| ■
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. During 2021, the members of the Audit Committee consisted of Mses. Kissire, Meduski and Weymouth. In February 2022, the composition of the Audit Committee was changed to consist of Mses. Kissire, Meduski and Smith and Mr. Weitz. The Board has determined that each of Mses. Kissire and Meduski has the requisite background and experience to be and was designated an “audit committee financial expert” within the meaning of Item 407(d)(5)(ii) of Regulation S-K due to their 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 and Talent Management Committee The functions of the C&TM Committee include, among other duties: | reviewing and approving the compensation of other members of our senior management;
| ■ | determining and approving the compensation of our Chief Executive Officer; |
| ■ | reviewing and approving the compensation of our other executive officers; |
| ■ | overseeing the development and implementation of our compensation plans; |
| ■ | overseeing our human capital programs, policies and practices, which may include associate development, talent management, organizational culture and diversity and inclusion initiatives (in each case 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. |
| ■
| overseeing the administration and determination of awards under our compensation plans; and
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| ■
| preparing any report on executive compensation required by the rules and regulations of the SEC.
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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 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”).
All members of the C&TM 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. Executive Committee The functions of the Executive Committee include, among other duties:include: | ■ | reviewing and providing guidance to the Board and to senior management of the Company from time to time regarding the Company’s strategy, operating plans and operating performance; and |
| ■ | performing such other duties or responsibilities as may be delegated to the Executive Committee from time to time by the Board. |
Cable One, Inc. ▪ 2022 Proxy Statement | | 21 |
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 ourthe Board amendments to our By-laws, Charter,by-laws, certificate of incorporation, committee charters and other governance policies; |
| ■ | reviewing and making recommendations to our Board regarding the structure of our various board committees; |
16 | Cable One, Inc. ▪ 2020 Proxy Statement
| ■ | 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.governance; and | | | | | ■ | overseeing corporate governance-related risks associated with our governance practices and profile and cybersecurity matters. |
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. During 2021, the members of the Nominating and Governance Committee consisted of Messrs. Brian and Gayner and Mses. Meduski, Miller and Smith. In February 2022, the composition of the Nominating and Governance Committee was changed to consist of Messrs. Brian and Gayner and Mses. Meduski and Smith. 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, copies of 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. 22 | | Cable One, Inc. ▪ 2022 Proxy Statement |
Proxy Access On February 14, 2022, the Board amended our By-laws by adopting a new “proxy access” by-law. The proxy access by-law permits a stockholder, or a group of up to 20 stockholders, owning at least three percent of our outstanding stock continuously for at least three years to nominate and include in our annual meeting proxy materials director nominees constituting up to the greater of two directors or twenty-five percent of the Board, subject to certain conditions and provided that the stockholder(s) and nominee(s) satisfy all eligibility, procedural and disclosure requirements specified in the By-laws, including that each director nominee submitted through the proxy access by-law must meet the qualifications to be an independent director. Director Nomination Process Under our By-laws, except as set forth above under “—Proxy Access,” 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, except as set forth above under “—Proxy Access”, stockholders wishing to nominate persons for election to our Board must provide timely notice to the Company in accordance with applicable SEC rules and regulations. See “Stockholder Proposals; Director Nominations and Other Business for the event a stockholder2023 Annual Meeting 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.Stockholders.” Cable One, Inc. ▪ 2020 Proxy Statement | 17
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 our 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, Ms. Miller, Mr. Spoon,Ms. Smith, Mr. Weitz and Ms. Weymouth. Cable One, Inc. ▪ 2022 Proxy Statement | | 23 |
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 2019,2021, 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 20202022 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. 18 | Cable One, Inc. ▪ 2020 Proxy Statement
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 had or will have the following effects: | ■
| the nominees elected as Class II directors at the Annual Meeting will be elected for a three-year term;
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| ■ | the nominees elected at the 2021 Annual Meeting of Stockholders (and at each subsequent annual meeting) will bewere elected for one-year terms; |
| ■ | 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 CompensationC&TM 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. 24 | | Cable One, Inc. ▪ 2022 Proxy Statement |
Risk oversight activities are supported by internal reporting structures that aimdesigned 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. Other Governance Matters 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. Cable One, Inc. ▪ 2020 Proxy Statement | 19
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, attended our 20192021 Annual Meeting of Stockholders.Stockholders virtually, except Mr. Gayner and Ms. Laulis who both attended in person. Compensation Committee Interlocks and Insider Participation Messrs. Brian and Weitz and Mses. Miller and Weymouth served as members of the CompensationC&TM Committee in 2019.2021. None of these individuals has ever been an employee of the Company. During 2019,2021, 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 CompensationC&TM Committee served as an executive officer. Corporate Governance Policies Related to Compensation and Equity Please refer to the section entitledread “Compensation Discussion and Analysis—Analysis—Corporate Governance Policies” beginning on page 34 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. Cable One, Inc. ▪ 2022 Proxy Statement | | 25 |
20 | Cable One, Inc. ▪ 2020 Proxy Statement
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, 2019,2021, 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, 20202022 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, 20192021 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 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. 26 | | Cable One, Inc. ▪ 2022 Proxy Statement |
Cable One, Inc. ▪ 2020 Proxy Statement | 21
Audit and Other Fees The following table provides information regarding the aggregate fees billed to the Company for professional services rendered by PwC for 20192021 and 2018.2020. | | 2019 | | | 2018 | | | 2021 | | | 2020 | | Audit Fees (1) | | $ | 2,675,539 | | | $ | 2,017,035 | | | $ | 3,078,427 | | | $ | 2,639,156 | | Audit-Related Fees (2) | | | 16,000 | | | | 120,969 | | | | 6,293 | | | | 15,453 | | Tax Fees | | | — | | | | — | | | | — | | | | — | | All Other Fees (3) | | | 4,000 | | | | 3,000 | | | All Other Fees (3) | | | | 7,800 | | | | 2,700 | | Total | | $ | 2,695,539 | | | $ | 2,141,004 | | | $ | 3,092,520 | | | $ | 2,657,309 | |
(1) | Audit fees for 20192021 and 20182020 related to the annual audit and reviews of financial statements included in the Company’s quarterly filings, including reimbursable expenses. Audit fees for 20192021 also related to various procedures performed in connection with the review of financial statementsCompany’s Hargray and other financial information ofCableAmerica acquisitions, enterprise resource planning system implementation, convertible notes private offering and Clearwave and Fidelity as well as servicesFiber transaction. Audit fees for 2020 also related to various procedures performed in connection with the new lease accounting standard, Accounting Standards Codification Topic 842 – Leases.Company’s common stock and senior notes private offerings and the Hargray and Mega Broadband Investments Holdings LLC investments. | | |
(2) | Audit-related fees for 20192021 and 20182020 related to assurance and other services reasonably related to the performance of the audit or reviews of financial statements and not included under “Audit Fees” above, including reimbursable expenses. | | |
(3)(3)
| All other fees for 20192021 and 20182020 related to software licensing for finance and accounting research tools provided by PwC. |
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, 2020.2022. Cable One, Inc. ▪ 2022 Proxy Statement | | 27 |
22 | Cable One, Inc. ▪ 2020 Proxy Statement
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS
Compensation Discussion and Analysis
Executive Summary Named Executive Officers This Compensation Discussion and Analysis describes the compensation of our NEOs“name executive officers” or “NEOs” named in the 20192021 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 | | Senior Vice President and Chief Financial Officer (“CFO”)
| EricMegan M. LardyDetz (1)
| | Senior Vice President
| Peter N. Witty
| | Senior Vice President, General Counsel and SecretaryHuman Resources | Todd M. Koetje (2) | | Senior Vice President, Business Development & Finance |
(1) | Effective May 3, 2021, Ms. Detz was appointed Senior Vice President, Human Resources. | (2) | Effective September 1, 2021, Mr. Koetje was appointed Senior Vice President, Business Development & Finance. |
20192021 Operational Highlights
We delivered another year of strong operational and financial performance in 2019, which resulted in significant value creation for our stockholders,2021, highlighted by the following actions and metrics. For additional information regarding some of our accomplishments in 2021, please read the discussion under “Proxy Statement Summary – 2021 Strategic, Operational Highlightsand Financial Highlights.” | ■ | We rebrandedDriven by strong organic growth, low customer churn and strategic M&A activity, we added approximately 180,000 residential data customers year-over-year, an increase of 23.2%. Excluding the acquisitions we closed throughout the year, we added approximately 50,000 residential data customers in 2021, completing one of our consumer-facing business from Cable One to Sparklight®. This change embodies our transformation from a traditional cable company to a high-speed data-centric provider that seamlessly connects customers to the things they care about most.strongest organic growth years on record.
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| ■ | We continuedexperienced significant growth in business data customers and revenues during 2021, and our workbusiness services revenues increased $74.1 million, or 31.6%, in 2021 as compared to further bridge the digital divide in rural communities across our footprint, including deploying gigabit service in more than 200 communities in our NewWave Communications (“NewWave”) markets. We now offer gigabit service to more than 97% of our homes passed.2020. |
| ■ | We completed virtually all integration activities following our May 2017 acquisitionOur net income was $291.8 million in 2021, a decrease of NewWave by the close of 2019, ahead of our original schedule. We expect to realize additional4.1% year-over-year. Our 2021 Adjusted EBITDA growthwas $839.3 million, an increase of 24.5% year-over-year. See Annex A of this Proxy Statement, entitled “Use of Non-GAAP Financial Measures,” for the definition of Adjusted EBITDA and margin expansion in those markets as we fully capturea reconciliation of Adjusted EBITDA to net income, which is the run-rate synergies from the acquisition.most directly comparable measure under GAAP.
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| ■ | In January 2019, we acquired Clearwave, which expanded our fiber footprint and enterprise business segment, providing a premier fiber network that further enables us to supply customers with enhanced business services solutions. In October 2019, we acquired Fidelity, which shares similar strategies, customer demographics and products and provides us with opportunities for revenue growth and Adjusted EBITDA margin expansion as well as the potential to realize cost synergies.
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Financial Highlights
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| Net incomeOur net cash provided by operating activities was $178.6$704.3 million in 2019,2021, an increase of 8.4%22.6% year-over-year. Our 2021 Adjusted EBITDA less capital expenditures was $447.4 million, an increase of 17.5% year-over-year. See Annex A of this Proxy Statement for the definition of Adjusted EBITDA less capital expenditures and reconciliations to net income and net cash provided by operating activities, as applicable, which are the most directly comparable measures under GAAP.
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| ■ | Adjusted EBITDA was $569.0 million, an increase of 13.6% year-over-year.During 2021, we (i) acquired the remaining approximately 85% equity interest that we did not already own in Hargray, a data, video and voice services provider to residential and business customers throughout Alabama, Florida, Georgia and South Carolina; (ii) acquired certain assets and assumed certain liabilities from CableAmerica, a data, video and voice services provider in central Missouri; and (iii) completed several strategic investments to further our vision to provide high-quality broadband service to small cities and large towns throughout rural America.
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28 | ■
| Net cash provided by operating activities was $491.7 million, an increase of 20.6% year-over-year.
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| Adjusted EBITDA less capital expenditures was $306.6 million, an increase of 8.3% year-over-year.
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| Total stockholder return as of December 31, 2019 was 82.8% on a one-year basis and 35.0% on a compounded three-year basis. Cable One, Inc. ▪ 2022 Proxy Statement |
Cable One, Inc. ▪ 2020 Proxy Statement | 23
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 Companycompany 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 continuing executives are based on financial operating performance against pre-defined objective goals (with no discretion to increase payouts). |
| ✓ | The CompensationC&TM Committee engages an independent compensation consultant. |
| ✓ | We maintain robust executive and non-employee director stock ownership guidelines. |
| ✓ | Our Clawback Policy allowsprovides for the forfeiture of outstanding incentive compensation and the recoupment of previously paid incentive compensation in the event of financial restatements, legal or compliance violations and various forms of misconduct. |
| ✓ | We prohibit all executives and directors from hedging and pledging of our securities.securities by all executives, directors and other members of our restricted trading population. |
| ✓ | The CompensationC&TM Committee conducts an annual risk assessment of our compensation program. |
| ✓ | We do not provide any “single trigger” acceleration of payments or benefits upon a change of control of the Company. |
| ✓ | We generally 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.Neither of the existing 2015 Plan or the proposed 2022 Omnibus Incentive Compensation Plan as amended and restated (the “2015 Plan”) does not allowallows for the repricing of options or SARs without stockholder approval.approval nor does either plan contain an “evergreen” or automatic share replenishment provision.
