 |
|
| $ | 6,021 |
| |||||||||||||||||||||||
James A. Obermeyer | $ | 375 | — | — | $ | 140,000 | $ | 140,375 | ||||||||||||||||||||||||||||
Peter N. Witty |
| — |
| $ | 9,800 |
| $ | 731 |
|
| $ | 10,531 |
| $ | 450 | $ | 14,506 | $ | 2,679 | — | $ | 17,635 |
| Amounts in this column |
| NEOs are immediately 100% vested in 401(k) Company contributions. |
| Amounts in this column represent dividends attributable to PSAs granted under the 2015 Plan that are not included in the grant date fair value of such PSAs at target, which are reported in the “Stock Awards” column of the |
(4d) | The amount in this column represents the value of a one-time relocation and temporary housing allowance provided pursuant to Mr. Obermeyer’s offer letter with the Company. |
20192020 Grants of Plan-Based Awards
The following table shows information with respect to each plan-based award granted to our NEOs during 2019.2020.
|
|
|
|
|
| Estimated Future Payouts Under |
| Estimated Future Payouts Under |
| All Other Stock Awards: Number of Shares of Stock |
| All Other Option Awards: Number of Securities Underlying |
| Exercise or Base Price of Option |
| Grant Date Fair Value of Stock and |
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | Estimated Future Payouts Under Equity Incentive Plan Awards (3) | All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name |
| Grant Date |
| Approval Date (1) |
| Threshold |
| Target |
| Maximum |
| Threshold |
| Target |
| Maximum |
| or Units (4) |
| Options (5) |
| Awards |
| Option Awards (6) |
| Grant Date | Approval Date (1) | Threshold | Target | Maximum | Threshold | Target | Maximum | Units (4) | Options (5) | Awards | Option Awards (6) | |||||||||||||||||||||||||||||||||||||||||||
Julia M. |
| — |
| — |
| — |
| $ | 575,000 |
| $ | 1,150,000 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | — | — | $ | 725,000 | $ | 1,450,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Laulis |
| 01/03/2019 |
| 12/31/2018 |
| — |
| — |
| — |
| — |
| 715 |
| 1,430 |
| — |
| — |
| — |
| $ | 580,551 |
| 01/03/2020 | 12/31/2019 | — | — | — | — | 652 | 1,304 | — | — | — | $ | 1,000,025 | |||||||||||||||||||||||||||||||||||||||||
01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | — | — | 350 | — |
| — | $ | 284,186 | 01/03/2020 | 12/31/2019 | — | — | — | — | — | — | 326 | — | — | $ | 500,012 | ||||||||||||||||||||||||||||||||||||||||||||||||||
01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | — | — | — | 468 | $ | 811.96 | $ | 382,840 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael E. | — |
| — |
| — |
| $ | 270,000 |
| $ | 540,000 |
| — |
| — |
| — |
| — |
| — |
| — |
| — | — | — | — | $ | 288,750 | $ | 577,500 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Bowker | 01/03/2019 |
| 12/31/2018 |
| — |
| — |
| — |
| — |
| 224 |
| 448 |
| — |
| — |
| — |
| $ | 181,879 | 01/03/2020 | 12/31/2019 | — | — | — | — | 261 | 522 | — | — | — | $ | 400,317 | |||||||||||||||||||||||||||||||||||||||||||
01/03/2019 | 12/31/2018 | — | — | — | — | — | — | 200 | — | — | $ | 162,392 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | — | — | — | 352 | $ | 811.96 | $ | 287,132 | 01/03/2020 | 12/31/2019 | — | — | — | — | — | — | 163 | — | — | $ | 250,006 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Steven S. |
| — |
| — |
| — |
| $ | 227,500 |
| $ | 455,000 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | — | — | $ | 285,000 | $ | 570,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Cochran |
| 01/03/2019 |
| 12/31/2018 |
| — |
| — |
| — |
| — |
| 202 |
| 404 |
| — |
| — |
| — |
| $ | 164,016 |
| 01/03/2020 | 12/31/2019 | — | — | — | — | 261 | 522 | — | — | — | $ | 400,317 | |||||||||||||||||||||||||||||||||||||||||
01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | — | — | 200 | — | — | $ | 162,392 | 01/03/2020 | 12/31/2019 | — | — | — | — | — | — | 163 | — | — | $ | 250,006 | |||||||||||||||||||||||||||||||||||||||||||||||||||
01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | — | — | — | 352 |
| $ | 811.96 |
| $ | 287,132 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric M. |
| — |
| — |
| — |
| $ | 126,500 |
| $ | 253,000 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Lardy |
| 01/03/2019 |
| 12/31/2018 |
| — |
| — |
| — |
| — |
| 157 |
| 314 |
| — |
| — |
| — |
| $ | 127,478 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 01/03/2019 |
| 12/31/2018 |
| — |
| — |
| — |
| — |
| — | — |
| 200 |
| — |
| — |
| $ | 162,392 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James A. | — | — | — | $ | 106,557 | $ | 213,115 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obermeyer | 04/01/2020 | 02/03/2020 | — | — | — | — | — | — | 507 | — | — | $ | 781,246 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | — | — | — | 352 | $ | 811.96 | $ | 287,132 | 04/01/2020 | 02/03/2020 | — | — | — | — | — | — | — | 484 | $ | 1,540.92 | $ | 746,240 | |||||||||||||||||||||||||||||||||||||||||||||||||
Peter N. |
| — |
| — |
| — |
| $ | 157,500 |
| $ | 315,000 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — | — | — | $ | 165,000 | $ | 330,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Witty | 01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | 196 | 392 | — | — |
| — | $ | 159,144 | 01/03/2020 | 12/31/2019 | — | — | — | — | 196 | 392 | — | — | — | $ | 300,621 | |||||||||||||||||||||||||||||||||||||||||||||||||
01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | — | — | 200 | — | — | $ | 162,392 | 01/03/2020 | 12/31/2019 | — | — | — | — | — | — | 130 | — | — | $ | 199,391 | |||||||||||||||||||||||||||||||||||||||||||||||||||
01/03/2019 |
| 12/31/2018 | — |
| — |
| — |
| — | — | — | — | 352 |
| $ | 811.96 | $ | 287,132 |
(1) | The date in this column is the date the Compensation Committee took action to approve the equity-based award. |
(2) | Amounts in these columns represent the target and maximum payouts for the NEOs under the |
(3) | Amounts in these columns represent PSAs granted under the 2015 Plan as part of our long-term incentive compensation program. There is no threshold payout with respect to the PSAs. The PSAs granted in |
| Amounts in this column represent RSAs granted under the 2015 Plan as part of our long-term incentive compensation program. The terms of the RSAs are described in further detail in the section entitled “Compensation Discussion and |
| Amounts in this column represent the number of shares of our common stock underlying SAR awards calculated based upon the grant date fair value determined in accordance with Topic 718 ($ |
| Amounts in this column represent the grant date fair value of PSA, RSA and SAR awards computed in accordance with Topic 718. The amounts included for the PSAs granted to each NEO are based on achievement of the underlying performance conditions at target (i.e., 100% of the target award value), which was determined to be the probable outcome at the time of grant. See Note |
Consistent with our policy,practice, we have not entered into any employment agreements with, or guaranteed severance packages to, any of our NEOs.
Outstanding Equity Awards at Fiscal Year-End
The following table shows the number of shares underlying exercisable and unexercisable SARs and unvested PSAs and RSAs held by our NEOs on December 31, 2019.2020.
|
|
|
| SAR Awards |
| Stock Awards | ||||||||||||||
Name |
| Grant Date (1) |
| Number of Securities Underlying Unexercised Options (#) Exercisable |
| Number of Securities Underlying Unexercised Options (#) Unexercisable |
| SAR Exercise Price ($) |
|
| SAR Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested (#) (2) |
| Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | |||||
Julia M. |
| 09/01/2015 |
|
| 4,285 | — |
| $ | 422.31 |
|
| 09/01/2025 |
|
| — |
|
| — | ||
Laulis | 01/03/2017 | 1,458 | 1,458 | $ | 619.66 | 01/03/2027 | 1,225 | $ | 1,823,376 | |||||||||||
01/03/2018 | 262 | 786 | $ | 707.17 | 01/03/2028 | 1,549 | $ | 2,305,641 | ||||||||||||
01/03/2019 | — | 908 | $ | 811.96 | 01/03/2029 | 1,380 | $ | 2,054,088 | ||||||||||||
Michael E. | 09/01/2015 | 3,186 | — | $ | 422.31 | 09/01/2025 | — | — | ||||||||||||
Bowker | 01/03/2017 | 582 | 582 | $ | 619.66 | 01/03/2027 | 306 | $ | 455,472 | |||||||||||
01/03/2018 | 262 | 786 | $ | 707.17 | 01/03/2028 | 367 | $ | 546,268 | ||||||||||||
01/03/2019 | — | 680 | $ | 811.96 | 01/03/2029 | 522 | $ | 776,983 | ||||||||||||
Steven S. |
| 10/01/2018 |
|
| — | 621 |
| $ | 871.07 |
|
| 10/01/2028 |
|
| 1,119 |
| $ | 1,665,598 | ||
Cochran | 01/03/2019 | — | 680 | $ | 811.96 | 01/03/2029 | 491 | $ | 730,841 | |||||||||||
Eric M. |
| 09/01/2015 |
|
| 2,469 | — |
| $ | 422.31 |
|
| 09/01/2025 |
|
| — |
|
| — | ||
Lardy | 01/03/2017 | 1,166 | 1,166 | $ | 619.66 | 01/03/2027 | 221 | $ | 328,952 | |||||||||||
01/03/2018 | 262 | 786 | $ | 707.17 | 01/03/2028 | 374 | $ | 556,689 | ||||||||||||
01/03/2019 | — | 680 | $ | 811.96 | 01/03/2029 | 426 | $ | 634,090 | ||||||||||||
Peter N. |
| 04/02/2018 |
|
| — | 822 |
| $ | 672.58 |
|
| 04/02/2028 |
|
| 1,288 |
| $ | 1,917,149 | ||
Witty |
| 10/01/2018 |
|
| — | — |
|
| — |
|
| — |
|
| 90 |
| $ | 133,962 | ||
01/03/2019 | — | 680 | $ | 811.96 | 01/03/2029 | 482 | $ | 717,445 |
SAR Awards | Stock Awards | ||||||||||||||||||||||||
Name | Grant Date (1) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | SAR Exercise Price ($) | SAR Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (2) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | ||||||||||||||||||
Julia M. Laulis | 01/03/2017 | 2,706 | 902 | $ | 619.66 | 01/03/2027 | — | — | |||||||||||||||||
01/03/2018 | 682 | 682 | $ | 707.17 | 01/03/2028 | 1,424 | $ | 3,172,273 | |||||||||||||||||
01/03/2019 | 317 | 951 | $ | 811.96 | 01/03/2029 | 1,292 | $ | 2,878,215 | |||||||||||||||||
01/03/2020 | — | — | — | — | 1,630 | $ | 3,631,183 | ||||||||||||||||||
Michael E. Bowker | 01/03/2017 | — | 360 | $ | 619.66 | 01/03/2027 | — | — | |||||||||||||||||
01/03/2018 | — | 682 | $ | 707.17 | 01/03/2028 | 367 | $ | 817,573 | |||||||||||||||||
01/03/2019 | 238 | 714 | $ | 811.96 | 01/03/2029 | 472 | $ | 1,051,484 | |||||||||||||||||
01/03/2020 | — | — | — | — | 685 | $ | 1,525,990 | ||||||||||||||||||
Steven S. Cochran | 10/01/2018 | 304 | 608 | $ | 871.07 | 10/01/2028 | 1,119 | $ | 2,492,819 | ||||||||||||||||
01/03/2019 | 238 | 714 | $ | 811.96 | 01/03/2029 | 441 | $ | 982,425 | |||||||||||||||||
01/03/2020 | — | — | — | — | 685 | $ | 1,525,990 | ||||||||||||||||||
James A. Obermeyer | 04/01/2020 | — | 616 | $ | 1,540.92 | 04/01/2030 | 507 | $ | 1,129,452 | ||||||||||||||||
Peter N. Witty | 04/02/2018 | — | 698 | $ | 672.58 | 04/02/2028 | �� | 1,288 | $ | 2,869,303 | |||||||||||||||
10/01/2018 | — | — | — | — | 90 | $ | 200,495 | ||||||||||||||||||
01/03/2019 | — | 714 | $ | 811.96 | 01/03/2029 | 432 | $ | 962,375 | |||||||||||||||||
01/03/2020 | — | — | — | — | 522 | $ | 1,162,870 |
(1) | Generally, outstanding SARs granted under the 2015 Plan are scheduled to vest 25% per year over a four-year period from the date of grant; outstanding RSAs granted under the 2015 Plan are scheduled to either vest 25% per year over a four-year period from the date of grant or cliff-vest on the third anniversary of the grant date; and outstanding PSAs granted under the 2015 Plan are scheduled to cliff-vest on the third anniversary of the grant date. |
The following table shows the grant date and remaining vesting dates of unvested SARs, PSAs and RSAs held by our NEOs on December 31, |
Award Type | Grant Date | Remaining Vesting Date(s) | ||||
SAR | January 3, 2017 | January 3, | ||||
SAR | January 3, 2018 | January 3, | ||||
SAR | April 2, 2018 | April 2, | ||||
SAR | October 1, 2018 | October 1, | ||||
SAR | January 3, 2019 | January 3, | ||||
|
|
| April 1, 2021, 2022, 2023 and 2024 | |||
PSA | January 3, 2018 | January 3, 2021 | ||||
PSA | January 3, 2019 | January 3, 2022 | ||||
PSA | January 3, 2020 | January 3, 2023 | ||||
RSA | January 3, 2018 | January 3, | ||||
RSA | April 2, 2018 | January 3, 2021 | ||||
RSA | October 1, 2018 | January 3, 2021 | ||||
|
| and October 1, 2021 | ||||
RSA | January 3, 2019 | January 3, | ||||
RSA | January 3, 2020 | January 3, 2021, 2022, 2023 and 2024 | ||||
RSA | April 1, 2020 | April 1, 2021, 2022, 2023 and 2024 (1b) |
(1a) | For Mr. Cochran, 1,065 RSAs |
(1b) | For Mr. Obermeyer, 427 RSAs are scheduled to cliff-vest on April 1, 2023 and 80 RSAs are scheduled to vest or have vested in equal annual installments over four years beginning on April 1, 2021. |
(2) | The PSAs granted in |
(3) | Calculated using the closing price of a share of our common stock as reported by the NYSE as of December 31, |
20192020 SAR Exercises and Stock Vested
The following table shows a summary of SAR exercises and the vesting of PSAs and RSAs with respect to our NEOs in 2019.2020.
SAR Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | ||||||||||||||||||||||||
Julia M. Laulis | 2,765 | $ | 3,856,484 | 1,161 | $ | 966,016 | 4,452 | $ | 7,449,747 | 1,438 | $ | 2,205,576 | ||||||||||||||||||||
Michael E. Bowker | — | — | 634 | $ | 529,060 | 4,936 | $ | 8,576,676 | 356 | $ | 546,026 | |||||||||||||||||||||
Steven S. Cochran | 208 | $ | 310,250 | — | — | — | — | 50 | $ | 76,689 | ||||||||||||||||||||||
Eric M. Lardy | — | — | 442 | $ | 367,714 | |||||||||||||||||||||||||||
James A. Obermeyer | — | — | — | — | ||||||||||||||||||||||||||||
Peter N. Witty | 205 | $ | 234,185 | — | — | 510 | $ | 923,625 | 50 | $ | 76,689 |
(1) | Calculated using the applicable closing price of a share of our common stock based on the applicable exercise or vesting date. |
Retirement Benefits
Defined Benefit Pension Plans
Certain of our employees, including certain of our NEOs, participate in tax-qualified and/or supplemental defined benefit retirement plans. Prior to our spin-off from GHC (the “spin-off”), Ms. Laulis and Messrs.Mr. Bowker and Lardy participated in GHC’s tax-qualified defined benefit plan, the Retirement Plan for GHC (the “GHC Retirement Plan”), and/orand, in the case of Ms. Laulis, the associated nonqualified plan, the GHC Supplemental Executive Retirement Plan (the “GHC SERP”). The GHC Retirement Plan covered most employees of Cable One employed at the time of the spin-off and provided benefits that were based on formulas that take into account base salary and years of service. Such formulas are contained in the individual benefits schedules for the Cash Balance Retirement Program (“CBRP”) and the Secure Retirement Account (“SRA”), as explained in further detail below. Benefits under the GHC Retirement Plan become vested after three or five years of service, depending on which schedules cover the individual employee. Upon the spin-off, the accrued benefits of our participating NEOs under the GHC Retirement Plan became vested and remain the obligation of GHC following the spin-off. GHC will continue to administer the plan, including making payments under the plan, with respect to our current and former employees with vested rights thereunder, including our participating NEOs.
Ms. Laulis and Messrs.Mr. Bowker and Lardy have each earned a portion of their pension benefits under different benefits schedules of the GHC Retirement Plan. Ms. Laulis earned her pension benefits under the CBRP and the SRA.
Retirement Plan Benefits Under the CBRP and SRA Schedules
The CBRP was provided by GHC to eligible employees of Cable One prior to the spin-off. Each employee has an account (expressed as a lump sum amount, rather than as an annuity) that is credited with quarterly pay-based credits and interest credits. Pay-based credits vary from 2.25% to 3.75%, depending on years of service. Interest is credited on these accounts at the greater of 1.41% or 1% plus the average interest rate on one-year U.S. Treasury securities. Participants are 100% vested in their benefits after attaining age 65 while actively employed or after completion of three years of vesting service. Upon retirement, the employee may elect various forms of annuities that are actuarially equivalent to the accumulated account balance, or alternatively, may elect a lump sum payment. Vested benefits are payable at any time after termination of employment but must be paid by age 65 for employees who terminate employment prior to such age.
Under the SRA, each employee has an account (expressed as a lump sum amount, rather than as an annuity) that is credited with quarterly pay-based credits and interest credits. Pay-based credits vary from 2.20% to 3.50%, depending on years of service. Interest is credited on these accounts at the greater of 1.41% or 1% plus the average interest rate on one-year U.S. Treasury securities. Upon retirement, the employee may elect various forms of annuities that are actuarially equivalent to the accumulated account balance, or alternatively, may elect a lump sum payment. Vested benefits are payable at any time after termination of employment but must be paid by age 65 for employees who terminate employment prior to such age.
DB SERP Benefits
Effective as of the spin-off, we established the defined benefit portion of the Cable One SERP (the “Cable One DB SERP”) with terms substantially similar to the defined benefit portion of the GHC SERP (the “GHC DB SERP”). The Cable One DB SERP, under which we assumed all obligations to current and former Cable One employees, including our NEOs, who participated in the GHC DB SERP, is a nonqualified plan that provides key executives who participate in the GHC Retirement Plan with a “supplemental retirement benefit.” Prior to the spin-off, participants in the GHC SERP were selected by GHC’s management as employees whom management most wanted to retain because of their superior performance and were approved for participation by the GHC’s Compensation Committee. The GHC DB SERP provided, and the Cable One DB SERP provides, for benefits to such participants, including our participating NEO, that were calculated based on the formulas in the GHC Retirement Plan, but included bonuses under GHC’s 2012 Incentive Compensation Plan, rather than just base salary, without regard to (i) the salary limitation applicable to tax-qualified plans ($280,000285,000 in 2019)2020) or (ii) the benefit limitation applicable to tax-qualified plans ($225,000230,000 per year commencing at age 65 in 2019)2020). The GHC DB SERP provided, and the Cable One DB SERP provides, benefits only to the extent that the benefit described above exceeds the benefit in the GHC Retirement Plan. Benefits under the Cable One DB SERP are paid at retirement or age 55, if later, and are payable either in the form of a life annuity or an actuarially equivalent optional form of benefit in the GHC Retirement Plan, provided that any benefits otherwise payable before the first day of the seventh month following retirement will be withheld until such date.
Pension Benefits
The following table shows years of credited service and the present value of accumulated benefits for the participating NEO under the Cable One SERP, computed as of December 31, 2019,2020, which is the same pension plan measurement date used for financial statement reporting purposes with respect to our audited financial statements for the year ended December 31, 2019.2020. Except for Ms. Laulis, none of our other NEOs participate in any pension plans sponsored or maintained by Cable One.