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Our Board and the CompensationC&TM Committee greatly value the benefits of maintaining a dialogue with our stockholders to understand their views on our executive compensation program and practices. The CompensationC&TM Committee considers the outcome of say-on-pay votes and is devoted to consistently reviewing and enhancing our compensation programs. At our 20192021 Annual Meeting of Stockholders, more thannearly 98% of the votes cast were in favor of our say-on-pay proposal. After evaluating the outcome of the 20192021 say-on-pay vote and based upon input from the CompensationC&TM Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), the CompensationC&TM Committee determined thatnot to make any fundamental changes to the existing structure of our executive compensation program and believes our program is appropriately aligned with our compensation philosophy and our business strategy. Highlights of Our 2021 Executive Compensation Program and Practices The Compensation Committee believes that ourOur 2021 executive compensation program supports our performance-based executive compensation philosophy, which is appropriately designed to advancedescribed 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 interests through effective performance-based incentives with retention features. The primary components and associated purposes of our compensation program are as follows:return were above industry peers across most major performance metrics that were evaluated. For 2021:
| ■ | Base Salary — Provide the security of a– We increased base salaries for each continuing NEO based on individual and Company performance and to partially address shortfalls compared to competitive fixed cash payment for services rendered.market levels. |
Cable One, Inc. ▪ 2022 Proxy Statement | | ■
| Annual Cash Incentives — Motivate superior annual performance and support our objectives by tying any payout to achievement against pre-established operating goals.29
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24 | Cable One, Inc. ▪ 2020 Proxy Statement
| ■ | Annual Cash Incentives – We changed the bonus goal metrics from year-over-year Adjusted EBITDA growth and adjusted capital expenditures as a percentage of adjusted total revenues in 2020 to year-over-year Adjusted EBITDA growth and adjusted capital expenditures as a percentage of Adjusted EBITDA in 2021 in order to align with our internal focus on these metrics as part of the management of our business. The target bonus percentages for each continuing NEO were set at the same level as their respective 2020 target bonus percentages. |
| ■ | Long-Term Equity Incentives — Support– The majority of annual equity grant value was provided through performance-based restricted stock awards (“PSAs”) with the retentionbalance in time-based restricted stock awards (“RSAs”). The mix of executives2021 equity grants was more performance-based than typical market practice while also supporting executive retention. 2021 equity grant values were comprised of approximately 60% PSAs and align40% RSAs for Ms. Laulis and Mr. Bowker and 50% PSAs and 50% RSAs for Mr. Cochran. Ms. Detz and Mr. Koetje did not participate in our 2021 annual equity program, instead each of them received equity awards that were determined in connection with their hirings in May 2021 and September 2021, respectively. |
Our Executive Compensation Program and Practices We believe that our executive compensation program is appropriately designed to advance stockholder interests through performance-based incentives tied to key financial drivers of long-term stockholder value along with appropriate retention incentives. The primary components of our compensation program and associated purposes are as follows: | ■ | Base Salary – Provide the security of a competitive fixed cash salary for services rendered. |
| ■ | Annual Cash Incentives – Motivate strong annual performance and support our objectives by tying any payout to achievement against pre-established financial goals. |
| ■ | Long-Term Equity Incentives – Align the interests of executives with those of our long-term stockholders by motivating them to build stockholder value over the life of the grants and beyond. We generally tie thebeyond and supporting retention. The majority of annual long-term equity incentives for most of our executives are tied to achievement against pre-established long-term operatingfinancial goals (through performance-based restricted stock awards (“PSAs”)) or the appreciation of our common stock (through stock appreciation rights (“SARs”)).through PSAs supplemented by RSAs that include a time-based retention component. Newly hired or promoted executives have typically receive an initialreceived long-term equity incentiveincentives in the form of time-based restricted stock awards (“RSAs”),RSAs and SARs, which are intended to support direct alignment with the interests of our long-term stockholders. |
| ■ | Other Benefits —– Provide other benefits that are competitive and consistent with the market, including health and welfare benefits that are broadly uniform with those offered to all full-time employees; minimal perquisites, such as relocation and temporary housing assistance for newly hired executives; and limited severance benefits in the event of involuntary termination, which generally provide for partial vesting of outstanding equity awards.termination. |
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.at-risk (excluding newly hired or promoted executives). The CompensationC&TM 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. 30 | | Cable One, Inc. ▪ 2022 Proxy Statement |
The following charts show an overview of the components of 20192021 target total direct compensation for our CEO and our other NEOs (excluding our two newly hired NEOs) and the percentage that is at-risk. Objectives of Our Executive Compensation Program OurWe believe our performance-based compensation philosophy for executive officers provides incentives to achieve both short- and long-term business objectives, alignobjectives; aligns the interests of our executive officers and long-term stockholdersstockholders; and ensure that we canenables us to 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 by executives and by rewarding stockholder value creation. |
Cable One, Inc. ▪ 2020 Proxy Statement | 25
| ■ | Reflect our pay-for-performance philosophy. |
| ■ | Ensure that total compensation opportunities are competitive. |
Role of the CompensationC&TM Committee and the CEO The purpose of the C&TM Committee is to: (i) assist the Board has delegatedin discharging its responsibilities relating to the Compensation Committeecompensation of our executive officers and the responsibility of overseeingBoard; (ii) oversee the administration of our compensation plans and the preparation of all related reports and documentsbenefit plans; (iii) prepare any report on executive compensation required by the rules and regulations of the SEC.SEC or other applicable rules or regulations; and (iv) perform such other duties or responsibilities as may be delegated to the committee from time to time by the Board. In addition, the C&TM Committee oversees our human capital programs, policies and practices, which may include associate development, talent management, organizational culture and diversity and inclusion initiatives, in each case, except with respect to matters that are within the scope of responsibility of another committee of the Board. The CompensationC&TM Committee annually reviews and approves the corporate goals and objectives upon which theour executive compensation program is based. The CompensationC&TM Committee evaluates the CEO’s performance in light of these goals and objectives. Furthermore, the CompensationC&TM 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.approval, including the 2022 Omnibus Plan discussed elsewhere in this Proxy Statement. Cable One, Inc. ▪ 2022 Proxy Statement | | 31 |
The CompensationC&TM Committee generally meets at least quarterly throughout the year and may meet more often, as required, to address ongoing events. In 2019,2021, the CompensationC&TM Committee met four times. Meeting agendas are determined by the Chair of the CompensationC&TM Committee with the assistance of our CEO. Our CEO attended all CompensationC&TM Committee meetings held during 2019.2021. At the CompensationC&TM Committee meetings,held in the fourth quarter of 2021, our CEO made recommendations to the CompensationC&TM Committee regarding the annual base salary, annual cash incentive compensation and equity compensation of our NEOs (other than our CEO).herself) for 2022. In general, a representative from the CompensationC&TM Committee’s independent compensation consultant, FW Cook, and legal counsel also attends Compensationattend C&TM Committee meetings. Compensation Setting Process The CompensationC&TM Committee determinedreviewed and approved the compensation of each of our NEOs for 2019.2021. 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 CompensationC&TM 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 CompensationC&TM Committee does not target a specific percentile for pay, but instead examines external market data of our industry peer group (described in the section entitledbelow under “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,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 CompensationC&TM Committee has the sole authority to retain and dismiss an independent compensation consultant. In 2019,2021, the CompensationC&TM 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 2019.2021. FW Cook performs services solely on behalf of the CompensationC&TM Committee and has no relationship with the Company or management except as it may relate to performing such services. The CompensationC&TM 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 CompensationC&TM Committee. Use of Peer Companies In determining our NEOs’ 20192021 compensation, the CompensationC&TM Committee, with the help of FW Cook, compared each element of compensation to that of a related industry peer group.group for the purpose of assessing the competitiveness of our NEO’s compensation. 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 used to provide market context for 2021 compensation decisions, across key size metrics, we were generally in a 40th-to-75th45th-to-80th percentile range versus our peers. Our trailing four quarter revenues and employee headcount were near the 40th45th percentile, EBITDA was near the 65th percentile and market capitalization value (current and 12-month average) approximated the 75th80th percentile. 26 | Cable One, Inc. ▪ 2020 Proxy Statement
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 ofFor 2021, our peer group was revised to include the companies listed 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. The following chart shows the peer group developed by us for determining our NEOs’ 2019 compensation.chart. 32 | | Cable One, Inc. ▪ 2022 Proxy Statement |
20192021 NEO Compensation Peer Group(1)
| Akamai Technologies | COGECOCogeco Inc.
| GogoIridium Communications Inc.
| ViaSat, Inc. | Altice USA, Inc. | Cogent Communications Holdings, Inc. | NII HoldingsShaw Communications Inc.
| Vonage Holdings Corp. | ATN International | Consolidated Communications | Shenandoah Telecommunications | WideOpenWest, Inc. | Cincinnati Bell(2) | GCI Liberty(3) | Telephone and Data Systems, Inc. | |
(1) | The 2021 peer group was comprised of the same companies as were included in our 2020 peer group, except for the addition of Iridium Communications and Shaw Communications and the removal of Gogo, NII Holdings and Zayo Group HoldingsHoldings. | (2) | Cincinnati Bell was acquired in September 2021 and is no longer publicly traded. | (3) | GCI Libery was acquired in December 2020 and is no longer publicly traded. |
In determining the structure of our 20192021 executive compensation program as well as the individual pay levels of our NEOs, the CompensationC&TM 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 2022, the following changes were made to the composition of our peer group: (i) three companies were added who are all in related industries and whose inclusion helps position us in a median size range in the peer group – Arista Networks, Inc., Frontier Communications Parent, Inc. and Lumen Technologies, Inc.; and (ii) five companies were removed – ATN International, Consolidated Communications Holding, Inc. and Shenandoah Telecommunications (each of which fell below the applicable size criteria), and Cincinnati Bell and GCI Liberty (acquired and no longer publicly traded). Elements of Our Compensation Program Base Salary The CompensationC&TM 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 CompensationC&TM Committee takes into account competitive considerations, changes in responsibilities, individual performance, tenure in position, internal pay equity, succession planning, Company performance, market data for individuals in similar positions, retention, relative cost of living and advice from ourthe C&TM Committee’s independent compensation consultant. The CompensationC&TM 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 CompensationC&TM Committee’s judgment. As part of the annual review process, Mr. Lardy received a base salary increase for 2019 based on individual performance and to more closely align him with competitive market salary levels. Base salaries for our other NEOs were flat between 2018 and 2019. The table below reflects 20192021 base salary amounts as reported inapproved by the 2019 Summary Compensation Table,C&TM Committee (including the annualized 20182021 base salary amounts for Ms. Detz and Mr. Koetje), 2020 base salary amounts and the dollar and percent change from 20182020 base salary amounts for allcontinuing NEOs.
Name | | 2019 Base Salary | | Annualized 2018 Base Salary | | $ Change | | % Change | | 2021 Base Salary | | 2020 Base Salary | | $ Change | | % Change | Julia M. Laulis | | $575,000 | | $575,000 | | — | | — | | $740,000 | | $725,000 | | $15,000 | | 2.1% | Michael E. Bowker | | $360,000 | | $360,000 | | — | | — | | $395,000 | | $385,000 | | $10,000 | | 2.6% | Steven S. Cochran | | $325,000 | | $325,000 | | — | | — | | $395,000 | | $380,000 | | $15,000 | | 3.9% | Eric M. Lardy | | $253,000 | | $220,000 | | $33,000 | | 15.0% | | Peter N. Witty | | $315,000 | | $315,000 | | — | | — | | Megan M. Detz | | | $250,000 | | N/A | | N/A | | N/A | Todd M. Koetje | | | $275,000 | | N/A | | N/A | | N/A |
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,with respect to 2021, expressed as a percentage of such executive’s base salary, pursuant to the 20192021 Annual Executive Bonus Plan.Plan (the “2021 Bonus Plan”). The 20192021 Bonus Plan provided for payouts based on our financial performance compared to goals set immediately prior to the beginning of 2019.2021. The table below reflects the target bonus as a percentage of base salary for 2019, which target bonus percentage amounts were the same as in 20182021 and 2020 for all NEOs.each NEO. Cable One, Inc. ▪ 2022 Proxy Statement | | 33 |
Cable One, Inc. ▪ 2020 Proxy Statement | 27
Name
| | 2019 Target Bonus Percentage
| Julia M. Laulis
| | 100%
| Michael E. Bowker
| | 75%
| Steven S. Cochran
| | 70%
| Eric M. Lardy
| | 50%
| Peter N. Witty
| | 50%
|
Name | | 2021 Target Bonus Percentage | | 2020 Target Bonus Percentage | | % Change | Julia M. Laulis | | 100% | | 100% | | — | Michael E. Bowker | | 75% | | 75% | | — | Steven S. Cochran | | 75% | | 75% | | — | Megan M. Detz | | 50% | | N/A | | N/A | Todd M. Koetje | | 50% | | N/A | | N/A |
Payouts are capped at 200% of target, and the CompensationC&TM 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 20192021 Bonus Plan were subject to the attainment of goals related to Adjusted EBITDA growth and adjusted capital expenditures as a percentage of total revenues.Adjusted EBITDA. In order to determine Adjusted EBITDA, we begin with our net income (as defined under GAAP and described in our 20192021 Annual Report on Form 10-K, filed with the SEC on February 28, 202025, 2022 (the “2019“2021 Form 10-K”)) and adjust for the items as defined and calculated in Annex A of this Proxy Statement. Furthermore, for purposes of the 20192021 Bonus Plan, the Compensation Committee adjusted the calculationcalculations of Adjusted EBITDA growth and capital expenditures as a percentage of total revenuesAdjusted EBITDA were adjusted pursuant to a pre-established list of adjustments approved by the C&TM Committee as part of the approval of the 2021 Bonus Plan, which in 2019 related to acquired or divested businesses or assets (i.e., Clearwave, FidelityValu-Net, Hargray 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 below showing our performance results under the 20192021 Bonus Plan below. We believe that the combination of Adjusted EBITDA growth and adjusted capital expenditures as a percentage of total revenuesAdjusted EBITDA 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 20192021 Bonus Plan using the following table (with any values between points on the table determined based on linear interpolation):below: | ■ | 20192021 Adjusted EBITDA growth over 20182020 Adjusted EBITDA (subject to adjustment as provided above, to the extent applicable); and
|
| ■ | 20192021 adjusted capital expenditures as a percentage of total revenues2021 Adjusted EBITDA (subject to adjustment as provided above, to the extent applicable).