Name |
| Plan Name |
| Number of Years of Credited Service (#) (1) |
| Present Value of Accumulated Benefit ($) (2) |
| Payments During Last Fiscal Year ($) |
| Plan Name | Number of Years of Credited Service (#) (1) | Present Value of Accumulated Benefit ($) (2) | Payments During Last Fiscal Year ($) | ||||||||||||
Julia M. Laulis |
| Cable One DB SERP |
| 17 |
| $ | 100,177 |
| — |
| Cable One DB SERP | 17 | $ | 103,615 | — | ||||||||||
|
(1) | Data in this column represents the number of years of credited service earned as of December 31, |
(2) | Amounts in this column represent the actuarial present value of the accumulated benefits under the plan as of December 31, |
Defined Contribution Plans
The Compensation Committee believes that both the U.S. tax-qualified and supplemental defined contribution plans are integral parts of our overall executive compensation program. Effective as of the spin-off, we established a defined contribution plan intended to be tax-qualified (the “Cable One 401(k) Plan”) and following the spin-off, all account balances of current and former Cable One employees, including our participating NEOs, held by the Savings Plan for GHC Divisions, which is one of GHC’s qualified defined contribution 401(k) plans (the “GHC 401(k) Plans”), were transferred to the Cable One 401(k) Plan. The Cable One 401(k) Plan provides for non-discretionary matching contributions up to 5% of an employee’s eligible compensation up to the salary limitation applicable to tax-qualified plans ($280,000285,000 in 2019)2020). Participants are eligible to receive Company matching contributions after one year of service, and participants are immediately vested in the Company matching contributions.
In addition, effective as of the spin-off, we established the defined contribution portion of the Cable One SERP (the “Cable One DC SERP”) with terms substantially similar to the defined contribution portion of the GHC SERP (the “GHC DC SERP”) under which we assumed all obligations to current and former Cable One employees who participated in the GHC DC SERP, including our participating NEOs. The GHC DC SERP provided, and the Cable One DC SERP provides, such executives with tax-deferred accruals of amounts proportionate to the benefits available to non-highly compensated participants in the applicable 401(k) plans, to the extent that benefits exceed those under the sponsored basic plans because of the tax law limitations ($56,00057,000 in 2019)2020). Among the benefits provided under the GHC DC SERP and Cable One DC SERP is a supplemental defined contribution plan benefit wherein we provided a matching contribution percentage up to 3% of the participating executive’s base salary in excess of the annual covered compensation limit applied to qualified plan benefits. The executive was required to defer compensation to the applicable SERP in order to receive the applicable matching Cable One credit each year. Deferred amounts will earn investment credits in accordance with the participant’s elections from a choice of investment indexes. Amounts deferred under the Cable One DC SERP are payable on the first day of the seventh month following termination of service. In connection with the spin-off, on July 1, 2015, benefit accruals were frozen under the Cable One DC SERP, and the plan was closed to new participants.
Deferred Compensation Plans
Effective as of the spin-off, we established the Cable One Deferred Compensation Plan with terms substantially similar to the GHC Deferred Compensation Plan, under which plan we remain responsible for any obligations to current and former Cable One employees who participated in the GHC Deferred Compensation Plan, including Ms. Laulis.
Prior to the spin-off, the GHC Deferred Compensation Plan provided an opportunity for participants, including Ms. Laulis, to voluntarily defer the receipt of all or a portion of annual bonus and/or certain long-term cash awards under GHC’s 2012 Incentive Compensation Plan. Elections to defer must have been filed in advance of earning such awards. Deferred amounts will earn investment credits in accordance with the participant’s elections from a choice of investment indexes. Amounts deferred under the Cable One Deferred Compensation Plan are payable on the first business day of the seventh month following the date of separation from service or such other future date as specified by the participant at the time of election. Effective for deferral elections made on or after January 1, 2014, amounts deferred under the Cable One Deferred Compensation Plan are payable on the first business day of the seventh month following the date of separation of service regardless of the participant’s elections. In connection with the spin-off, on July 1, 2015, the Cable One Deferred Compensation Plan was closed to new participants, and no deferrals were permitted after December 31, 2015.
Nonqualified Deferred Compensation
The following table shows quantitative information regarding our NEOs’ participation in the deferred compensation arrangements discussed above for 2019.2020.
Name |
| Deferred Compensation Arrangement |
| Executive Contributions in 2019 ($) |
| Registrant Contributions in 2019 ($) |
| Aggregate Earnings in 2019 ($) (1) |
| Aggregate Withdrawals / Distributions ($) |
|
| Aggregate Balance at December 31, 2019 ($) | Deferred Compensation Arrangement | Executive Contributions in 2020 ($) | Registrant Contributions in 2020 ($) | Aggregate Earnings in 2020 ($) (1) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at December 31, 2020 ($) | ||||||||||||||||||||||||
Julia M. Laulis |
| Cable One DC SERP |
|
| — |
|
| — |
| $ | 9,885 |
|
| — |
|
| $ | 54,065 | Cable One DC SERP | — | — | $ | 7,241 | — | $ | 61,306 | |||||||||||||||||
|
| Cable One Deferred Compensation Plan |
|
| — |
|
| — |
| $ | 1,628 |
| $ | (9,041) |
| $ | 10,407 | Cable One Deferred Compensation Plan | — | — | $ | (248 | ) | $ | (10,159 | ) | — |
(1) | Amounts in this column represent investment gains or losses based on Ms. Laulis’ investment elections. These gains or losses are not included in the |
Potential Payments Upon Termination or Change of Control
The following description and table showing the estimated dollar value of potential accelerated vesting that would be provided to our NEOs (or, in the case of death, to their respective estates or beneficiaries) under the PSA, RSA and SAR award agreements following a termination of their employment, assumes, in accordance with the SEC regulations, all relevant events occurred on December 31, 2019.2020.
Termination of Employment
In the event the employment of each of our NEOs is terminated by the Company other than for “Cause” or by the NEO with “Good Reason” (a “qualifying termination”) on or following the first anniversary of the grant date: (a) the PSAs will remain outstanding and subject to any applicable performance conditions and the restrictions that apply to a prorated portion of PSAs will lapse at the time the Compensation Committee determines the applicable performance conditions have been achieved based on the number of days that have elapsed since the grant date, and (b) a prorated portion of RSAs and SARs will vest based on the number of days that have elapsed since the grant date. As defined in the applicable award agreements, “Cause” generally means any of the following: (i) fraud, misappropriation, dishonesty, theft, embezzlement or intentional misuse of Company funds or property; (ii) failure by the executive to substantially perform his or hertheir duties; (iii) a conviction or plea of guilty or no contest to a felony or crime of moral turpitude; (iv) bad faith actions that result in a material detriment to the Company; or (v) material non-compliance or breach of Company agreements and policies, including misconduct, or a grossly negligent failure to supervise, that resulted in a material violation of Company policy that had a significant negative impact on the Company. As defined in the applicable agreements, “Good Reason” generally means any of the following: (i) a material reduction in base salary or target bonus opportunity; (ii) a material diminution of the executive’s title, duties or responsibilities; (iii) required relocation of the executive by more than 50 miles; or (iv) material breach of the applicable agreement by the Company.
In the event of death or disability of each of our NEOs on or following the first anniversary of the grant date, the restrictions that apply to a prorated portion of the RSAs and the PSAs (deemed achieved at target level performance) will lapse, and a prorated portion of SARs will vest based on the number of days that have elapsed since the grant date.
In the event of a qualifying termination of employment on December 31, 2019,2020, no equity awards granted in 20192020 would have vested because it was prior to the first anniversary of the grant date for such awards.
Change of Control
Outstanding PSAs, RSAs and SARs will not accelerate vesting in connection with a “change of control” of the Company unless either, (a) a successor company refuses to assume the outstanding awards or substitute awards with the same material terms and conditions (including vesting) or (b) within 18 months following a change of control, the NEO experiences a qualifying termination. In the event achievement of the applicable performance goals for the PSAs has not been determined prior to the change of control or qualifying termination, as applicable, such performance goals will be deemed achieved at target-level performance. For purposes of these agreements, change of control (as defined in the 2015 Plan) generally means any of the following: (i) during any period of 24 months, our directors on the first day of such period (the “Incumbent Directors”) no longer constitute a majority of our directors (provided that any director supported by a majority of the Incumbent Directors will be considered an Incumbent Director); (ii) completion of a merger, sale of substantially all of the assets of or similar transaction involving the Company, following which the Company’s stockholders hold 50% or less of the combined voting power of the surviving entity; (iii) our stockholders approve a plan of complete liquidation or dissolution; or (iv) any person or entity becomes the beneficial owner of 30% or more of the combined voting power of the Company.
Potential Payments
The following table shows potential payments our NEOs would receive upon a qualifying termination of employment in various circumstances, including a qualifying termination of employment within 18 months following a change of control, in each case assuming that the qualifying termination or change of control occurred on December 31, 2019.2020. In the event of a change of control without a qualifying termination (i.e., a single-trigger event), and assuming the successor company assumes any outstanding awards on the same material terms and conditions, our NEOs would not be entitled to any payments or benefits. Actual payments will only be determined upon the occurrence of any such event. For purposes of the values in this table, the intrinsic value of SARs and the value of PSAs and RSAs (including accrued dividends) are based on the closing price of a share of our common stock as of December 31, 20192020 of $1,488.47.$2,227.72.
Name | Benefit | Termination Without Cause or for Good Reason (1) | Death or Disability (1) | Termination Without Cause or for Good Following a Change of Control (2) | ||||||||||
Julia M. Laulis | Accelerated Equity Vesting | $ | 8,111,939 | $ | 8,111,939 | $ | 15,410,991 | |||||||
Michael E. Bowker | Accelerated Equity Vesting | $ | 3,498,027 | $ | 3,498,027 | $ | 7,336,718 | |||||||
Steven S. Cochran | Accelerated Equity Vesting | $ | 3,719,305 | $ | 3,719,305 | $ | 7,987,438 | |||||||
James A. Obermeyer | Accelerated Equity Vesting | — | — | $ | 2,506,728 | |||||||||
Peter N. Witty | Accelerated Equity Vesting | $ | 4,684,849 | $ | 4,684,849 | $ | 8,388,037 |
Name |
| Benefit |
| Termination Without Cause or for Good Reason (1) |
|
| Death or Disability (1) |
|
| Termination Without Cause or for Good Following a Change of Control (2) |
| |||
Julia M. Laulis |
| Accelerated Equity Vesting |
| $ | 2,832,336 |
|
| $ | 2,832,336 |
|
| $ | 9,119,962 |
|
Michael E. Bowker | Accelerated Equity Vesting | $ | 1,150,221 | $ | 1,150,221 | $ | 4,358,154 | |||||||
Steven S. Cochran |
| Accelerated Equity Vesting |
| $ | 76,558 |
|
| $ | 76,558 |
|
| $ | 4,353,225 |
|
Eric M. Lardy |
| Accelerated Equity Vesting |
| $ | 1,544,232 |
|
| $ | 1,544,232 |
|
| $ | 5,122,184 |
|
Peter N. Witty |
| Accelerated Equity Vesting |
| $ | 304,327 |
|
| $ | 304,327 |
|
| $ | 5,030,551 |
|
(1) | The amounts in this column represent the value of the pro-rata portion of outstanding SARs, PSAs and RSAs granted prior to |
| The amounts in this column represent the value of all outstanding SARs, PSAs and RSAs for each NEO that would accelerate vesting and become exercisable, if applicable, upon a qualifying termination within 18 months following a change of control on December 31, |
Clawback Policy —– Restrictive Covenants and Release
Our annual cash incentive program and our PSA, RSA and SAR award agreements are subject to our Clawback Policy (described in further detail in the section entitled ““Compensation Discussion and Analysis—Analysis—Corporate Governance Policies—Clawback Policy”” above). The Clawback Policy contains restrictive covenants that obligate theeach NEO not to disclose any of our confidential information or knowingly or intentionally disparage the Company at any time. In addition, for two years following termination of employment, an NEO is not permitted to (i) compete with us by directly or indirectly rendering services to, or owning or acquiring certain interests in, any entity that provides services similar to the services we provide in the same areas as our systems, provides services to communities where we own systems, or provide services to us or (ii) directly or indirectly, solicit the employment of, employ or cause any other person to take such actions with respect to any person who was our employee or an employee of our affiliates on, or within two years prior to, the effective date of termination. In addition, under the applicable award agreements, accelerated vesting of PSAs, RSAs and SARs upon a termination due to disability, by the Company without “Cause” or by the NEO for “Good Reason” is subject to execution of a general release of claims in favor of the Company and its affiliates.
CEO Pay Ratio
Our executive compensation program is based upon a pay-for-performance philosophy, which is designed to, among other things, align the interests of our executive officers and stockholders where a substantial portion of executive officer compensation is at-risk and tied to objective performance goals. A key objective of our executive compensation program is to motivate our CEO and other executives to enhance our overall performance and profitability through the successful execution of our short- and long-term business strategies, with an emphasis on the long-term. For 2019, approximately 76% of our CEO’s target annual compensation was at-risk in the form of annual performance-based cash incentives and long-term time-based (through RSAs) and performance-based equity incentives tied to the achievement against pre-established long-term operating goals (through PSAs) or the appreciation of our common stock (through SARs).
Pursuant to Item 402(u) of Regulation S-K and Section 953(b) of the Dodd-Frank Act, presented below is the ratio of annual total compensation of our CEO to the annual total compensation of our median employee (excluding our CEO). We described the methodology and determination date (December 31, 2017) used toTo identify our median employee, for 2017 inas well as to determine the proxy statement for our 2018 Annual Meetingannual total compensation of Stockholders. We elected to use the same median employee, in our 2019 pay ratio calculation asthe methodology and the material assumptions, adjustments, and estimates that we used in 2017 and 2018 because there have been no changes in our employee population or employee compensation arrangements that we believe would significantly impact the pay ratio disclosure. In identifying our median employee from our employee population in 2017, we calculated the 12-month total cash compensation, including base salary or wages, overtime, bonus and cash incentives/commissions, of each of our employees.were as follows:
■ | We selected December 31, 2020 as the date upon which we would determine our employee population used to identify our median employee. As of December 31, 2020, we had 2,722 full-time, part-time, temporary and seasonal employees (excluding Ms. Laulis). We did not include independent contractors or leased workers in our determination. |
■ | In identifying our median employee from our employee population, we calculated the total cash compensation of each employee of ours and our subsidiaries (including employees from our acquisition of Valu-Net) included in the employee population described above, for the 12-month period that ended on December 31, 2020. Total cash compensation for these purposes included base salary or wages, overtime, bonus, and cash incentives/commissions and was calculated using internal payroll records. For employees that were hired in 2020 but did not work the full year, we did not annualize their compensation or make any full-time equivalent adjustments. In determining the 12-month total cash compensation for employees from our acquisition of Valu-Net, we did not take into account compensation paid in 2020 prior to the closing of the acquisition on July 1, 2020. We did not apply any cost-of-living adjustments as part of the calculation. Once we identified the median employee, we determined the annual total compensation of the median employee in accordance with the requirements for determining total compensation in the Summary Compensation Table. |
The 20192020 annual total compensation for our CEO, as reported in the 20192020 Summary Compensation Table, was $2,704,303.$3,731,808. The 20192020 annual total compensation for our median employee was $49,978.$61,486. The ratio of our CEO’s annual total compensation to our median employee’s total compensation for 20192020 was 5461 to 1.
We believe that the ratio presented is a reasonable estimate calculated in a manner consistent with Item 402(u). The SEC’s rules for identifying the median employee and calculating the ratio of the annual total compensation of the CEO to the annual total compensation of the median employee allow companies to adopt a variety of methodologies, apply certain exclusions and make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the ratio reported by other companies may not be comparable to the ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own ratios.
PROPOSALPROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION FOR 20192020
We are asking stockholders to approve an advisory resolution on the compensation of our NEOs as reported in this Proxy Statement, commonly referred to as the “say-on-pay” vote. Although the say-on-pay vote is advisory and therefore non-binding, the Board and the Compensation Committee value the input of our stockholders and will review and consider the voting results when making future decisions regarding our executive compensation program. At our 20192020 Annual Meeting of Stockholders, more than 98%nearly 99% of the votes cast voted in favor of our say-on-pay proposal. At this time, we intend to hold the advisory say-on-pay vote on an annual basis.basis until the next required advisory vote on the frequency of future say-on-pay votes, which will occur at our 2023 Annual Meeting of Stockholders.
As described above in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Compensation Committee has structured our executive compensation program to achieve the following key objectives:
■ | Attract and retain highly qualified and productive executives. |
■ | Motivate executives to enhance our overall performance and profitability through the successful execution of the Company’s short- and long-term business strategies, with an emphasis on the long-term. |
■ | Align the long-term interests of our executives and stockholders through meaningful ownership of Cable One stock by executives and by rewarding stockholder value creation. |
■ | Reflect our pay-for-performance philosophy. |
■ | Ensure that total compensation opportunities are competitive. |
We believe that our compensation programs have played a key role in our operating and financial success. We encourage stockholders to read the “Compensation Discussion and Analysis” above, which provides an overview of our executive compensation policies and procedures, how they operate and are designed to achieve our pay-for-performance objectives and how they were applied for 2019.2020. The 20192020 Summary Compensation Table and other related compensation tables and narrative provide detailed information on the compensation of our NEOs. The Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of the NEOs reported in this Proxy Statement has contributed to our success.
In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve, on a non-binding advisory basis, the compensation of our NEOs as disclosed in the Compensation Discussion and Analysis, the 20192020 Summary Compensation Table and the related compensation tables, notes and narrative in this Proxy Statement.”
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR”“FOR” THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF OUR NEOs FOR 2019.2020.
PROPOSAL 4: APPROVAL OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION,
AS AMENDED AND RESTATED TO DECLASSIFY THE BOARD OF DIRECTORS TO PROVIDE FOR THE ANNUAL ELECTION OF DIRECTORS
Article V of our Charter provides that directors of our Company are divided into three classes, with each class consisting, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board. The members of each class are elected to hold office until the third annual meeting of stockholders next following the director’s election and until the director’s successor is elected and qualified. Our classified board structure has been in place since the spin-off in 2015. There are currently three Class I directors whose terms of office will expire at the 2022 Annual Meeting of Stockholders, three Class II directors whose terms of office will expire at the Annual Meeting and four Class III directors whose terms of office will expire at the 2021 Annual Meeting of Stockholders.
The Nominating and Governance Committee and the Board review our corporate governance practices and policies annually, and they regularly receive input from our stockholders with respect to such practices and policies. We believe that our corporate governance practices and policies should reflect our philosophy of managing for the long term to the extent practicable. Since the spin-off, we have a demonstrated record of exceptional financial and operational success driven by our differentiated operating philosophy, all accomplished under the leadership of a classified board that helped promote continuity and stability while enabling our directors to develop a robust understanding of our business and strategy that fostered long-term investor interests. A classified board can also promote value for stockholders in the event of an unsolicited takeover bid by allowing a board to negotiate on the behalf of stockholders without the threat of imminent removal of a majority of board members.
Although a number of our largest stockholders have indicated that they have no concerns with our classified board structure, we have received feedback from certain institutional investors and other constituents that view classified boards skeptically regardless of performance, value creation or strategy. The Nominating and Governance Committee and the Board recognize the preference of certain investors and other constituents for annual elections based upon their perception that this approach provides for greater board accountability and responsiveness to stockholders. While we believe that our classified board structure is well-aligned with our long-term perspective, after evaluating various considerations regarding our classified board structure, including the viewpoints of certain institutional investors and other constituents, the Board, upon the unanimous recommendation of the Nominating and Governance Committee, has unanimously declared advisable and has approved, subject to approval of this proposal by our stockholders, to amend and restate our Charter (the “New Charter”) to declassify the Board beginning with the 2021 Annual Meeting of Stockholders. This change would provide for the annual election of all directors phased-in over a three-year period. Directors who have been elected to three-year terms prior to the effectiveness of the New Charter, including the Class II directors elected at the Annual Meeting, will complete their three-year terms. If this proposal is approved, directors elected at the 2021 Annual Meeting of Stockholders and at each subsequent annual meeting will be elected to one-year terms (until the first annual meeting of stockholders next following the director’s election and until the director’s successor is elected and qualified). As a result, if this proposal is approved, our Board would be fully declassified following our 2023 Annual Meeting of Stockholders.
The New Charter would become effective upon its filing with the Secretary of State of the State of Delaware, which we would file following the Annual Meeting if our stockholders approve the New Charter. If the New Charter is approved by our stockholders, the Board retains discretion not to implement it under Delaware law. If the Board exercises this discretion, it will publicly disclose that fact and the reason for its determination. If the New Charter is not approved by the requisite vote, then the New Charter will not be filed with the Secretary of State of the State of Delaware.