|
| | | | | Adjusted EBITDA Growth | | | | | | | Thresh. | | | | | | | | | | | | | | | Target | | | | | | | | | | | | | | Max. | | | | | | | | <0% | | | 0% | | | 1% | | | 2% | | | 3% | | | 4% | | | 5% | | | 6% | | | 7% | | | 8% | | | 9% | | | 10% | | Adjusted Capital Expenditures as a % of Adjusted Total Revenues | Max. | 15 | % | | | 0% | | | 65% | | | 78% | | | 91% | | | 104% | | | 117% | | | 130% | | | 156% | | | 182% | | | 200% | | | 200% | | | 200% | | | 16 | % | | | 0% | | | 61% | | | 74% | | | 86% | | | 98% | | | 110% | | | 123% | | | 147% | | | 172% | | | 196% | | | 200% | | | 200% | | | 17 | % | | | 0% | | | 58% | | | 69% | | | 81% | | | 92% | | | 104% | | | 115% | | | 138% | | | 161% | | | 184% | | | 200% | | | 200% | | | 18 | % | | | 0% | | | 54% | | | 65% | | | 75% | | | 86% | | | 97% | | | 108% | | | 129% | | | 151% | | | 172% | | | 194% | | | 200% | | Target | 19 | % | | | 0% | | | 50% | | | 60% | | | 70% | | | 80% | | | 90% | | | 100% | | | 120% | | | 140% | | | 160% | | | 180% | | | 200% | | | 20 | % | | | 0% | | | 45% | | | 54% | | | 63% | | | 72% | | | 81% | | | 90% | | | 108% | | | 126% | | | 144% | | | 162% | | | 180% | | | 21 | % | | | 0% | | | 40% | | | 48% | | | 56% | | | 64% | | | 72% | | | 80% | | | 96% | | | 112% | | | 128% | | | 144% | | | 160% | | | 22 | % | | | 0% | | | 35% | | | 42% | | | 49% | | | 56% | | | 63% | | | 70% | | | 84% | | | 98% | | | 112% | | | 126% | | | 140% | | | 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% | |
| | | | | Adjusted EBITDA Growth | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Thresh. | | | | | | | | | | | | | | | Target | | | | | | | | | | | | | | Max. | | | | | | | | <0.5% | | | 0.5% | | | 1.5% | | | 2.5% | | | 3.5% | | | 4.5% | | | 5.5% | | | 6.5% | | | 7.5% | | | 8.5% | | | 9.5% | | | 10.5% | | | Max. | 31 | % | | | 0% | | | 88% | | | 105% | | | 123% | | | 140% | | | 158% | | | 175% | | | 200% | | | 200% | | | 200% | | | 200% | | | 200% | | | | 33 | % | | | 0% | | | 78% | | | 94% | | | 109% | | | 125% | | | 141% | | | 156% | | | 195% | | | 200% | | | 200% | | | 200% | | | 200% | | | | 35 | % | | | 0% | | | 69% | | | 83% | | | 96% | | | 110% | | | 124% | | | 138% | | | 172% | | | 200% | | | 200% | | | 200% | | | 200% | | Adjusted Capital | | 37 | % | | | 0% | | | 59% | | | 71% | | | 83% | | | 95% | | | 107% | | | 119% | | | 148% | | | 178% | | | 200% | | | 200% | | | 200% | | Expenditures | Target | 39 | % | | | 0% | | | 50% | | | 60% | | | 70% | | | 80% | | | 90% | | | 100% | | | 125% | | | 150% | | | 175% | | | 200% | | | 200% | | as a | | 41 | % | | | 0% | | | 45% | | | 54% | | | 63% | | | 72% | | | 81% | | | 90% | | | 113% | | | 135% | | | 158% | | | 180% | | | 200% | | % of Adjusted | | 43 | % | | | 0% | | | 40% | | | 48% | | | 56% | | | 64% | | | 72% | | | 80% | | | 100% | | | 120% | | | 140% | | | 160% | | | 180% | | EBITDA | | 45 | % | | | 0% | | | 35% | | | 42% | | | 49% | | | 56% | | | 63% | | | 70% | | | 88% | | | 105% | | | 123% | | | 140% | | | 158% | | | | 47 | % | | | 0% | | | 30% | | | 36% | | | 42% | | | 48% | | | 54% | | | 60% | | | 75% | | | 90% | | | 105% | | | 120% | | | 135% | | | Thresh. | 49 | % | | | 0% | | | 25% | | | 30% | | | 35% | | | 40% | | | 45% | | | 50% | | | 63% | | | 75% | | | 87% | | | 100% | | | 113% | |
34 | = Range including actual 2019 performance factor. | Cable One, Inc. ▪ 2022 Proxy Statement |
28 | Cable One, Inc. ▪ 2020 Proxy Statement
On March 6, 2020,4, 2022, the CompensationC&TM Committee certified the results of the performance goals and approved a performance factor of 144.1%200% for the 20192021 Bonus Plan based on Adjusted EBITDA growth of 6.8%13.8% and adjusted capital expenditures as a percentage of total revenuesAdjusted EBITDA of 18.2%34.6%. The CompensationC&TM Committee applied the following pre-established adjustments described above toin calculating the performance results under the 20192021 Bonus Plan: Adjusted EBITDA Growth (in millions) | | | Adjusted Capital Expenditures (“Capex”) as a % of Total Revenues (in millions) | | 2019 Publicly Reported Adjusted EBITDA (1) | | $ | 569.0 | | | 2019 Publicly Reported Capex (1) | | $ | 262.4 | | 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 | ) | 2019 Adjusted EBITDA, as Adjusted | | $ | 535.5 | | | 2019 Capex, as Adjusted | | $ | 202.1 | | | | | | | | | | | | | 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 | % |
Adjusted EBITDA Growth (in millions) | | | Adjusted Capital Expenditures (“Capex”) as a % of 2021 Adjusted EBITDA (in millions) | | 2021 Publicly Reported Adjusted EBITDA (1) | | $ | 839.3 | | | 2021 Publicly Reported Capex (1) | | $ | 391.9 | | Adjustment for EBITDA Related to Acquired Operations and Designated Fiber Expansion Projects | | $ | (90.4 | ) | | Adjustment for Capex Related to Acquired Operations, Designated Fiber Expansion Projects and Incremental Upgrades | | $ | (133.0 | ) | 2021 Adjusted EBITDA, as Adjusted | | $ | 749.0 | | | 2021 Capex, as Adjusted | | $ | 258.9 | | | | | | | | | | | | | 2020 Publicly Reported Adjusted EBITDA (2) | | $ | 674.1 | | | 2021 Adjusted EBITDA, as Adjusted | | $ | 749.0 | | Adjustment for EBITDA Related to Acquired Operations, Divestitures and Designated Fiber Expansion Projects | | $ | (16.0 | ) | | | | | | | 2020 Adjusted EBITDA, as Adjusted | | $ | 658.1 | | | | | | | | Adjusted EBITDA Growth | | | 13.8 | % | | Adjusted Capex as a % of Adjusted EBITDA | | | 34.6 | % |
Note: All totals were calculated using exact values. Minor differences may exist due to rounding. |
(1) | Publicly reported amounts for 20192021 include ClearwaveHargray operations for the period beginning May 3, 2021, the date on which Hargray was acquired. | (2) | Publicly reported amount for 2020 includes Valu-Net operations and Fidelityexcludes Anniston operations for the periods beginning January 8, 2019July 1, 2020 and October 1, 2019,2020, respectively, the dates on which each was acquired.acquired or divested, as applicable. |
The CompensationC&TM Committee approved the following bonus payments under the 20192021 Bonus Plan based on the 20192021 performance results and performance factor for our NEOs:NEOs. Amounts in these columns represent the target and maximum payouts for the NEOs under the 2021 Bonus Plan (the amounts reflected for Ms. Detz and Mr. Koetje were pro-rated based on their respective start dates): 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 | % | | $ | 740,000 | | | | 200 | % | | $ | 1,480,000 | | Michael E. Bowker | | 75% | | $270,000 | | 144.1% | | $389,015 | | | 75 | % | | $ | 296,250 | | | | 200 | % | | $ | 592,500 | | Steven S. Cochran | | 70% | | $227,500 | | 144.1% | | $327,782 | | | 75 | % | | $ | 296,250 | | | | 200 | % | | $ | 592,500 | | Eric M. Lardy | | 50% | | $126,500 | | 144.1% | | $182,261 | | Peter N. Witty | | 50% | | $157,500 | | 144.1% | | $226,926 | | Megan M. Detz | | | | 50 | % | | $ | 83,219 | | | | 200 | % | | $ | 166,438 | | Todd M. Koetje | | | | 50 | % | | $ | 45,959 | | | | 200 | % | | $ | 91,918 | |
Long-Term Annual Equity Incentive The CompensationC&TM 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 CompensationC&TM 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. The mix of 2021 equity grants was more performance-based than typical market practice while also supporting retention. The 2021 long-term equity grants were comprised of approximately 60% PSAs and 40% RSAs for Ms. Laulis and Mr. Bowker and 50% PSAs and 50% RSAs for Mr. Cochran. The 2021 target equity grants values were near the 25th percentile of our peer companies for Ms. Laulis and Mr. Bowker and near the 45th percentile of our peer companies for Mr. Cochran. Equity grants to our NEOs are described in greater detail in the 2019“2021 Grants of Plan-Based Awards” and the “Outstanding Equity Awards at Fiscal Year-End” tables beginning on pages 39 and 40, respectively,included under “Executive Compensation Tables.” Cable One, Inc. ▪ 2022 Proxy Statement | | 35 |
20192021 PSA Grants
For 2019,2021, the CompensationC&TM Committee granted our NEOs PSAs under the 2015 Plan. The PSAs granted in 20192021 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 total revenuesAdjusted EBITDA as bonuses under the 20192021 Bonus Plan because the CompensationC&TM Committee viewed these metrics as key indicators of our performance, as further described in the section entitledunder “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. Cable One, Inc. ▪ 2020 Proxy Statement | 29
Other than Ms. LaulisDetz and Mr. Koetje who were hired during 2021, our NEOs each received a 20192021 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 20192021 are scheduled to cliff-vest on January 3, 2022,2024, generally subject to continued service with the Company through such date. On March 6, 2020,4, 2022, the CompensationC&TM Committee certified the results of the performance goals and approved a performance factor of 144.1%200% for the 20192021 PSA grants based on Adjusted EBITDA growth of 6.8%13.8% and adjusted capital expenditures as a percentage of total revenues2021 Adjusted EBITDA of 18.2%34.6%. The CompensationC&TM Committee applied the pre-established adjustments described in the section entitledunder “Annual Cash Incentive Program” above to the performance results for the 20192021 PSAs. The CompensationC&TM Committee approved the following 20192021 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 | | $ | 1,269,800 | | | | 570 | | | | 1,140 | | | | 200 | % | | | 1,140 | | Michael E. Bowker | | $181,879 | | 224 | | 448 | | 144.1% | | 322 | | $ | 550,247 | | | | 247 | | | | 494 | | | | 200 | % | | | 494 | | Steven S. Cochran | | $164,016 | | 202 | | 404 | | 144.1% | | 291 | | $ | 550,247 | | | | 247 | | | | 494 | | | | 200 | % | | | 494 | | Eric M. Lardy | | $127,478 | | 157 | | 314 | | 144.1% | | 226 | | Peter N. Witty | | $159,144 | | 196 | | 392 | | 144.1% | | 282 | |
(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”). |
(2)(2)
| Earned PSAs are subject to service-based vesting conditions through January 3, 2022.2024. |
20192021 RSA Grants
For 2019,2021, the CompensationC&TM Committee approved RSA grants of 350361 shares to Ms. Laulis, 157 shares to Mr. Bowker and 200247 shares each to Messrs. Bowker,Mr. Cochran, Lardy and 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,$804,208; Mr. Bowker, $349,752; and Messrs. Bowker,Mr. Cochran, Lardy$550,248. In connection with the respective hirings of Ms. Detz and Witty, $162,392. These grants were awardedMr. Koetje, the C&TM Committee approved: (i) an RSA grant of 415 shares to Ms. Detz on July 1, 2021 that is scheduled to vest in orderequal annual installments on the first four anniversaries of the grant date; and (ii) an RSA grant of 393 shares to recognize strong individual performanceMr. Koetje on October 1, 2021 that is scheduled to cliff-vest on the third anniversary of the grant date. The grant date fair value of each RSA grant (computed in accordance with Topic 718) was as follows: Ms. Detz, $789,425; and encourage retention.Mr. Koetje, $725,136. 20192021 SAR Grants
For 2019, the CompensationThe C&TM Committee approved grants of 2,000 SARs to each Ms. LaulisDetz and 1,500 SARs each to Messrs. Bowker, Cochran, Lardy and WittyMr. Koetje in order to recognize strong individual performance, encourage retention and support alignmentconnection with long-term stockholder interests. The 2019their hiring. These SAR awards were granted at fair market value on the date of grant, vest in equal annual installments over four years and have a ten-year term (generally subject to the NEO’sMs. Detz’s and Mr. Koetje’s continued employment with us through the applicable vesting date). The grant date fair value of eachMs. Detz’s and Mr. Koetje’s SAR grantawards (computed in accordance with Topic 718) was as follows: Ms. Laulis, $382,840,were $1,041,460 and Messrs. Bowker, Cochran, Lardy and Witty, $287,132.$997,240, respectively.