The New Charter would not change the present number of directors or the Board’s authority to fill any Board vacancies on account of newly created directorships resulting from any increase in the number of directors or resulting from a director’s death, resignation, retirement, removal or other cause. Any director elected by the Board to fill a vacant or new directorship in Class I, II or III would serve the remaining term of the class such director was elected to and until the director’s successor is elected and qualified. After the full declassification of the Board, any director elected by the Board to fill a vacant or new directorship would serve until the first annual meeting of stockholders next following the director’s election and until the director’s successor is elected and qualified.
Our Charter currently provides that any director or the entire Board may only be removed for cause by our stockholders. However, Delaware law provides that stockholders may remove directors with or without cause when a board is not classified. As a result, the New Charter, if approved by our stockholders, would also provide that directors may be removed with or without cause, except that a director elected to a class of directors serving the remainder of a three-year term is removable only for cause. If our stockholders do not approve the New Charter, the Board will remain classified and any director or the entire Board would continue to only be able to be removed by our stockholders for cause.
The New Charter is attached to this Proxy Statement as Annex B, with deleted text shown in strikethrough and added text shown as double underline. The affirmative vote of a majority of our outstanding shares as of the Record Date is required to approve this proposal pursuant to our current Charter and Delaware law.
THE FULL TEXT OF THE NEW CHARTER IS ATTACHED TO THIS PROXY STATEMENT AS ANNEX B AND THE FOREGOING DISCUSSION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH TEXT.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVALOF AN AMENDMENT TO OUR CHARTER TO DECLASSIFY THE BOARDAS SET FORTH IN ANNEX B TO THIS PROXY STATEMENT.
DIRECTORDIRECTOR COMPENSATION
The annual compensation arrangements for non-employee directors with respect to each service year, which runs from approximately May to May (based on the dates of the applicable annual meetings of stockholders and which are prorated for new directors elected during the service year), have been in place since May 2017 and are comprised of the following components:
Component |
| Amount |
| Amount | ||||
Cash Compensation |
|
| ||||||
Annual Cash Retainer (each non-employee director) |
| $ | 75,000 |
| $ | 75,000 | ||
Lead Independent Director |
| $ | 30,000 |
| $ | 30,000 | ||
Audit Committee Chair |
| $ | 15,000 |
| $ | 15,000 | ||
Compensation Committee Chair |
| $ | 10,000 |
| $ | 10,000 | ||
Executive Committee Chair (1) |
| $ | 10,000 |
| $ | 10,000 | ||
Nominating and Governance Committee Chair (1) |
| $ | 5,000 |
| $ | 5,000 | ||
Equity Compensation |
|
| ||||||
Annual Equity Award |
| $ | 125,000 |
| $ | 125,000 |
(1) | Payable only if the committee chair is a non-employee director other than the Lead Independent Director. |
Each non-employee director will receive an annual equity award grant in the form of RSU awards under the 2015 Plan with a grant date fair value of approximately $125,000. Such RSUs will generally be granted on the date of our annual stockholders’ meeting and will vest on the earlier of the first anniversary of the grant date or the annual stockholders’ meeting date immediately following the grant date, subject to the non-employee director’s continued service through such vesting date. Settlement of such RSUs will be in the form of one share of the Company’s common stock and will follow vesting, unless the director has previously elected to defer such settlement. Non-employee directors may elect to defer the settlement of all or a portion of their RSUs until the earlier of separation from service from the Board, a date specified by the director (if any) and a “change of control” of the Company (as defined above in the section entitled “Potential Payments Upon Termination or Change of Control”). Non-employee directors may also elect to defer all or a portion of their annual cash fees (including the annual cash retainer and any additional committee chair cash retainers or lead independent director cash retainer) that will be converted to and deferred as RSUs. Dividends associated with RSUs are accrued and will be paid out in cash at the time of settlement, except that any dividends associated with RSUs granted prior to the 2017 annual grant of RSUs may beare converted into deferred stock units (“DSUs”) if the value of such dividends exceeds the value of a share of our common stock on the dividend payment date, which will be delivered at the time of settlement of the associated RSUs. Notwithstanding the foregoing, such RSUs will vest, and be settled, upon a change of control of the Company.
Non-employee directors who serve as a committee chair or lead independent director for less than the full year, or who serve in multiple roles, will be eligible for the additional cash component for such partial service or additional roles on a case-by-case basis, as determined by the Board. We also reimburse our non-employee directors for out-of-pocket expenses incurred related to the meetings they attend.
Employee directors do not receive additional compensation for serving on the Board.
In determining our current annual compensation arrangements for non-employee directors, the Board considered an independent review conducted by FW Cook in 20172020 of our non-employee director compensation program on behalf of the Compensation Committee and the Board. FW Cook compared each element of non-employee director compensation to that of a peer group comprised of the same companies disclosed for our then-current executive2020 NEO compensation peer group.group under “Compensation Discussion and Analysis—Our Executive Compensation Program and Practices—Use of Peer Companies” on page 27, except for the addition of Iridium Communications and Shaw Communications and the removal of Gogo, NII Holdings and Zayo Group Holdings. In assessing the compensation provided to our non-employee directors, FW Cook utilized comparative data disclosed in peer companies’ publicly available proxy statements along with other documents filed with the SEC.
Our non-employee director compensation program is designed so that the amount and form of compensation is in line with typical peer practice, andpractice. Similar to our approach to executive compensation, a substantial portion of annual non-employee director compensation is comprised of equity awards. For 2020, our total annual base compensation value and additional retainer amounts approximatedwas modestly above the peer median at that time.median. In light of the competitive amount paid under and the best practices structured into our non-employee director compensation program, no changes were made to the program for 2020.
Our stock ownership guidelines for non-employee directors require stock ownership of a multiple of five times the annual base cash retainer, ($375,000),or $375,000, which each non-employee director is expected to achieve within a five-year compliance period of the later of the date of initial adoption of our stock ownership guidelines, which was August 4, 2015, orcommencing with the date of the non-employee director’s initial election to the Board. Compliance with the stock ownership guideline is reviewed annually, and all of our non-employee directors were in compliance with the stock ownership guidelines as of December 31, 2019.2020.
Director Compensation
The following table shows the compensation paid by the Company during the year ended December 31, 20192020 to our non-employee directors.
Name (1) | Fees Earned or Paid in Cash ($) | Stock Awards ($) (2), (3) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards ($) (2), (3) | All Other Compensation ($) (4) | Total ($) | |||||||||||||||||||||
Brad D. Brian | $ | 37,228 | $ | 160,652 | $ | 197,880 | $ | 13,908 | $ | 198,206 | — | $ | 212,114 | |||||||||||||||
Thomas S. Gayner | — | $ | 229,015 | $ | 229,015 | — | $ | 229,405 | — | $ | 229,405 | |||||||||||||||||
Deborah J. Kissire | $ | 89,348 | $ | 124,192 | $ | 213,540 | $ | 89,417 | $ | 124,796 | $ | 1,000 | $ | 215,213 | ||||||||||||||
Mary E. Meduski | — | $ | 173,598 | $ | 173,598 | — | $ | 198,206 | $ | 1,000 | $ | 199,206 | ||||||||||||||||
Thomas O. Might | $ | 74,457 | $ | 124,192 | $ | 198,649 | $ | 74,514 | $ | 124,796 | $ | 10,000 | $ | 209,310 | ||||||||||||||
Kristine E. Miller | $ | 22,047 | $ | 83,000 | $ | 105,047 | $ | 74,514 | $ | 124,796 | — | $ | 199,310 | |||||||||||||||
Alan G. Spoon | $ | 37,228 | $ | 160,652 | $ | 197,880 | ||||||||||||||||||||||
Sherrese M. Smith | — | $ | 153,523 | — | $ | 153,523 | ||||||||||||||||||||||
Alan G. Spoon (5) | $ | 25,582 | $ | 179,853 | — | $ | 205,435 | |||||||||||||||||||||
Wallace R. Weitz | — | $ | 208,506 | $ | 208,506 | — | $ | 209,217 | — | $ | 209,217 | |||||||||||||||||
Katharine B. Weymouth | $ | 74,457 | $ | 124,192 | $ | 198,649 | $ | 74,514 | $ | 124,796 | — | $ | 199,310 |
(1) | Ms. Laulis is not included in this table because she was an employee of the Company in |
(2) | Amounts in this column represent the grant date fair value of the RSU awards computed in accordance with Topic 718 and reflect an estimate of the grant date fair value of RSU grants made during |
(3) | The following table shows the aggregate number of unvested and outstanding RSUs held by each non-employee director at December 31, |
Name | Unvested and Outstanding RSUs at December 31, | |
Brad D. Brian |
| |
Thomas S. Gayner |
| |
Deborah J. Kissire |
| |
Mary E. Meduski |
| |
Thomas O. Might |
| |
Kristine E. Miller |
| |
Sherrese M. Smith | 83 | |
Alan G. Spoon(5) |
| |
Wallace R. Weitz |
| |
Katharine B. Weymouth | 68 |
(4) |
|
(5) | Mr. Spoon retired as a member of the Board effective February 8, 2021. |
SECURITYSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables provide information regarding the beneficial ownership of our common stock as of March 30, 2020April 5, 2021 by:
■ | each executive officer named in the | |
■ | each of our directors and nominees for director; | |
■ | all of our executive officers and directors as a group; and | |
■ | each of our stockholders who we believe (based on the assumptions described below) beneficially owns more than 5% of our outstanding common stock. |
Except as otherwise noted in the footnotes below, each person or entity identified in the table below has sole voting and investment power with respect to the securities he, shethey or it holds, subject to applicable community property law.
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Under such rules, a person is deemed to be the “beneficial owner” of stock if such person has (or shares) either investment power or voting power over such stock or has (or shares) the right to acquire such stock within 60 days by any of a number of means. The percentages shown are calculated based on 5,725,1316,034,547 shares outstanding on March 30, 2020.April 5, 2021. The numbers and percentages shown include shares actually owned on March 30, 2020April 5, 2021 and shares, SARs (in the case of executive officers and Mr. Might), RSUs or DSUs (in the case of non-employee directors) that the identified person or group had the right to acquire within 60 days of such date. In calculating the percentage of ownership, all shares that the identified person or group had the right to acquire within 60 days of March 30, 2020April 5, 2021 upon the exercise of SARs or the delivery of RSUs or DSUs are deemed to be outstanding for the purpose of computing the percentage of shares owned by that person or group, but are not deemed to be outstanding for the purpose of computing the percentage of shares owned by any other person or group.