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.
36 | | Cable One, Inc. ▪ 2022 Proxy Statement |
30 | Cable One, Inc. ▪ 2020 Proxy Statement
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 “Executive Compensation Tables -Retirement Benefits.” Cable One, Inc. ▪ 2020 Proxy Statement | 31
Perquisites We provide our NEOs with very limited perquisites. In 2019,2021, we paid certain costs in connection withprovided relocation and temporary housing assistance for Ms. Laulis’ spouse’s travelDetz and Mr. Koetje pursuant to and participation in a sales incentive trip and an industry conferencetheir respective offer letters, 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 20192021 Summary Compensation Table on page 37 of this Proxy Statement.under “Executive Compensation Tables.” We did not provide any other perquisites to our NEOs. Severance Benefits Consistent with our policy,past 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.NEOs except as described below. As such, as of December 31, 2021, we do not have anyhad no agreements with any of our NEOs that provide cash payments upon a termination of employment or a change of control of the Company (exceptexcept for the Cable One, Inc. Supplemental Executive Retirement Plan (the “Cable One SERP”) described below under “Executive Compensation Tables -Retirement Benefits.” In February 2021, we entered into an offer letter with Ms. Detz (who was a member of the Hargray management team at the time) in connection with the Hargray acquisition that provided for certain rights to receive cash severance benefits in the event of a termination of employment prior to December 31, 2021. We subsequently entered into a new offer letter with Ms. Detz in connection with her appointment as Senior Vice President, Human Resources, and the severance benefits provided under the initial offer letter have expired. As described below under “Retirement Benefits2022 Compensation Actions – Adoption of the 2022 Senior Executive Severance Pay Plan,” section beginning on page 41effective as of this Proxy Statement).January 1, 2022, we adopted the Cable One, Inc. 2022 Senior Executive Severance Pay Plan which provides for cash severance benefits payable to our senior executives upon the occurrence of certain “double trigger” events. We generally 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.Code to our executive officers. 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 vest only vest upon a qualifying termination of employment that occurs within 18 months following a change of control, as described below in theunder “Executive Compensation Tables -Potential Payments Upon Termination or Change of Control.” section beginning on page 44 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 ($280,000290,000 in 2019)2021). 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 plansthis plan were not permitted after December 31, 2015. Explanation and discussion of thesethis frozen retirement plansplan can be found in the narratives accompanying the “Pension Benefits” and “Nonqualified Deferred Compensation” tables beginning on pages 42 and 43, respectively,included under “Executive Compensation Tables.” Cable One, Inc. ▪ 2022 Proxy Statement | | 37 |
20202022 Compensation Actions
20202022 Base Salaries
As part of the annual review process, effective January 1, 2020,2022, our NEOs received the base salary increases indicated in the table below based on individual and Company performance and tenure with our company, and to address shortfalls compared to competitive market salary levels. Ms. Laulis and Mr. Bowker have not received base salary increases since January 2018, and Messrs. Cochran and Witty have not received base salary increases since they joined the Company in April 2018 and August 2018, respectively. 32 | Cable One, Inc. ▪ 2020 Proxy Statement
Name | | 2022 Base Salary | | | 2021 Base Salary | | | $ Increase | | | % Increase | | Julia M. Laulis | | $ | 769,600 | | | $ | 740,000 | | | $ | 29,600 | | | | 4.0 | % | Michael E. Bowker | | $ | 426,600 | | | $ | 395,000 | | | $ | 31,600 | | | | 8.0 | % | Steven S. Cochran | | $ | 426,600 | | | $ | 395,000 | | | $ | 31,600 | | | | 8.0 | % | Megan M. Detz | | $ | 260,000 | | | $ | 250,000 | (1) | | $ | 10,000 | | | | 4.0 | % | Todd M. Koetje | | $ | 280,500 | | | $ | 275,000 | (1) | | $ | 5,500 | | | | 2.0 | % |
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% |
(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 20202021 base salary excluding the impact of the extra pay period.amounts for Mr. Detz and Mr. Koetje are annualized.
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20202022 Annual Executive Bonus Plan
At the end of 2019,2021, the CompensationC&TM Committee approved the 20202022 Annual Executive Bonus Plan (the “2020“2022 Bonus Plan”). Consistent with the 20192021 Bonus Plan, each of our NEOs was awarded a cash incentive opportunity at the beginning of 20202022 that provides for payouts based on our financial performance compared to goals set immediately prior to the beginning of 2020, with2022. As shown in the table below, each NEO’s 2022 target bonus percentage for each NEO set at the same level as the 2019 target bonus percentages indicated above, except for Mr. Cochran whose target bonus percentage was increased from 70%2021 to 75% of base salary based on individual performance andaddress shortfalls compared to more closely align him with competitive market compensation levels. Bonus payouts under the 20202022 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 2020,2022, each subject to certain pre-established adjustments as provided in the 20202022 Bonus Plan. Name | | 2022 Target Bonus Percentage | | | 2021 Target Bonus Percentage | | | % Change | | Julia M. Laulis | | | 125% | | | | 100% | | | | 25% | | Michael E. Bowker | | | 90% | | | | 75% | | | | 15% | | Steven S. Cochran | | | 90% | | | | 75% | | | | 15% | | Megan M. Detz | | | 65% | | | | 50% | | | | 15% | | Todd M. Koetje | | | 65% | | | | 50% | | | | 15% | |
20202022 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, 2020,2022, the CompensationC&TM Committee approved PSA and RSA grants to the NEOs with target grant date fair values as follows: 20202022 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 | | | Total Target Grant Date Fair Value of PSAs and RSAs (1) | | | % of Total Target Grant Date Fair Value of PSAs | | | % of Total Target Grant Date Fair Value of RSAs | | Julia M. Laulis | | $1,000,025 | | 652 | | $500,012 | | 326 | | $ | 1,904,251 | | | | 1,092 | | | $ | 1,126,508 | | | | 646 | | | $ | 3,030,759 | | | | 63% | | | | 37% | | Michael E. Bowker | | $400,317 | | 261 | | $250,006 | | 163 | | $ | 742,867 | | | | 426 | | | $ | 490,013 | | | | 281 | | | $ | 1,232,880 | | | | 60% | | | | 40% | | Steven S. Cochran | | $400,317 | | 261 | | $250,006 | | 163 | | $ | 880,629 | | | | 505 | | | $ | 594,643 | | | | 341 | | | $ | 1,475,272 | | | | 60% | | | | 40% | | Eric M. Lardy | | $300,621 | | 196 | | $250,006 | | 163 | | Peter N. Witty | | $300,621 | | 196 | | $199,391 | | 130 | | Megan M. Detz | | | $ | 540,584 | | | | 310 | | | $ | 336,557 | | | | 193 | | | $ | 877,141 | | | | 62% | | | | 38% | | Todd M. Koetje | | | $ | 517,915 | | | | 297 | | | $ | 322,607 | | | | 185 | | | $ | 840,522 | | | | 62% | | | | 38% | |
(1) | Amounts in this column represent the grant date fair value of the awards computed in accordance with Topic 718. |
38 | | Cable One, Inc. ▪ 2022 Proxy Statement |
The PSAs are scheduled to cliff-vest on January 3, 20232025 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 revenues2022 Adjusted EBITDA as the bonuses provided for under the 20202022 Bonus Plan described above. The maximum number of PSAs granted remains 200% of target. Adoption of the 2022 Senior Executive Severance Pay Plan Effective as of January 1, 2022, the C&TM Committee approved the adoption of the Cable One, Inc. ▪ 2020 Proxy Statement | 33
a termination of employment that constitutes a “qualifying event” (as defined in the Severance Pay Plan) that occurs during the period commencing three months prior to the date upon which a “change of control” (as defined in the Severance Pay Plan) occurs and ending eighteen months following the date upon which the change of control occurred. Benefits under the Severance Pay Plan are subject to a “double trigger” because both a change of control and an involuntary termination of the participant’s employment must occur in order for the participant to qualify for benefits. The definition of “change of control” under the Severance Pay Plan is substantially the same as the definition of “change of control” included in the 2015 Plan. The Severance Pay Plan does not provide for any excise tax gross-up provisions. Corporate Governance PoliciesIf benefits under the Severance Pay Plan are triggered: (i) our CEO, COO and CFO would be entitled to receive a lump sum cash payment equal to 2.5 times such officer’s base salary and target annual cash incentive bonus; and (ii) our other NEOs would be entitled to receive a lump sum cash payment equal to two times their base salary and target annual cash incentive bonus. Additionally, plan participants would be entitled to receive a pro-rated annual cash incentive bonus payment at target for the year in which their termination occurs and a lump sum cash payment equal to eighteen times the monthly premium required to continue group health care coverage based on monthly COBRA premiums in effect at the time of termination of employment.
Any benefits payable under the Severance Pay Plan are subject to execution of an agreement by the plan participant releasing claims against us. Under the terms of the plan, participants are also obligated to comply with the non-compete, non-solicitation and other restrictive covenants set forth in our Clawback Policy, equity award agreements and any other agreements between the participant and us. Under the terms of the Severance Pay Plan, a participant that violates such covenants would be obligated to repay their plan benefits to us and would forfeit all unpaid benefits under the plan. In general, we have not historically entered into employment agreements with our executive officers or otherwise provided guaranteed cash severance benefits (whether in connection with a change of control or otherwise). We adopted the Severance Pay Plan in order to enhance the overall competitiveness of our executive compensation program and our ability to attract and retain executive talent. Our goal is to more closely align the change of control protections under our executive compensation program with industry peers, many of which provide guaranteed cash severance benefits for their executive officers upon any qualifying termination of employment (whether or not tied to a change of control). In our case, we have limited the potential cash severance benefits under the Severance Pay Plan to only be payable upon “double trigger” events. Corporate Governance Policies Stock Ownership Guidelines The Board hasWe have 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.
Cable One, Inc. ▪ 2022 Proxy Statement | | 39 |
These guidelines, which were approved by the Board and 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 CompensationC&TM 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 CompensationC&TM 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, 2019.2021. 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)from: (i) trading derivative securities, such as puts, calls, options and similar instruments; (2)(ii) entering into hedging or monetization transactions or similar arrangements, such as collars and forward-sale contracts; (3)(iii) engaging in short sale transactions in the Company’sour securities; and (4)(iv) 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. 34 | Cable One, Inc. ▪ 2020 Proxy Statement
Clawback Policy Our Clawback Policy provides for the ability to recoup incentive compensation granted, paid or otherwise provided to our executives and certain other employees. Below is a summary of events that may trigger action under the policy. | ■ | Restatement of Financial Results —– in the event of a restatement within the preceding three completed fiscal years (other than due to a change in or retrospective application of applicable accounting principles, methods, rules or interpretations) where the impact would have lowered the incentive compensation amount. |
| ■ | Legal or Compliance Violations / Violations/Misconduct —– in the event of fraud or dishonesty by an employee; a willful act (or failure to act) in bad faith to the material detriment of the Company; material noncompliance with Company policies and guidelines, including misconduct, or the grossly negligent failure to supervise an employee who engaged in misconduct, that had a significant negative impact on the Company; intentional manipulation or attempted manipulation of any performance metric, financial indicator or other goal for personal gain; violation of applicable restrictive covenants; and violation of the policy or any other recoupment or clawback policy adopted by the Company to the extent necessary to address the requirements of applicable law (including the Dodd-Frank Wall Street Reform and Consumer Protection Act)Act (the “Dodd-Frank Act”)). |
40 | | Cable One, Inc. ▪ 2022 Proxy Statement |
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 cash bonuses, PSAs, RSAs and SARs.
Policy with Respect to Tax Deductibility of Compensation As part of its role, the CompensationC&TM 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 CompensationC&TM 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 CompensationC&TM 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 CompensationC&TM 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 CompensationC&TM Committee oversight. Based on this review, the CompensationC&TM 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. Cable One, Inc. ▪ 2022 Proxy Statement | | 41 |
Cable One, Inc. ▪ 2020 Proxy Statement | 35
Compensation Committee ReportCOMPENSATION AND TALENT MANAGEMENT COMMITTEE REPORT
The Compensation and Talent Management 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 and Talent Management Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the 20192021 Form 10-K. Wallace R. Weitz, Chairman
Brad D. Brian
Kristine E. Miller
Katharine B. Weymouth
| Kristine E. Miller, Chair | | | Brad D. Brian | | | Wallace R. Weitz | | | Katharine B. Weymouth | |
42 | | Cable One, Inc. ▪ 2022 Proxy Statement |
36 | Cable One, Inc. ▪ 2020 Proxy Statement
2019EXECUTIVE COMPENSATION TABLES
2021 Summary Compensation Table The following table shows the compensation paid by the Company during 2019, 20182021, 2020 and 20172019 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, 20192021 based on 20192021 total compensation (except in the casescase of Messrs. Cochran, LardyMs. Detz and Witty,Mr. Koetje who were NEOs in 2019 and 20182021 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 | | | 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 | | 2021 | | $ | 740,000 | | | | — | | | $ | 2,074,008 | | | | — | | | $ | 1,480,000 | | | $ | 3,564 | | | $ | 30,243 | | | $ | 4,327,815 | | Chair of the Board, President and | | 2020 | | $ | 752,885 | | | | — | | | $ | 1,500,037 | | | | — | | | $ | 1,450,000 | | | $ | 3,438 | | | $ | 28,886 | | | $ | 3,731,808 | | Chief Executive Officer | | 2019 | | $ | 575,000 | | | | — | | | $ | 864,737 | | | $ | 382,840 | | | $ | 828,459 | | | $ | 22,205 | | | $ | 31,062 | | | $ | 2,704,303 | | Michael E. Bowker | | 2021 | | $ | 395,000 | | | | — | | | $ | 899,999 | | | | — | | | $ | 592,500 | | | | — | | | $ | 21,274 | | | $ | 1,908,773 | | Chief Operating Officer | | 2020 | | $ | 399,808 | | | | — | | | $ | 650,323 | | | | — | | | $ | 577,500 | | | | — | | | $ | 19,073 | | | $ | 1,646,704 | | | | 2019 | | $ | 360,000 | | | | — | | | $ | 344,271 | | | $ | 287,132 | | | $ | 389,015 | | | | — | | | $ | 29,040 | | | $ | 1,409,458 | | Steven S. Cochran | | 2021 | | $ | 395,000 | | | | — | | | $ | 1,100,495 | | | | — | | | $ | 592,500 | | | | — | | | $ | 21,183 | | | $ | 2,109,178 | | Senior Vice President and Chief Financial Officer | | 2020 | | $ | 394,615 | | | | — | | | $ | 650,323 | | | | — | | | $ | 570,000 | | | | — | | | $ | 18,122 | | | $ | 1,633,060 | | | | 2019 | | $ | 325,000 | | | | — | | | $ | 326,408 | | | $ | 287,132 | | | $ | 327,782 | | | | — | | | $ | 4,807 | | | $ | 1,271,129 | | Megan M. Detz | | 2021 | | $ | 166,438 | | | | — | | | $ | 789,425 | | | $ | 1,041,460 | | | $ | 166,438 | | | | — | | | $ | 147,156 | | | $ | 2,310,917 | | Senior Vice President, Human Resources | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Todd M. Koetje | | 2021 | | $ | 91,918 | | | | — | | | $ | 725,136 | | | $ | 997,240 | | | $ | 91,918 | | | | — | | | $ | 140,150 | | | $ | 2,046,362 | | Senior Vice President, Business Development & Finance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)(1)
| 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 1415 of the Notes to the Consolidated Financial Statements contained in our 20192021 Form 10-K for a discussion of the assumptions used in the valuation of the awards. |
| Amounts in the “Stock Awards” column represent the grant date fair value of the PSA and RSA awards granted in 20192021 as follows: |
Name | | Stock Awards – Grant Date Fair Value of PSAs | | | Stock Awards – Grant Date Fair Value of RSAs | | | Total | | | 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 | | | $ | 1,269,800 | | | $ | 804,208 | | | $ | 2,074,008 | | Michael E. Bowker | | $ | 181,879 | | | $ | 162,392 | | | $ | 344,271 | | | $ | 550,247 | | | $ | 349,752 | | | $ | 899,999 | | Steven S. Cochran | | $ | 164,016 | | | $ | 162,392 | | | $ | 326,408 | | | $ | 550,247 | | | $ | 550,248 | | | $ | 1,100,495 | | Eric M. Lardy | | $ | 127,478 | | | $ | 162,392 | | | $ | 289,870 | | | Peter N. Witty | | $ | 159,144 | | | $ | 162,392 | | | $ | 321,536 | | | Megan M. Detz | | | | — | | | $ | 789,425 | | | $ | 789,425 | | Todd M. Koetje | | | | — | | | $ | 725,136 | | | $ | 725,136 | |
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Cable One, Inc. ▪ 2020 Proxy Statement | 37
Set forth below is the maximum value for the PSAs granted to our NEOs during 2021 (i.e., 200% of the target award value) calculated using exact values. Minor differences may exist due to rounding. | Set forth below is the maximum value for the PSAs granted to the NEOs during 2019 (i.e., 200% of the target award value).
|
Name | | Stock Awards – Maximum Value of PSAs | | | Stock Awards – Maximum Value of PSAs | | Julia M. Laulis | | $ | 1,161,103 | | | $ | 2,539,601 | | Michael E. Bowker | | $ | 363,758 | | | $ | 1,100,494 | | Steven S. Cochran | | $ | 328,032 | | | $ | 1,100,494 | | Eric M. Lardy | | $ | 254,955 | | | Peter N. Witty | | $ | 318,288 | | | Megan M. Detz | | | | — | | Todd M. Koetje | | | | — | |
(2)(2)
| Amounts in this column for 2019, 20182021, 2020, and 20172019 represent payments under our bonus plan for each year. The 20192021 Bonus Plan is described in further detail in the section entitledunder “Compensation Discussion and Analysis—Analysis—Elements of Our Compensation Program—Program—Annual Cash Incentive Program” above. |
(3)(3)
| 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 for each year presented were determined usingbased on a discount rate of 3.24% at December 31, 2019, 4.27% at December 31, 2018 and 3.56% at December 31, 2017 and using Pri-2012 fully generational white collar mortality table for males and females using Scale MP-2019 at December 31, 2019, RP-2018 fully generational mortality table for males and females using Scale MP-2018 at December 31, 2018 and RP-2017 fully generational mortality table for males and females using Scale MP-2017 at December 31, 2017.MP-2019.
See the Pension Benefits table and the “Retirement Benefits” section below for additional information regarding these benefits.
|
(4)(4)
| For 2019,2021, the amounts presented consist of the following: |
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 | | | $ | 900 | | | $ | 13,204 | | | $ | 16,139 | | | | — | | | $ | 30,243 | | Michael E. Bowker | | $ | 12,600 | | $ | 13,923 | | $ | 2,517 | | | $ | 29,040 | | | $ | 450 | | | $ | 14,460 | | | $ | 6,364 | | | | — | | | $ | 21,274 | | Steven S. Cochran | | | — | | $ | 4,050 | | $ | 757 | | | $ | 4,807 | | | $ | 450 | | | $ | 14,463 | | | $ | 6,270 | | | | — | | | $ | 21,183 | | Eric M. Lardy | | | — | | $ | 4,328 | | $ | 1,693 | | | $ | 6,021 | | | Peter N. Witty | | | — | | $ | 9,800 | | $ | 731 | | | $ | 10,531 | | | Megan M. Detz | | | $ | 300 | | | $ | 6,856 | | | | — | | | $ | 140,000 | | | $ | 147,156 | | Todd M. Koetje | | | $ | 150 | | | $ | — | | | | — | | | $ | 140,000 | | | $ | 140,150 | |
(4a)(4a)
| Amounts in this column represents (i)represent for Ms. Laulis, (A) travel, activity, entertainment and related expenses incurred by Ms. Laulis’ spouse in connection with attending a sales incentive trip and an industry conference and (B)each of our NEOs, reimbursement to Ms. Laulis for an amount representing part of the cost of ouramounts paid for data, video and voice service, a benefit that we provide at no cost to all of our employees who reside in one of our markets; and (ii) for Mr. Bowker, the cost to attend an executive training course at the Stanford Graduate School of Business.markets. |
(4b)(4b)
| NEOs are immediately 100% vested in 401(k) Company contributions. |
(4c)(4c)
| 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 20192021 Summary Compensation Table. PSAs are credited with cash dividends, which are subject to the same vesting terms as the underlying award. Dividends on PSAs will not vest unless and until the performance and service conditions applicable to the award have been achieved. |
(4d) | The amounts in this column represents the value of one-time relocation and temporary housing allowances provided pursuant to Ms. Detz’s and Mr. Koetje’s offer letters with the Company. |
44 | | Cable One, Inc. ▪ 2022 Proxy Statement |
38 | Cable One, Inc. ▪ 2020 Proxy Statement
20192021 Grants of Plan-Based Awards
The following table shows information with respect to each plan-based award granted to our NEOs during 2019.2021. | | | | | | 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 | | 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 Units | | | 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 ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | or Units (4) (#) | | Options (5) (#) | | Awards ($/Sh) | | Option Awards (6) | | | Grant Date | | | Approval Date (1) | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | | (4) (#) | | | Options (5) (#) | | | Awards ($/Sh) | | | Option Awards (6) | | Julia M. | | — | | — | | — | | $ | 575,000 | | $ | 1,150,000 | | — | | — | | — | | — | | — | | — | | — | | | — | | | — | | | | — | | | $ | 740,000 | | | $ | 1,480,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Laulis | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | 715 | | 1,430 | | — | | — | | — | | $ | 580,551 | | | 01/03/2021 | | | 12/31/2020 | | | | — | | | | — | | | | — | | | | — | | | | 570 | | | | 1,140 | | | | — | | | | — | | | | — | | | $ | 1,269,800 | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | 350 | | — | | — | | $ | 284,186 | | | 01/03/2021 | | | 12/31/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 361 | | | | — | | | | — | | | $ | 804,208 | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | — | | 468 | | $ | 811.96 | | $ | 382,840 | | | Michael E. | | — | | — | | — | | $ | 270,000 | | $ | 540,000 | | — | | — | | — | | — | | — | | — | | — | | | — | | | — | | | | — | | | $ | 296,250 | | | $ | 592,500 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Bowker | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | 224 | | 448 | | — | | — | | — | | $ | 181,879 | | | 01/03/2021 | | | 12/31/2020 | | | | — | | | | — | | | | — | | | | — | | | | 247 | | | | 494 | | | | — | | | | — | | | | — | | | $ | 550,247 | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | 200 | | — | | — | | $ | 162,392 | | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | — | | 352 | | $ | 811.96 | | $ | 287,132 | | | 01/03/2021 | | | 12/31/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 157 | | | | — | | | | — | | | $ | 349,752 | | Steven S. | | — | | — | | — | | $ | 227,500 | | $ | 455,000 | | — | | — | | — | | — | | — | | — | | — | | | — | | | — | | | | — | | | $ | 296,250 | | | $ | 592,500 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Cochran | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | 202 | | 404 | | — | | — | | — | | $ | 164,016 | | | 01/03/2021 | | | 12/31/2020 | | | | — | | | | — | | | | — | | | | — | | | | 247 | | | | 494 | | | | — | | | | — | | | | — | | | $ | 550,247 | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | 200 | | — | | — | | $ | 162,392 | | | 01/03/2021 | | | 12/31/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 247 | | | | — | | | | — | | | $ | 550,248 | | Megan M. | | | — | | | — | | | | — | | | $ | 83,219 | | | $ | 166,438 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Detz | | | 07/01/2021 | | | 03/05/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 415 | | | | — | | | | — | | | $ | 789,425 | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | — | | 352 | | $ | 811.96 | | $ | 287,132 | | | 07/01/2021 | | | 03/05/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 544 | | | $ | 1,902.23 | | | $ | 1,041,460 | | Eric M. | | — | | — | | — | | $ | 126,500 | | $ | 253,000 | | — | | — | | — | | — | | — | | — | | — | | | Lardy | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | 157 | | 314 | | — | | — | | — | | $ | 127,478 | | | Todd M. | | | — | | | — | | | | — | | | $ | 45,959 | | | $ | 91,918 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Koetje | | | 10/01/2021 | | | 05/20/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 393 | | | | — | | | | — | | | $ | 725,136 | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | 200 | | — | | — | | $ | 162,392 | | | 10/01/2021 | | | 05/20/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 540 | | | $ | 1,845.13 | | | $ | 997,240 | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | — | | 352 | | $ | 811.96 | | $ | 287,132 | | | Peter N. | | — | | — | | — | | $ | 157,500 | | $ | 315,000 | | — | | — | | — | | — | | — | | — | | — | | | Witty | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | 196 | | 392 | | — | | — | | — | | $ | 159,144 | | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | 200 | | — | | — | | $ | 162,392 | | | | | 01/03/2019 | | 12/31/2018 | | — | | — | | — | | — | | — | | — | | — | | 352 | | $ | 811.96 | | $ | 287,132 | | |
(1) | The date in this column is the date the CompensationC&TM 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 20192021 Bonus Plan.Plan (including pro-rated amounts for Ms. Detz and Mr. Koetje based on their respective start dates). There is no threshold payout with respect to these awards under the 20192021 Bonus Plan. |
(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 20192021 were earned at 144.1%200% of target, based on the achievement of applicable performance metrics, but remain subject to service-based vesting requirements and are scheduled to cliff-vest on January 3, 2022,2024, generally subject to continued service with the Company through such date. The terms of the PSAs are described in further detail in the section entitledunder “Compensation Discussion and Analysis—Analysis—Elements of Our Compensation Program—Program—Long-Term Annual Equity Incentive” above. |
(4)(4)
| 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 entitledunder “Compensation Discussion and Analysis—Analysis—Elements of Our Compensation Program—Program—Long-Term Annual Equity Incentive” above. |
(5)(5)
| 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 ($191.42)520.73 for Ms. Detz’s awards and $498.62 for Mr. Koetje’s awards) and the grant date closing stock price as reported by the NYSE ($811.96)1,902.23 for Ms. Detz’s awards and $1,845.13 for Mr. Koetje’s awards). The SARs vest in four equal ratable installments beginning on the first anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date) and are otherwise subject to the terms and conditions of the applicable award agreement, a form of which was approved by the CompensationC&TM Committee. |
(6)(6)
| Amounts in this column represent the grant date fair value of PSA, RSA and SAR awards computed in accordance with Topic 718. The amounts included for the PSAs granted to each NEO are based on achievement of the underlying performance conditions at target (i.e., 100% of the target award value), which was determined to be the probable outcome at the time of grant. See Note 1415 of the Notes to the Consolidated Financial Statements contained in the 20192021 Form 10-K for a discussion of the assumptions used in the valuation of the SAR awards. |
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Cable One, Inc. ▪ 2020 Proxy Statement | 39
Consistent with our policy, we have not entered into any employment agreements with, or guaranteed severance packages to, any of our NEOs.