Name |
| Direct Ownership |
| Shares Underlying Exercisable SARs (1) |
| RSUs and DSUs (2) |
| Total Beneficial Ownership |
| Percentage Owned |
| |||||
NEOs and Directors: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Julia M. Laulis (3) |
|
| 9,743 |
|
| 5,398 |
|
| — |
|
| 15,141 |
|
| * |
|
Michael E. Bowker (4) |
|
| 2,879 |
|
| 2,778 |
|
| — |
|
| 5,657 |
|
| * |
|
Steven S. Cochran (5) |
|
| 3,023 |
|
| 190 |
|
| — |
|
| 3,213 |
|
| * |
|
Eric M. Lardy (6) |
|
| 2,086 |
|
| 5,205 |
|
| — |
|
| 7,291 |
|
| * |
|
Peter N. Witty (7) |
|
| 2,381 |
|
| 296 |
|
| — |
|
| 2,677 |
|
| * |
|
Brad D. Brian |
|
| 517 |
|
| — |
|
| 851 |
|
| 1,368 |
|
| * |
|
Thomas S. Gayner (8) |
|
| 5,773 |
|
| — |
|
| 1,162 |
|
| 6,935 |
|
| * |
|
Deborah J. Kissire |
|
| 100 |
|
| — |
|
| 1,336 |
|
| 1,436 |
|
| * |
|
Mary E. Meduski | — | — | 147 | 147 | * | |||||||||||
Thomas O. Might |
|
| 13,587 |
|
| 4,821 |
|
| 109 |
|
| 18,517 |
|
| * |
|
Kristine E. Miller | — | — | 67 | 67 | * | |||||||||||
Alan G. Spoon |
|
| 44 |
|
| — |
|
| 1,317 |
|
| 1,361 |
|
| * |
|
Wallace R. Weitz |
|
| — |
|
| — |
|
| 1,586 |
|
| 1,586 |
|
| * |
|
Katharine B. Weymouth |
|
| 27 |
|
| — |
|
| 310 |
|
| 337 |
|
| * |
|
All executive officers and directors as a group, eliminating duplications (17 individuals) |
|
| 43,690 |
|
| 21,366 |
|
| 6,885 |
|
| 71,941 |
|
| 1.3% |
|
The address of each of our NEOs and directors identified in the table below is c/o Cable One, Inc., 210 E. Earll Drive, Phoenix, Arizona, 85012.
Name | Direct Ownership | Shares Underlying Exercisable SARs (1) | RSUs and DSUs (2) | Total Beneficial Ownership | Percentage Owned | |||||||||||
NEOs and Directors: | ||||||||||||||||
Julia M. Laulis (3) | 10,676 | 4,836 | — | 15,512 | * | |||||||||||
Michael E. Bowker (4) | 3,391 | 1,067 | — | 4,458 | * | |||||||||||
Steven S. Cochran (5) | 2,872 | 689 | — | 3,561 | * | |||||||||||
James A. Obermeyer (6) | 886 | 87 | — | 973 | * | |||||||||||
Peter N. Witty (7) | 2,222 | 530 | — | 2,752 | * | |||||||||||
Brad D. Brian | 571 | — | 905 | 1,476 | * | |||||||||||
Thomas S. Gayner (8) | 5,773 | — | 1,287 | 7,060 | * | |||||||||||
Deborah J. Kissire | 100 | — | 1,404 | 1,504 | * | |||||||||||
Mary E. Meduski | — | — | 255 | 255 | * | |||||||||||
Thomas O. Might | 13,696 | 5,107 | 68 | 18,871 | * | |||||||||||
Kristine E. Miller | 67 | — | 68 | 135 | * | |||||||||||
Sherrese M. Smith | — | — | 83 | 83 | * | |||||||||||
Wallace R. Weitz | — | — | 1,700 | 1,700 | * | |||||||||||
Katharine B. Weymouth | — | — | 378 | 378 | * | |||||||||||
All executive officers and directors as a group, eliminating duplications (17 individuals) | 45,229 | 17,930 | 6,148 | 69,307 | 1.1% |
Name | Beneficial Ownership | Percentage Owned | |||
Principal Stockholders: | |||||
T. Rowe Price Associates, Inc. (9) | 833,112 | 14.6% | |||
Daniel L. Mosley (10) | 617,305 | 10.8% | |||
Donald E. Graham (11) | 528,291 | 9.2% | |||
The Vanguard Group (12) | 474,715 | 8.3% | |||
BlackRock, Inc. (13) | 441,478 | 7.7% | |||
Renaissance Technologies LLC (14) | 292,900 | 5.1% |
Name | Beneficial | Percentage | ||||
Principal Stockholders: | ||||||
T. Rowe Price Associates, Inc. (9) | 757,200 | 12.5% | ||||
BlackRock, Inc. (10) | 629,221 | 10.4% | ||||
Daniel L. Mosley (11) | 604,405 | 10.0% | ||||
Donald E. Graham (12) | 528,291 | 8.8% | ||||
The Vanguard Group (13) | 494,356 | 8.2% |
* |
|
(1) | For the executive officers and Mr. Might, includes the net number of shares issuable upon exercise of vested SARs. Following vesting, upon exercise of a SAR, the holder would receive the value of the appreciation in the share subject to the SAR over the exercise price. For purposes of this column, the net number of shares issuable upon exercise has been calculated using the closing price of a share of our common stock as of |
(2) | For non-employee directors, includes the number of shares to be received at settlement upon the lapse of restrictions applicable to RSUs and DSUs per the terms of the non-employee director’s deferral election. |
(3) | The amount includes |
(4) | The amount includes |
(5) | The amount includes |
(6) | The amount includes |
(7) | The amount includes |
(8) | The amount includes 5,200 shares of our common stock held for the account of a number of beneficial owners in which Mr. Gayner disclaims beneficial ownership. |
(9) | Based on a Schedule 13G/A filed on February |
(10) | Based on a Schedule 13G/A filed on January 27, 2021, BlackRock, Inc. (“BlackRock”), a holding company, was deemed to be the beneficial owner of 629,221 shares of our common stock. Based on the Schedule 13G/A, BlackRock has sole voting power over 599,174 shares and sole dispositive power over 629,221 shares. The address of BlackRock is 55 E. 52nd Street, New York, New York 10055. |
| According to information as of March |
|
|
| Based on a Schedule 13G/A filed on February |
|
|
|
|
EQUITYEQUITY COMPENSATION PLAN INFORMATION
The following table shows certain information as of December 31, 20192020 concerning our compensation plans under which equity securities of the Company are authorized to be issued.
Plan Category |
| Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights (1) (a) |
| Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (1) (b) |
| Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) |
| Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights (1) (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (1) (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | ||||||||||||||
Equity compensation plans approved by security holders |
| 56,122 |
| $ | 676.41 |
| 169,456 |
| 43,167 | $ | 866.54 | 119,595 | ||||||||||||
Equity compensation plans not approved by security holders |
|
| — |
| — |
|
| — |
| — | — | — | ||||||||||||
Total |
|
| 56,122 |
| $ | 676.41 |
|
| 169,456 |
| 43,167 | $ | 866.54 | 119,595 |
(1) | Column (a) includes |
REPORTREPORT OF THE AUDIT COMMITTEE
One of the standing committees of the Board is the Audit Committee. Currently, there are fourthree non-employee members of the Board on the Audit Committee: Deborah J. Kissire, who serves as Chair of the Audit Committee, Mary E. Meduski Alan G. Spoon and Katharine B. Weymouth. The Audit Committee operates under a delegation of authority from the Board, which has determined that each Audit Committee member is “independent” under the listing standards of the NYSE.
Management has the primary responsibility for the preparation of the Company’s financial statements in accordance with GAAP and for the financial reporting process, including the Company’s system of internal control. The Company’s independent auditor, PwC, is responsible for auditing those financial statements and expressing an opinion as to their conformity with GAAP, as well as expressing an opinion on the effectiveness of internal control over financial reporting in accordance with the requirements of the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee’s role is one of oversight. In this context, the Audit Committee’s responsibility is to monitor and review these processes, as well as the independence and performance of the Company’s auditor.
In performing its oversight function, the Audit Committee has:
■ | reviewed and discussed the audited fiscal year |
■ | discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB |
■ | received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence and has discussed with PwC their independence. |
The Audit Committee has also considered whether PwC’s provision of non-audit services to the Company is compatible with the independence of such firm and reviewed matters relating to the Company’s internal control over financial reporting.
Based on such review and discussion and in reliance thereon, the Audit Committee recommended to the Board, and the Board approved, that the audited fiscal year 20192020 financial statements be included in the 20192020 Form 10-K for filing with the SEC.
Deborah J. Kissire, Chair
Mary E. Meduski
Alan G. Spoon
Katharine B. Weymouth
Deborah J. Kissire, Chair | |||
Mary E. Meduski | |||
Katharine B. Weymouth |
CERTAINCERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Policy and Procedures Governing Related Person Transactions
Our Board has adopted a written policy for the review and approval of transactions involving related persons, which consist of directors, director nominees, executive officers, persons or entities known to us to be the beneficial owner of more than 5% of any outstanding class of our voting securities or immediate family members or certain affiliated entities of any of the foregoing persons. Under authority delegated by the Board, the Nominating and Governance Committee (or its Chair or other committee member, under certain circumstances) is responsible for applying the policy with the assistance of our General Counsel or his or hertheir designee (if any). Transactions covered by the policy consist of any financial transaction, arrangement or relationship or series of similar transactions, arrangements or relationships, in which: the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year; we are, will or may be expected to be a participant; and any related person has or will have a direct material interest or an indirect material interest.