Outstanding Equity Awards at Fiscal Year-End The following table shows the number of shares underlying exercisable and unexercisable SARs and unvested PSAs and RSAs held by our NEOs on December 31, 2019.2021. | | | | SAR Awards | | Stock Awards | Name | | Grant Date (1) | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | SAR Exercise Price ($) | | | 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 | | | 1,296 | | | | — | | | $ | 619.66 | | | 01/03/2027 | | | | — | | | | — | | | | 01/03/2018 | | | 897 | | | | 299 | | | $ | 707.17 | | | 01/03/2028 | | | | 125 | | | $ | 220,431 | | | | 01/03/2019 | | | 538 | | | | 538 | | | $ | 811.96 | | | 01/03/2029 | | | | 1,204 | | | $ | 2,123,194 | | | | 01/03/2020 | | | — | | | | — | | | | — | | | | — | | | | 1,548 | | | $ | 2,729,820 | | | | 01/03/2021 | | | — | | | | — | | | | — | | | | — | | | | 1,501 | | | $ | 2,646,940 | | Michael E. Bowker | | 01/03/2017 | | | 324 | | | | — | | | $ | 619.66 | | | 01/03/2027 | | | | — | | | | — | | | | 01/03/2018 | | | 299 | | | | 299 | | | $ | 707.17 | | | 01/03/2028 | | | | — | | | | — | | | | 01/03/2019 | | | 404 | | | | 404 | | | $ | 811.96 | | | 01/03/2029 | | | | 422 | | | $ | 744,177 | | | | 01/03/2020 | | | — | | | | — | | | | — | | | | — | | | | 644 | | | $ | 1,135,661 | | | | 01/03/2021 | | | — | | | | — | | | | — | | | | — | | | | 651 | | | $ | 1,148,007 | | Steven S. Cochran | | 10/01/2018 | | | 506 | | | | 253 | | | $ | 871.07 | | | 10/01/2028 | | | | — | | | | — | | | | 01/03/2019 | | | 404 | | | | 404 | | | $ | 811.96 | | | 01/03/2029 | | | | 391 | | | $ | 689,510 | | | | 01/03/2020 | | | — | | | | — | | | | — | | | | — | | | | 644 | | | $ | 1,135,661 | | | | 01/03/2021 | | | — | | | | — | | | | — | | | | — | | | | 741 | | | $ | 1,306,716 | | Megan M. Detz | | 07/01/2021 | | | — | | | | — | | | $ | 1,902.23 | | | 07/01/2031 | | | | 415 | | | $ | 731,832 | | Todd M. Koetje | | 10/01/2021 | | | — | | | | — | | | $ | 1,845.13 | | | 10/01/2031 | | | | 393 | | | $ | 693,036 | |
(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, 2019:2021: |
Award Type | | Grant Date | | Remaining Vesting Date(s) | SAR | | January 3, 2017
| | January 3, 2020 and 2021
| | SAR
| | January 3, 2018 | | January 3, 2020, 2021 and 2022 | | SAR | | April 2, 2018 | | April 2, 2020, 2021 and 2022 | | SAR | | October 1, 2018 | | October 1, 2020, 2021 and 2022 | | SAR | | January 3, 2019 | | January 3, 2020, 2021, 2022 and 2023 | | PSASAR
| | January 3, 2017
| | January 3,April 1, 2020
| | April 1, 2022, 2023 and 2024 | PSASAR
| | January 3, 2018
| | January 3,July 1, 2021
| | July 1, 2022, 2023, 2024 and 2025 | SAR | | October 1, 2021 | | October 1, 2022, 2023, 2024 and 2025 | PSA | | January 3, 2019 | | January 3, 2022 | PSA | | January 3, 2020 | | January 3, 2023 | PSA | | January 3, 2021 | | January 3, 2024 | RSA | | January 3, 2018 | | January 3, 2020, 2021 and 2022 | | RSA
| | April 2, 2018
| | January 3, 2021
| | RSA
| | October 1, 2018
| | January 3, 2021 (1a)
| | RSA
| | October 1, 2018
| | October 1, 2021 (1a)
| | RSA | | January 3, 2019 | | January 3, 2020, 2021, 2022 and 2023 | RSA | | January 3, 2020 | | January 3, 2022, 2023 and 2024 |
(1a)RSA
| | For Mr. Cochran 1,065 RSAs are scheduled to cliff-vest on April 1, 2020
| | April 1, 2022, 2023 and 2024 | RSA | | January 3, 2021 | | January 3, 2022, 2023, 2024 and 54 RSAs are scheduled to cliff-vest on 2025 | RSA | | July 1, 2021 | | July 1, 2024 | RSA | | October 1, 2021. For Mr. Witty, 90 RSAs are scheduled to cliff-vest on 2021 | | October 1, 2021.2024 |
40 | Cable One, Inc. ▪ 2020 Proxy Statement
(2) | The PSAs granted in 2017, 20182019, 2020 and 20192021 were subject to performance-based vesting conditions based on the achievement of certain performance goals selected from those specified in the 2015 Plan and were earned at 138.6%144.1%, 144.8%200.0% and 144.1%200.0% of target, respectively, based on the achievement of applicable performance metrics, but remained subject to service-based vesting requirements as of December 31, 2019.2021. The RSAs granted in 2017, 20182019, 2020 and 20192021 are also subject to service-based vesting requirements. The PSAs and RSAs are described in further detail in the section entitled under ““Compensation Discussion and Analysis—Analysis—Elements of Our Compensation Program—Program—Long-Term Annual Equity Incentive”Incentive” above. |
(3) | Calculated using the closing price of a share of our common stock as reported by the NYSE as of December 31, 2019,2021, the last trading day of 20192021 ($1,488.47)1,763.45). |
46 | | Cable One, Inc. ▪ 2022 Proxy Statement |
2019
2021 SAR Exercises and Stock Vested The following table shows a summary of SAR exercises and the vesting of PSAs and RSAs with respect to our NEOs in 2019.2021. | | | SAR Awards | | | Stock Awards | | Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) (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 | | | | 2,025 | | | $ | 3,887,205 | | | | 1,469 | | | $ | 3,272,520 | | Michael E. Bowker | | | — | | | | — | | | | 634 | | | $ | 529,060 | | | | — | | | | — | | | | 458 | | | $ | 1,020,296 | | Steven S. Cochran | | | 208 | | | $ | 310,250 | | | | — | | | | — | | | | — | | | | — | | | | 1,210 | | | $ | 2,674,882 | | Eric M. Lardy | | | — | | | | — | | | | 442 | | | $ | 367,714 | | | Peter N. Witty | | | 205 | | | $ | 234,185 | | | | — | | | | — | | | Megan M. Detz | | | | — | | | | — | | | | — | | | | — | | Todd M. Koetje | | | | — | | | | — | | | | — | | | | — | |
(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”) from Graham Holdings Company (“GHC”), 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. Cable One, Inc. ▪ 2022 Proxy Statement | | 47 |
Cable One, Inc. ▪ 2020 Proxy Statement | 41
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 ($280,000290,000 in 2019)2021) or (ii) the benefit limitation applicable to tax-qualified plans ($225,000230,000 per year commencing at age 65 in 2019)2021). The GHC DB SERP provided, and the Cable One DB SERP provides, benefits only to the extent that the benefit described above exceeds the benefit in the GHC Retirement Plan. Benefits under the Cable One DB SERP are paid at retirement or age 55, if later, and are payable either in the form of a life annuity or an actuarially equivalent optional form of benefit in the GHC Retirement Plan, provided that any benefits otherwise payable before the first day of the seventh month following retirement will be withheld until such date. Pension Benefits The following table shows years of credited service and the present value of accumulated benefits for the participating NEO under the Cable One SERP, computed as of December 31, 2019,2021, which is the same pension plan measurement date used for financial statement reporting purposes with respect to our audited financial statements for the year ended December 31, 2019.2021. Except for Ms. Laulis, none of our other NEOs participate in any pension plans sponsored or maintained by Cable One. Name | | Plan Name | | Number of Years of Credited Service (#) (1) | | Present Value of Accumulated Benefit ($) (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 | | | $ | 107,179 | | | | — | | | | |
(1) | Data in this column represents the number of years of credited service earned as of December 31, 2019.2021. | (2) | Amounts in this column represent the actuarial present value of the accumulated benefits under the plan as of December 31, 2019.2021. The benefits valued include CBRP amounts. The assumptions used in determining the present value of accumulated benefits are the Pri-2012 fully generational white-collar mortality table for males and females using Scale MP-2019 and a 3.24% discount rate. The benefits valued reflect service and earnings through the accrual freeze date of June 30, 2015 and are valued at age 65. There can be no assurance that the amounts listed in this column will ever be fully paid out. |
Defined Contribution Plans The CompensationC&TM 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 ($280,000290,000 in 2019)2021). Participants are eligible to receive Company matching contributions after one year of service, and participants are immediately vested in the Company matching contributions. 48 | | Cable One, Inc. ▪ 2022 Proxy Statement |
42 | Cable One, Inc. ▪ 2020 Proxy Statement
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 ($56,00058,000 in 2019)2021). 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 arrangementsarrangement discussed above for 2019.2021. 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 2021 ($) | | | Registrant Contributions in 2021 ($) | | | Aggregate Earnings in 2021 ($) (1) | | | Aggregate Withdrawals / Distributions ($) | | | Aggregate Balance at December 31, 2021 ($) | | Julia M. Laulis | | Cable One DC SERP | | | — | | | — | | $ | 9,885 | | | — | | | $ | 54,065 | | Cable One DC SERP | | | — | | | | — | | | $ | 7,952 | | | | — | | | $ | 69,258 | | | | Cable One Deferred Compensation Plan | | | — | | | — | | $ | 1,628 | | $ | (9,041) | | | $ | 10,407 | |
(1) | AmountsAmount in this column representrepresents a net investment gainsgain based on Ms. Laulis’ investment elections. These gains areThis gain is not included in the 20192021 Summary Compensation Table because the gains reflectgain reflects market performance of investment indexes selected by Ms. Laulis.
|
Cable One, Inc. ▪ 2020 Proxy Statement | 43
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, 2019.2021. Termination of Employment
In the event the employment of each of our NEOsany NEO 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 CompensationC&TM 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. Cable One, Inc. ▪ 2022 Proxy Statement | | 49 |
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, 2019,2021, no equity awards granted in 20192021 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, 2019.2021. 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, 20192021 of $1,488.47.$1,763.45. 44 | Cable One, Inc. ▪ 2020 Proxy Statement
Name | | Benefit | | Termination Without Cause or for Good Reason (1)(3) | | | Death or Disability (1)(3) | | | Termination Without Cause or for Good Reason on or Following a Change of Control (2)(3) | | Julia M. Laulis | | Accelerated Equity Vesting | | $ | 2,890,844 | | | $ | 2,890,844 | | | $ | 7,280,470 | | Michael E. Bowker | | Accelerated Equity Vesting | | $ | 1,532,657 | | | $ | 1,532,657 | | | $ | 3,605,754 | | Steven S. Cochran | | Accelerated Equity Vesting | | $ | 1,102,534 | | | $ | 1,102,534 | | | $ | 3,665,540 | | Megan M. Detz | | Accelerated Equity Vesting | | | — | | | | — | | | $ | 734,114 | | Todd M. Koetje | | Accelerated Equity Vesting | | | — | | | | — | | | $ | 694,117 | |
Name | | Benefit | | Termination Without Cause or for Good Reason (1) | | | Death or Disability (1) | | | Termination Without Cause or for Good Reason on or 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 20192021 that would accelerate vesting upon a qualifying termination or in the event of death or disability on December 31, 20192021 for each NEO. SARs, PSAs and RSAs granted in 20192021 would be forfeited upon such qualifying termination because such event would have occurred prior to the first anniversary of grant date. The value of PSAs is reflected at the actual level of achievement of the applicable performance metrics if certified by the CompensationC&TM Committee as of December 31, 2019,2021, or based on the estimated level of achievement as of December 31, 20192021 if not certified by the CompensationC&TM Committee as of December 31, 2019.2021. The PSAs granted in 2017 are reflected at 134.5% of target based on the estimated level of achievement as of December 31, 2019 because the Compensation Committee had not yet certified the actual level of achievement. The PSAs granted in 2018 were earned at 145.6%144.1% of target, but were subject to service-based vesting requirements as of December 31, 2019.2021, and the PSAs granted in 2020 were earned at 200.0% of target, but were subject to service-based vesting requirements as of December 31, 2021. |
50 | | Cable One, Inc. ▪ 2022 Proxy Statement |
(2)(2)
| 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, 2019.2021. The value of the PSAs granted in 2017, 20182019, 2020 and 20192021 are reflected at the actual level of achievement of the applicable performance metrics. |
(3) | The amounts in this table exclude any payments for Ms. Laulis under the Cable One SERP and Cable One DC SERP which are described above under “Retirement Benefits” and the related Pension Benefits and Nonqualified Deferred Compensation tables. |
As discussed above in “Compensation Discussion and Analysis—Elements of Our Compensation Program—2022 Compensation Actions”, effective January 1, 2022 the C&TM Committee approved the adoption of the Severance Pay Plan. Amounts that would be payable under the Severance Pay Plan are not included in the table above as the Severance Pay Plan was not effective as of December 31, 2021. Assuming the Severance Pay Plan was effective on December 31, 2021, Ms. Laulis, Mr. Bowker, Mr. Cochran, Ms. Detz and Mr. Koetje would have received additional payments of approximately $4.5 million, $2.1 million, $2.1 million, $0.9 million, and $1.0 million, respectively, for a qualifying event assuming a change of control and qualifying termination took place on that date. 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 under ““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).
Cable One, Inc. ▪ 2020 Proxy Statement | 45
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, 2021 as the date upon which we would determine our employee population used to identify our median employee. As of December 31, 2021, we had approximately 3,500 active full-time, part-time, temporary and seasonal employees (excluding Ms. Laulis and approximately 80 employees from our acquisition of CableAmerica, which closed on December 30, 2021). 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 Hargray) included in the employee population described above, for the 12-month period that ended on December 31, 2021. 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 included in the employee population described above that were hired in 2021 but did not work the full year, we annualized their compensation for the full year. In determining the 12-month total cash compensation for employees from our acquisition of Hargray, we took into account compensation paid in 2021 prior to the closing of the acquisition on May 3, 2021. 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 20192021 annual total compensation for our CEO, as reported in the 20192021 Summary Compensation Table, was $2,704,303.$4,327,815. The 20192021 annual total compensation for our median employee was $49,978.$62,778. The ratio of our CEO’s annual total compensation to our median employee’s total compensation for 20192021 was 5469 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. Cable One, Inc. ▪ 2022 Proxy Statement | | 51 |
46 | Cable One, Inc. ▪ 2020 Proxy Statement
PROPOSALPROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION FOR 20192021
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 CompensationC&TM 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 20192021 Annual Meeting of Stockholders, more thannearly 98% 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 haswe have 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” section 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 2019.2021. The 20192021 Summary Compensation Table and other related compensation tables and narrative included in the "Executive Compensation Tables" section of this Proxy Statement provide detailed information on the compensation of our NEOs. The CompensationC&TM 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 ofpaid to our NEOs as disclosed in the Compensation Discussion and Analysis, the 20192021 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 OFPAID TO OUR NEOs FOR 2019.AS DISCLOSED IN THIS PROXY STATEMENT. 52 | | Cable One, Inc. ▪ 2022 Proxy Statement |
Cable One, Inc. ▪ 2020 Proxy Statement | 47
PROPOSALPROPOSAL 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 VVII, Section 2 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-thirdthe affirmative vote of the total numberholders of directors constituting66 2/3% of the entire Board. The memberscombined voting power of each class are electedthe then outstanding shares of all classes and series of capital stock of the Company shall be required for stockholders to hold office untiladopt, amend, alter or repeal any provision of the third annual meetingBy-laws 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.Company (the “Supermajority Vote Requirement”). 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 thatAfter taking into consideration the feedback provided to us by stockholders following our corporate governance practices and policies should reflect our philosophy of managing for the long termoutreach efforts relating to the extent practicable. Sincevoting results of the spin-off, we have a demonstrated recordCompany’s 2021 Annual Meeting of exceptional financialStockholders, 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 viewpointsvarious provisions of certain institutional investors and other constituents,the Company’s existing Charter, 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 declassifyamend the Board beginning withSupermajority Vote Requirement included in the 2021 Annual Meeting of Stockholders. This change would provide forCompany’s Charter in order to reduce the annual election of all directors phased-in overrequired stockholder vote from a three-year period. Directors who have been elected to three-year terms prior to the effectiveness66 2⁄3% of the New Charter, includingcombined voting power standard to a majority of 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.combined voting power standard.
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 Meetingannual 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,If the New Charter ifis 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 of Directors will remain classified and any director orimplement a similar amendment to the entire Board would continue to only be able to be removed by our stockholders for cause.Company’s By-Laws following the Annual Meeting.
48 | Cable One, Inc. ▪ 2020 Proxy Statement
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.underlined. 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”“FOR” THE APPROVALOF ANTHE AMENDMENT TO OUR CHARTER TO DECLASSIFYAMEND THE BOARDSUPERMAJORITY VOTE REQUIREMENT TO REDUCE THE REQUIRED STOCKHOLDER VOTE FROM A 66 2/3% OF THE COMBINED VOTING POWER STANDARD TO A MAJORITY OF THE COMBINED VOTING POWER STANDARD AS SET FORTH IN ANNEX B TO THIS PROXY STATEMENT.STATEMENT. Cable One, Inc. ▪ 2022 Proxy Statement | | 53 |
PROPOSAL 5:APPROVAL OF THE CABLE ONE, INC. 2022 OMNIBUS INCENTIVE COMPENSATION PLAN ProposalSummary Effective March 28, 2022, the Board approved, subject to the approval of our stockholders, the Cable One, Inc. 2022 Omnibus Incentive Compensation Plan (the “2022 Omnibus Plan”). The 2022 Omnibus Plan is intended to replace the Amended and Restated Cable One, Inc. 2015 Omnibus Incentive Compensation Plan (the “2015 Plan”). The 2015 Plan will be automatically replaced and superseded by the 2022 Omnibus Plan on the date on which the 2022 Omnibus Plan is approved by our stockholders, provided that any outstanding awards granted under the 2015 Plan will remain in effect pursuant to their terms. If stockholder approval is not received, the 2015 Plan will remain in place pursuant to its current terms. If the 2022 Omnibus Plan is approved, as of its effective date, a total of 482,314 shares (comprised of the 82,314 shares that remained available for future awards under the 2015 Plan as of December 31, 2021, plus the newly requested 400,000 shares), less any shares subject to awards granted under the 2015 Plan between December 31, 2021 and the effective date of the 2022 Omnibus Plan, will be available for future awards under the 2022 Omnibus Plan. No awards will be granted under the 2015 Plan or any other prior plan on or after the effective date of the 2022 Omnibus Plan. We anticipate that this increase in shares will allow the 2022 Omnibus Plan to operate for several years, although this could change based on other factors, including but not limited to merger and acquisition activity. We believe that equity-based awards are an important part of our overall compensation program and want to ensure that there is a sufficient number of shares available to adequately incentivize our officers, employees, directors and consultants. As of December 31, 2021, we had 45,740 stock appreciation rights (“SARs”) (with weighted-average exercise price of $1,075.34 and weighted-average remaining contractual life of 7.1 years) outstanding under the 2015 Plan, 27,144 shares of restricted stock (including both time-based and performance-based restricted shares) outstanding under the 2015 Plan and 6,882 restricted stock units (“RSUs”) (including deferred stock units (“DSUs”)) outstanding under the 2015 Plan. We did not have any other equity awards outstanding under the 2015 Plan or any other equity plan as of that date. As of December 31, 2021, only 82,314 shares remained available for future grants under the 2015 Plan (our only active equity plan), and based on our estimates, the Company anticipates exhausting such shares within less than three years. The table below presents our potential fully diluted overhang levels as of December 31, 2021 before and after effectiveness of the 2022 Omnibus Plan: (A) Equity awards outstanding as of December 31, 2021 | | | 79,766 | | (B) Shares available for grant under the 2015 Plan | | | 82,314 | | (C) Additional requested shares for 2022 Omnibus Plan | | | 400,000 | | (D) Common shares outstanding | | | 6,046,362 | | Fully Diluted Overhang prior to effectiveness of 2022 Omnibus Plan (A + B) / (A + B + D) | | | 2.6 | % | Fully Diluted Overhang after effectiveness of 2022 Omnibus Plan (A + B + C) / (A + B + C+ D) | | | 8.5 | % |
If the 2022 Omnibus Plan is not approved, the shares available for grant under the 2015 Plan could be exhausted within the next two years, which would have a detrimental effect on our ability to attract, retain and motivate our employees, officers, directors and consultants. The Board believes the potential dilution from equity issuances to be made under the 2022 Omnibus Plan is reasonable and that approval of the 2022 Omnibus Plan is important in that it allows us to continue awarding equity incentives, which are an important component of our overall compensation program. Our burn rate for the last three years (the “Burn Rate”), which we define as the total number of shares subject to awards granted in a calendar year (which includes the total number of SARs granted, as applicable) expressed as a percentage of our basic weighted average shares outstanding, was 0.30% for 2021, 0.35% for 2020, and 0.75% for 2019, and the average Burn Rate over the last three years was 0.46%. The closing price of our common stock, as reported on the NYSE on April 4, 2022, was $1,496.75 per share. If the 2022 Omnibus Plan is approved by our stockholders, we anticipate filing a Form S-8 registration statement with the SEC shortly after the Annual Meeting to register the shares authorized for issuance under the 2022 Omnibus Plan. 54 | | Cable One, Inc. ▪ 2022 Proxy Statement |
Cable One, Inc. ▪ 2020 Proxy Statement | 49
DIRECTORPlan Summary