The Nominating and Governance Committee (or its Chair or other committee member as the case may be) may take into account such factors it deems appropriate in its determination to approve or ratify a transaction, which may include:
■ | the extent of the related person’s interest in the transaction; |
■ | whether the transaction would interfere with the objectivity and independence of any related person’s judgment or conduct in fulfilling |
■ | whether the transaction is fair to the Company and on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; |
■ | whether the transaction is in the best interests of the Company and its stockholders; |
■ | whether the transaction is consistent with any conflict of interest policies set forth in our Code of Business Conduct and other policies; and |
■ | whether in connection with any transaction involving a non-employee director or nominee for director, such transaction would compromise such director’s status as: (i) an independent director within the meaning of the NYSE listing standards or our Corporate Governance Guidelines; (ii) an “outside director” within the meaning of Section 162(m) of the Code or a “non-employee director” under Rule 16b-3 under the Exchange Act, if such non-employee director serves on the Compensation Committee; or (iii) an independent director under Rule 10A-3 of the Exchange Act, if such non-employee director serves on the Audit Committee. |
The Nominating and Governance Committee (or its Chair or other committee member as the case may be) may impose such conditions or guidelines as it determines appropriate with respect to any related person transaction it approves or ratifies, including, but not limited to:
■ | conditions relating to ongoing reporting to the Nominating and Governance Committee and other internal reporting; |
■ | limitations on the dollar amount of the transaction; |
■ | limitations on the duration of the transaction or the Nominating and Governance Committee’s approval of the transaction; and |
■ | other conditions for the protection of the Company and to avoid conferring an improper benefit or creating the appearance of a conflict of interest. |
Related Person Transaction Recusal
Mr. Gayner and Ms. Weymouth, who are members of our Board, also serve on the GHC board of directors.directors of GHC (our former corporate parent). These members of our Board may be required to recuse themselves from deliberations relating to any existing or future arrangements between our Company and GHC.
STOCKHOLDERSTOCKHOLDER PROPOSALS FOR THE 20212022 ANNUAL MEETING OF STOCKHOLDERS
Deadline for the Submission of Stockholder Proposals for Inclusion in Our Proxy Statement for Our 20212022 Annual Meeting of Stockholders
If any stockholder wishes to submit a proposal to be considered for inclusion in our proxy materials for our 20212022 Annual Meeting of Stockholders, such proposal must comply with the requirements of the SEC’s proxy rules and be submitted in writing, received by December 14, 2020,17, 2021, and addressed to our Secretary at 210 E. Earll Drive, Phoenix, Arizona, 85012.
Deadline and Procedures Under Our By-laws for Stockholder Nominations and Other Proposals Not Included in Our Proxy Statement for Our 20212022 Annual Meeting of Stockholders
Under our By-laws, any stockholder of record wishing to appear at our 20212022 Annual Meeting of Stockholders and submit a proposal or nominate a person for election to our Board must submit the proposal or nomination to our Secretary at 210 E. Earll Drive, Phoenix, Arizona, 85012 not earlier than January 15, 202121, 2022 and not later than February 14, 2021.20, 2022. Any such stockholder proposal or director nomination will not appear in our proxy statement. These time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority. All stockholder proposals and director nominations, other than stockholder proposals made pursuant to Rule 14a-8 under the Exchange Act, must comply with the requirements of our By-laws.
HOUSEHOLDINGHOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy delivery requirements for proxy materials with respect to two or more stockholders sharing the same address by delivering a single copy of the proxy materials addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies.
A number of brokers have instituted householding of proxy materials unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate copy of the proxy statementmaterials in the future, or if you and other stockholders sharing your address are receiving multiple copies of the proxy materials and you would like to receive only a single copy of such materials in the future, please notify your broker. You may also call (800) 542-1061 or write to: Householding Department, Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, New York, 11717, and include your name, the name of your broker or other nominee and your account number(s). If you reside at a shared address to which a single copy of the proxy materials was delivered and you wish to receive a separate copy of the proxy materials, we will deliver such copy promptly upon written request addressed to our Secretary at 210 E. Earll Drive, Phoenix, Arizona, 85012 or by calling (602) 364-6000.
OTHEROTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
As of the date of this Proxy Statement, the only matters that the Board expects to present at the Annual Meeting are those discussed herein. If any other matter or matters are properly brought before the Annual Meeting or any adjournment thereof, it is the intention of the persons named in the accompanying form of proxy to vote on those matters in accordance with their best judgment.
annexANNEX A
USE OF NON-GAAP FINANCIAL MEASURES
The Company uses certain measures that are not defined by GAAP to evaluate various aspects of its business. Adjusted EBITDA and Adjusted EBITDA less capital expenditures are non-GAAP financial measures and should be considered in addition to, not as superior to, or as a substitute for, net income or net cash provided by operating activities reported in accordance with GAAP. Adjusted EBITDA and Adjusted EBITDA less capital expenditures are reconciled to net income in the “Reconciliations of Non-GAAP Measures” tables below. Adjusted EBITDA less capital expenditures is also reconciled to net cash provided by operating activities in the “Reconciliations of Non-GAAP Measures” tables below.
“Adjusted EBITDA” is defined as net income plus interest expense, income tax provision, depreciation and amortization, equity-based compensation, severance expense, (gain) loss on deferred compensation, acquisition-related costs, (gain) loss on asset sales and disposals, system conversion costs, rebranding costs, (gain) loss on sale of business, equity method investment earnings, other (income) expense and other unusual operating expenses, as provided in the “Reconciliations of Non-GAAP Measures” tables below. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the Company’s business as well as other non-cash or special items and is unaffected by the Company’s capital structure or investment activities. This measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the Company’s cash cost of debt financing. These costs are evaluated through other financial measures.
“Adjusted EBITDA less capital expenditures,” when used as a liquidity measure, is calculated as net cash provided by operating activities excluding the impact of capital expenditures, interest expense, income tax provision, changes in operating assets and liabilities, change in deferred income taxes and other unusual operating expenses, as defined in the “Reconciliations of Non-GAAP Measures” tables below.
The Company uses Adjusted EBITDA and Adjusted EBITDA less capital expenditures to assess its performance, and it also uses Adjusted EBITDA less capital expenditures as an indicator of its ability to fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the measure used in the leverage ratio calculations under the Company’s credit facilities and senior unsecured notes to determine compliance with the covenants contained in the Company’s credit agreement.agreement and the ability to take certain actions under the indenture governing the notes. Adjusted EBITDA and capital expenditures are also significant performance measures used by the Company in its annual incentive compensation program. Adjusted EBITDA does not take into account cash used for mandatory debt service requirements or other non-discretionary expenditures, and thus does not represent residual funds available for discretionary uses.
The Company believes Adjusted EBITDA is useful (a) in the context of this Proxy Statement because it is used as the basis for the Company’s annual incentive compensation program and (b) to investors in evaluating the operating performance of the Company. The Company believes that Adjusted EBITDA less capital expenditures is useful (y) in the context of this Proxy Statement because it is used asrelates to the performance goal for the 20172021 PSAs and (z) to investors as it shows the Company’s performance while taking into account cash outflows for capital expenditures and is one of several indicators of the Company’s ability to service debt, make investments and/or return capital to its stockholders.
Adjusted EBITDA, Adjusted EBITDA less capital expenditures and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in the Company’s industry, although the Company’s measures of Adjusted EBITDA and Adjusted EBITDA less capital expenditures may not be directly comparable to similarly titled measures reported by other companies.
Reconciliations of Non-GAAP Measures
|
| Year Ended December 31, |
| Three Years Ended | Year Ended December 31, | |||||||||||||||
(in thousands) |
| 2019 (1) |
| 2018 |
| December 31, 2019 (2) | 2020 (1) | 2019 (2) | ||||||||||||
Net income |
| $ | 178,582 |
| $ | 164,760 | $ | 577,370 | $ | 304,391 | $ | 178,582 | ||||||||
Plus: Interest expense |
|
| 71,729 |
|
| 60,415 | 179,008 | 73,607 | 71,729 | |||||||||||
Income tax provision |
|
| 55,233 |
|
| 47,224 | 58,230 | 76,317 | 55,233 | |||||||||||
Depreciation and amortization |
|
| 216,687 |
|
| 197,731 | 596,037 | 265,658 | 216,687 | |||||||||||
Equity-based compensation |
|
| 12,300 |
|
| 10,486 | 33,529 | 14,592 | 12,300 | |||||||||||
Severance expense | 215 | 2,347 | 8,023 | — | 215 | |||||||||||||||
Loss on deferred compensation |
|
| 400 |
|
| 425 | 3,578 | 231 | 400 | |||||||||||
Acquisition-related costs | 9,590 | 1,773 | 17,305 | 3,873 | 9,590 | |||||||||||||||
Loss on asset disposals, net | 7,187 | 14,167 | 21,928 | |||||||||||||||||
(Gain) loss on asset sales and disposals, net | (1,072 | ) | 7,187 | |||||||||||||||||
System conversion costs | 4,828 | 5,037 | 9,865 | 1,350 | 4,828 | |||||||||||||||
Rebranding costs | 7,294 | 968 | 8,262 | 2,731 | 7,294 | |||||||||||||||
Other (income) expense, net |
|
| 4,907 |
|
| (4,487 | ) | (248 | ) | |||||||||||
Gain on sale of business | (82,574 | ) | — | |||||||||||||||||
Equity method investment earnings | (1,376 | ) | — | |||||||||||||||||
Other expense, net | 16,411 | 4,907 | ||||||||||||||||||
Adjusted EBITDA |
| 568,952 |
| 500,846 | 1,512,887 | 674,139 | 568,952 | |||||||||||||
Less: Capital expenditures |
|
| 262,352 |
|
| 217,766 | 659,481 | 293,229 | 262,352 | |||||||||||
Adjusted EBITDA less capital expenditures |
| $ | 306,600 |
| $ | 283,080 | $ | 853,406 | $ | 380,910 | $ | 306,600 |
|
| Year Ended December 31, |
| Three Years Ended | Year Ended December 31, | |||||||||||||||
(in thousands) |
| 2019 (1) |
| 2018 |
| December 31, 2019 (2) | 2020 (1) | 2019 (2) | ||||||||||||
Net cash provided by operating activities |
| $ | 491,741 |
| $ | 407,769 | $ | 1,223,996 | $ | 574,371 | $ | 491,741 | ||||||||
Capital expenditures | (262,352 | ) | (217,766 | ) | (659,481 | ) | (293,229 | ) | (262,352 | ) | ||||||||||
Interest expense |
| 71,729 |
| 60,415 | 179,008 | 73,607 | 71,729 | |||||||||||||
Amortization of debt issuance costs | (4,646 | ) | (4,163 | ) | (11,983 | ) | (4,305 | ) | (4,646 | ) | ||||||||||
Income tax provision |
| 55,233 |
| 47,224 | 58,230 | 76,317 | 55,233 | |||||||||||||
Changes in operating assets and liabilities |
| (18,118 | ) |
| 18,621 | 20,411 | 40,426 | (18,118 | ) | |||||||||||
Increase (decrease) in deferred income taxes | (50,011 | ) | (34,973 | ) | 1,373 | |||||||||||||||
Decrease in deferred income taxes | (87,182 | ) | (50,011 | ) | ||||||||||||||||
Loss on deferred compensation |
| 400 |
| 425 | 3,578 | 231 | 400 | |||||||||||||
Acquisition-related costs | 9,590 | 1,773 | 17,305 | 3,873 | 9,590 | |||||||||||||||
Severance expense | 215 | 2,347 | 8,023 | — | 215 | |||||||||||||||
Write-off of debt issuance costs | (4,210 | ) | (110 | ) | (4,933 | ) | (6,181 | ) | (4,210 | ) | ||||||||||
System conversion costs | 4,828 | 5,037 | 9,865 | 1,350 | 4,828 | |||||||||||||||
Rebranding costs | 7,294 | 968 | 8,262 | 2,731 | 7,294 | |||||||||||||||
Other (income) expense, net |
|
| 4,907 |
|
| (4,487 | ) | (248 | ) | |||||||||||
Fair value adjustments | (17,510 | ) | — | |||||||||||||||||
Other expense, net | 16,411 | 4,907 | ||||||||||||||||||
Adjusted EBITDA less capital expenditures |
| $ | 306,600 |
| $ | 283,080 | $ | 853,406 | $ | 380,910 | $ | 306,600 |
(1) | Includes Valu-Net operations and excludes Anniston operations for the periods beginning July 1, 2020 and October 1, 2020, respectively, the dates on which each was acquired or divested, as applicable. |
(2) | Includes Clearwave and Fidelity operations for the periods beginning January 8, 2019 and October 1, 2019, respectively, the |
|
|
ANNEX B
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CABLE ONE, INC.
Cable One, Inc. (the “Corporation”), a corporation organized and existing under the lawsGeneral Corporation Law of the State of Delaware, (the “DGCL”), DOES HEREBY CERTIFY AS FOLLOWSdoes hereby certify as follows:
1. The name of the corporation is Cable One, Inc. The original Certificate of Incorporation of the corporation was filed with the Secretary of State of the State of Delaware on October 14, 1980 (as amended and in effect immediately prior to the adoption and effectiveness hereof, the “Original ), and it was amended and restated by an Amended and Restated Certificate of Incorporation”),and thefiled with the Secretary of State of the State of Delaware on June 30, 2015 and effective as of July 1, 2015 (the “Prior Amended and Restated Certificate of Incorporation”). The name under which the corporation was originally incorporated is Capital Cities Cable of Delaware, Inc.
2. This Amended and Restated Certificate of Incorporation, which restates and further amends the Prior Amended and Restated Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware and shall be effective as of 12:01 a.m. Eastern Daylight Time on July 1, 2015DGCL.
3. The OriginalPrior Amended and Restated Certificate of Incorporation is hereby amended and restated to read in its entirety as follows:
ARTICLE I
The name of the corporation (hereinafter called the “Corporation”) is Cable One, Inc.
ARTICLE II
The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of DelawareDGCL.
ARTICLE IV
SECTION 1. The total number of shares of all classes of stock which the Corporation shall have authority to issue is 44,000,000 shares, consisting of (1) 4,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”), and (2) 40,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”). The number of authorized shares of either the Preferred Stock or the Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of the State of DelawareDGCL (or any successor provision thereto), and no vote of the holders of either the Preferred Stock or the Common Stock voting separately as a class shall be required therefor.
SECTION 2. The Board of Directors of the Corporation (the “Board of Directors”) is hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.
SECTION 3. (a) Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) or pursuant to the General Corporation Law of the State of DelawareDGCL.
(b) Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be entitled only to such voting rights, if any, as shall expressly be granted to such holders by this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series).
(c) Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the Corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the Common Stock, as such, shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them.
ARTICLE V
SECTION 1. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. Except as otherwise fixed pursuant to the terms of any outstanding series of Preferred Stock pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series of Preferred Stock), the number of the directors of the Corporation shall be fixed from time to time by the Board of Directors. The directors, other than those who may be elected by the holders of any series of Preferred Stock voting separately pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series of Preferred Stock), shall be elected by the stockholders entitled to vote thereon at each annual meeting of the stockholders. The directors of the Corporation shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. If the number of directors has changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors constituting the Board of Directors shorten the term of any incumbent director. The initial assignment of directors to each such class shall be made by the Board of Directors. The term of office of the initial Class I directors shall expire at the 2016Notwithstanding the foregoing, except for the terms of such additional directors, if any, as elected by the holders of any series of Preferred Stock, (a) the term of office of the Class III directors elected at the 2018 annual meeting of stockholders shall expire at the 2021 annual meeting of stockholders, the term of office of the initial Class II I directors shall expire elected at the 2017 2019 annual meeting of stockholders and the term of office of the initial Class III directors shall expire at the 2018 annual meeting of stockholders. At each 2022 annual meeting of stockholders, commencing in 2016, each of the successors elected to replace the directors of a class whose term of office shall have expired at such annual meeting shall be elected to hold office until the third and the term of office of the Class II directors elected at the 2020 annual meeting of stockholders shall expire at the 2023 annual meeting of stockholders; and (b) at each annual meeting of stockholders commencing in 2021, each director elected by stockholders shall serve for a term expiring at the annual meeting of stockholders next following his or her election and shall remain in office until his or her successor shall have been elected and qualified. Effective as of the 2023 annual meeting of stockholders, the Board of Directors will no longer be classified under Section 141(d) of the DGCL. In no case will a decrease in the number of directors constituting the Board of Directors shorten the term of any incumbent director. The election of directors need not be by written ballot.
SECTION 2. Advance notice of nominations for the election of directors shall be given in the manner and to the extent provided in the By-laws of the Corporation.
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SECTION 3. (a) Except as otherwise provided for or fixed by or pursuant to the provisions of this Amended and Restated Certificate of Incorporation relating to the rights of the holders of any outstanding series of Preferred Stock (including any Certificate of Designation relating to such series of Preferred Stock), newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, retirement, removal or other cause shall only be filled by the Board of Directors by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, or if not so filled, by the stockholders at the next annual meeting thereof. Any director elected in accordance with the preceding sentence of this Section 3 shall hold office for a term that shall coincide with the remaining term of the class such director is elected to and until such director’s successor shall have been elected and qualified., or, following the termination of the classification of the Board of Directors, directors so elected shall serve for a term expiring at the next annual meeting of stockholders, and in all cases, subject to the election and qualification of a successor and to such director’s earlier death, resignation, retirement or removal. Subject to the rights of the holders of any series of Preferred Stock then outstanding with respect to any directors elected by the holders of such series, (i) any director serving in a class of directors elected for a term expiring at the third annual meeting of stockholders following the election of such class shall be removable only for cause, and all other directors shall be removable either with or without cause, and (ii) the removal of any director, whether with or without cause, shall require the affirmative vote of the holders of a majority of the voting power of thecapital stock of the Corporation outstanding and entitled to vote thereon.
(b) Any director or the entire Board of Directors may only be removed for cause, such removal to require the affirmative vote of shares representing at least a majority of the votes entitled to be cast by the then outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote on the election of the directors of the Corporation. Notwithstanding the foregoing, whenever Whenever holders of outstanding shares of one or more series of Preferred Stock voting separately are entitled to elect directors of the Corporation pursuant to the provisions of this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series of Preferred Stock), any such director of the Corporation so elected may be removed in accordance with this Amended and Restated Certificate of Incorporation (including such Certificate of Designation).
ARTICLE VI
Subject to the rights of the holders of any outstanding series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. Except as otherwise required by law and subject to the rights of the holders of any outstanding series of Preferred Stock, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors or as otherwise provided in the By-laws of the Corporation.
ARTICLE VII
SECTION 1. To the extent deemed necessary or appropriate by the Board of Directors to enable the Corporation to engage in any business or activity directly or indirectly conducted by it in compliance with the laws of the United States as now in effect or as they may hereafter from time to time be amended, the Corporation may adopt such By-laws as may be necessary or advisable to comply with the provisions and avoid the prohibitions of any such law. Without limiting the generality of the foregoing, such By-laws may restrict or prohibit the transfer of shares of stock of the Corporation to, and the voting of such stock by, aliens or their representatives, or corporations organized under the laws of any foreign country or their representatives, or corporations directly or indirectly controlled by aliens or by any such corporation or representative.
SECTION 2. In furtherance and not in limitation of the powers conferred upon it by law, the Board of Directors is expressly authorized to adopt, repeal, alter or amend the By-laws of the Corporation by the vote of a majority of the entire Board of Directors or such greater vote as shall be specified in the By-laws of the Corporation. In addition to any requirements of law and any other provision of this Amended and Restated Certificate of Incorporation (and notwithstanding the fact that a lesser percentage may be specified by law), the affirmative vote of the holders of 66 2/3% of the combined voting power of the then outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote in the election of directors of the Corporation, voting together as a single class, shall be required for stockholders to adopt, amend, alter or repeal any provision of the By-laws of the Corporation.
ARTICLE VIII
The Corporation reserves the right to amend, alter or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are subject to this reservation.
ARTICLE IX
SECTION 1. To the fullest extent that the General Corporation Law of the State of Delaware DGCL or any other law of the State of Delaware as it exists or as it may hereafter be amended permits the limitation or elimination of the liability of directors, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.
SECTION 2. To the fullest extent that the General Corporation Law of the State of Delaware DGCL or any other law of the State of Delaware as it exists or as it may hereafter be amended permits, the Corporation may provide indemnification of (and advancement of expenses to) its current and former directors, officers and agents (and any other persons to which the General Corporation Law of the State of Delaware DGCL permits the Corporation to provide indemnification) through By-law provisions, agreements with such agents or other persons, votes of stockholders or disinterested directors or otherwise.
SECTION 3. No amendment to or repeal of any Section of this Article IX, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any matter occurring, or any action or proceeding accruing or arising, prior to such amendment, repeal or adoption of an inconsistent provision.
ARTICLE X
Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the stockholders, (c) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware DGCL (or any successor provision thereto) or (d) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware does not have jurisdiction, any other state or federal court located within the State of Delaware. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article X.
[Signature Page Follows]
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In witness whereof, the undersigned has caused this Amended and Restated Certificate of Incorporation to be signed by its duly authorized officer on this [●] day of [●], 2020.
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