Purpose. The purpose of the 2022 Omnibus Plan is to promote the interests of the Company and its stockholders by providing the employees, directors and consultants of the Company and its subsidiaries with incentives and rewards to encourage them to continue in the service of the Company and its subsidiaries and with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. Eligible Participants. Any director, officer, employee or consultant (including any prospective director, officer, employee or consultant) of the Company or its affiliates will be eligible to participate in the 2022 Omnibus Plan. As of December 31, 2021, we had 3,628 employees and nine non-employee directors, although we expect that, based on our current employee base, awards will be generally limited to approximately 460 employees and ten non-employee consultants and directors (of whom there are currently nine eligible non-employee directors and one consultant). Effective Date. If approved by the stockholders, the 2022 Omnibus Plan will become effective on the date it is approved by the stockholders and will remain in effect until it is terminated by the Board. Types of Awards. The 2022 Omnibus Plan provides for the grant of options to purchase shares of our common stock, $0.01 par value (“Shares”), including stock options intended to qualify as incentive stock options (“ISOs”) under Section 422 of the Code and nonqualified stock options that are not intended to so qualify (“NQSOs”), SARs, restricted stock awards, RSUs, deferred share units (“DSUs”), cash incentive awards, and other equity-based or equity-related awards (each, an “Award”). Administration. The 2022 Omnibus Plan will be administered by the C&TM Committee of the Board or such other committee as the Board may designate to administer the 2022 Omnibus Plan (the “Committee”). Subject to the terms of the 2022 Omnibus Plan and applicable law, the Committee will have the sole authority to: (i) take actions and make determinations that it deems necessary or desirable for the administration of the 2022 Omnibus Plan, (ii) designate Award recipients, (iii) determine the type of Awards, (iv) determine the number of Shares or dollar value to be covered by Awards, (v) determine the terms and conditions of any Award, (vi) determine the vesting schedules of Awards, (vii) determine the methods by which and to what extent Awards may be settled, exercised, canceled, forfeited or suspended and determine whether Awards may be exercised or settled in cash, Shares, other securities or other Awards, (viii) determine whether, to what extent, and under what circumstances cash or Shares will be deferred, (ix) interpret or reconcile any inconsistency in and correct any defect in the 2022 Omnibus Plan, (x) establish, amend, suspend or waive rules and regulations and appoint agents as the Committee deems appropriate for proper administration of the 2022 Omnibus Plan, (xi) accelerate the vesting or exercisability of, payment for or lapse of restrictions on Awards, and (xii) amend an outstanding Award or grant a replacement Award if the Committee determines the tax consequences of the Award differ from the consequences expected to occur or changes to tax law or regulations permit Awards to be granted that have more favorable tax consequences than initially anticipated. Share Reserve. Subject to adjustment as provided below, the maximum aggregate number of Shares that may be delivered pursuant to Awards granted under the 2022 Omnibus Plan will be 482,314 shares (comprised of the 82,314 shares that remained available for future awards under the 2015 Plan as of December 31, 2021, plus the newly requested 400,000 shares), less any shares subject to awards granted under the 2015 Plan between December 31, 2021 and the effective date of the 2022 Omnibus Plan (the “Share Pool”). No awards will be granted under the 2015 Plan or any other prior plan on or after the effective date of the 2022 Omnibus Plan. Shares granted under the 2022 Omnibus Plan will consist, in whole or in part, of authorized and unissued Shares or of treasury Shares or of Shares purchased on the open market. Solely for purposes of counting the number of shares available for grant under the 2022 Omnibus Plan, the following share counting rules shall apply: | ● | Each Share that is subject to an Award that is denominated in Shares shall reduce the aggregate number of Shares that may be delivered under the 2022 Omnibus Plan by one Share. |
| ● | If, after the effective date (or after December 31, 2021, with respect to awards granted under the 2015 Plan), any Award granted under the 2022 Omnibus Plan or any Prior Plan (as defined in the 2022 Omnibus Plan) (A) is forfeited or otherwise expires, terminates or is canceled or forfeited without the delivery of all Shares subject thereto, or (B) is settled other than wholly by delivery of Shares (including cash settlement), then, in the case of clauses (A) and (B), the number of Shares subject to such Award that were not issued with respect to such Award will not be treated as issued for purposes of reducing the Share Pool (or, with respect to awards granted under the 2015 Plan, shall be added to the Share Pool). |
Cable One, Inc. ▪ 2022 Proxy Statement | | 55 |
| ● | The following Shares shall be added (or added back as applicable) to the Share Pool upon the occurrence of any of the following after the effective date (or after December 31, 2021, with respect to awards granted under the 2015 Plan): (1) Shares tendered or otherwise used or withheld by the Company in payment of the exercise price of an option; (2) Shares tendered or otherwise used or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; (3) Shares subject to a SAR that are not issued in connection with its stock settlement on exercise thereof; and (4) Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options. |
Other Plan Limits. The maximum aggregate number of Shares in the Share Pool that may be issued pursuant to ISOs is 482,314 (the “ISO limit”). Limit for Non-Employee Directors. The aggregate grant date fair value of Awards (including Share-based and cash-based Awards) that may be granted under the 2022 Omnibus Plan to a non-employee director, plus the aggregate amount of all cash payments made to such non-employee director, for service as director during any fiscal year may not exceed $750,000. Changes in Capitalization. In the event of any extraordinary dividend or distribution (whether in cash, Shares, other securities or other property), recapitalization, rights offering, stock split, reverse stock split, other equity restructuring, split-up or spin-off, the Committee will equitably adjust any or all of (i) the number and class of Shares that thereafter may be made the subject of Awards (including the Share Pool and the ISO limit) and (ii) the terms of any outstanding Award, including the exercise price and the number or kind of Shares or other securities of the Company or other property subject to outstanding Awards. In the event the Committee determines that any reorganization, merger, consolidation, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares, including any Change of Control as defined below, the Committee will, in its discretion, be permitted to make the equitable adjustments described above and (i) make cash payments to Award holders in exchange for the cancellation of the Award (including, in the case of options and SARs, the excess of the Fair Market Value over the exercise price) and (ii) cancel and terminate without payment any option or SAR having a per-Share exercise price greater than or equal to the Fair Market Value of the Shares subject to the Award. Description of Awards Stock Options. A stock option is a right to purchase Shares in the future at an exercise price determined by the Committee at the date of grant. Generally, the per-Share exercise price for stock options will not be less than the Fair Market Value on the date of grant (and not less than 110% of such Fair Market Value for ISO grants made to holders of more than 10% of the Company’s voting power). The terms and conditions of stock options (including exercise price and vesting) will be determined by the Committee subject to limits set forth in the 2022 Omnibus Plan and as set forth in the applicable award agreement. All stock options granted under the 2022 Omnibus Plan will be NQSOs unless the applicable award agreement expressly states that the stock option is intended to be an ISO. All terms and conditions of all grants of ISOs will be subject to Section 422 of the Code and the regulations promulgated thereunder. The maximum term for an option is 10 years. The exercise price of a stock option will be permitted to be paid with cash or its equivalent (e.g., check) or, in the sole and plenary discretion of the Committee, (1) by exchanging Shares owned by the participant (which are not the subject of any pledge or other security interest), (2) if there is a public market for the Shares at the time of exercise (subject to any rules that the Committee has established), through delivery of irrevocable instructions to a broker to sell the Shares otherwise deliverable upon the exercise of the stock option and to deliver cash promptly to the Company an amount equal to the aggregate exercise price, (3) by having the Company withhold the number of Shares from the Shares otherwise issuable pursuant to the exercise of the stock option or (4) through any other method (or combination of methods) that the Committee approves, so long as the combined value of all cash and cash equivalents and the Fair Market Value of any Shares tendered to the Company, together with any Shares withheld by the Company as described above, as of the date of the tender, is equal to the aggregate exercise price and the amount of any Federal, state, local or foreign income or employment taxes required to be withheld. SARs. A SAR is an unfunded and unsecured promise to deliver Shares or cash equal to the appreciation of the Fair Market Value of a Share over an exercise price. The per-Share exercise price of a SAR will not be less than the Fair Market Value per Share on the date of grant. Each SAR will be vested and exercisable at such time, in such manner and subject to such terms and conditions as the Committee may, in its discretion, specify in the applicable award agreement or thereafter. Upon exercise of a SAR, the holder will receive the value of the appreciation in the Share subject to the SAR over the exercise price. SARs will be permitted to be settled in cash or Shares or a combination, as determined by the Committee. The maximum term for a SAR is 10 years. 56 | | Cable One, Inc. ▪ 2022 Proxy Statement |
Restricted Stock. A share of restricted stock will be an actual Share granted under the 2022 Omnibus Plan that will be subject to certain transfer restrictions, forfeiture provisions and/or other terms and conditions specified in the 2022 Omnibus Plan and in the applicable award agreement. The terms and conditions of restricted shares will be determined by the Committee and set forth in the applicable award agreement, including the vesting schedule, vesting criteria (including any performance goals), term and methods and form of settlement. Restricted shares will be evidenced in such manner as the Committee may determine. If certificates representing restricted stock are registered in the name of the applicable participant, the certificates will bear an appropriate legend referring to the terms, conditions and restrictions applicable to restricted stock, and the Company will, at its discretion, retain physical possession of the certificates until all applicable restrictions lapse. RSUs. An RSU is an unfunded and unsecured promise to deliver Shares or cash, or a combination, in accordance with the terms of the applicable award agreement. Each RSU will be granted with respect to a specified number of Shares (or a number of Shares determined pursuant to a specified formula) or will have a value equal to the Fair Market Value of a specified number of Shares (or a number of Shares determined pursuant to a specified formula). RSUs will be permitted to be settled in cash, Shares or any combination thereof, upon the lapse of restrictions applicable to such RSUs or in accordance with the applicable award agreement. The terms and conditions of RSUs will be determined by the Committee and set forth in the applicable award agreement, including the vesting schedule, vesting criteria (including any performance goals), term and methods and form of settlement. Performance Units. A performance unit is an Award that has an initial value that will be established by the Committee (or that will be determined by reference to a valuation formula specified by the Committee or the Fair Market Value of Shares) at the time of the grant. When granting a performance unit, the Committee will set performance goals that, depending on the extent to which they are met during a specified performance period, will determine the number and/or value of performance units that will be paid out to a participant. Performance units, when earned, will be permitted to be settled in cash, Shares or any combination thereof that has an aggregate fair market value equal to the value of the earned performance units at the close of the applicable performance period. The form and timing of payout of performance units will be determined by the Committee and set forth in the applicable award agreement. Cash Incentive Awards. A cash incentive award is an Award payable in cash, which, in the sole discretion of the Committee, may be payable upon the attainment of vesting conditions and/or performance goals that will be established by the Committee. Each cash incentive award will have an initial value that will be established by the Committee at the time of grant. After the applicable performance conditions and/or vesting period had ended, the holder of a cash incentive award would be entitled to receive a payout of the amount of the cash incentive award earned by the participant over the specified vesting and/or performance period. Other Stock-Based Awards. An other stock-based award is an equity-based or equity-related compensation Award not previously described above. Outright grants of fully vested Shares and deferred Share units (i.e. promises to deliver Shares) (whether payable in cash, equity or otherwise) will constitute other stock-based awards. The Committee will determine the amounts and terms and conditions of any such Awards, provided that they comply with applicable laws. Dividends and Dividend Equivalent Rights. A dividend equivalent right will entitle the holder to receive cash, Shares or a combination thereof (as set forth in the applicable award agreement), the value of which will be based on the cash dividends paid on Shares that are subject to another Award or on Shares that otherwise had not been issued to the participant. The Committee may provide that the dividend equivalents (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested or accumulated and credited to a bookkeeping account. Any dividends (including payable in connection with Restricted Shares) or dividend equivalents (payable in connection with Awards other than Options or SARs) shall in all events be subject to the same restrictions and risk of forfeiture as the underlying Award and shall not be paid unless and until the underlying Award is vested or earned. Description of Other Plan Terms Change of Control. In the event of a Change of Control (as defined below), unless provisions were made in connection with the Change of Control for assumption of, or substitution for, Awards previously granted: | ● | any options and SARs outstanding as of the date the Change of Control was determined to have occurred would become fully exercisable and vested, as of immediately prior to the Change of Control; |
Cable One, Inc. ▪ 2022 Proxy Statement | | 57 |
| ● | all performance units, cash incentive awards and other awards that vest based on the attainment of performance goals would be paid out as if the date of the Change of Control were the last day of the applicable performance period and “target” performance levels had been attained; and |
| ● | all other outstanding awards would automatically be deemed exercisable or vested and all restrictions and forfeiture provisions related thereto would lapse as of immediately prior to such Change of Control. |
Unless otherwise provided in an award agreement, a “Change of Control” would be defined to mean any of the following events, generally: | ● | during any consecutive 24-month period, a change in the composition of a majority of the Board, as constituted on the first day of such period, that was not supported by a majority of the incumbent Board; |
| ● | consummation of certain mergers, consolidations or statutory share exchanges or similar form of corporate transaction of the Company (or any of its subsidiaries, if voting securities are issuable) or a sale or other disposition of all or substantially all of its assets to an unaffiliated entity, following which the Company’s stockholders hold 50% or less of the combined voting power of the surviving entity; |
| ● | stockholder approval of a complete liquidation or dissolution of the Company; or |
| ● | the acquisition by any individual, entity or group (other than the Company or any subsidiary or affiliate and certain individuals or groups as provided in the 2022 Omnibus Plan) of beneficial ownership of at least 30% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors. |
Amendment and Termination. Our Board may amend, suspend or terminate the 2022 Omnibus Plan, subject to approval of our stockholders if required by the applicable NYSE listing rules or by applicable law. No such amendment, suspension or termination of the 2022 Omnibus Plan that will materially impair the rights of a holder of an outstanding award will be permitted to be taken without the holder’s consent. No amendment will be permitted to increase the total number of shares available for grant under the 2022 Omnibus Plan, increase the total number of shares available for grant as ISOs under the 2022 Omnibus Plan, materially expand the types of awards or individuals eligible to participate in the 2022 Omnibus Plan, reduce the exercise price of an option or SAR, reprice the option or SAR under GAAP or repurchase or cancel an option or SAR at a time when its exercise price is greater than the fair market value of the underlying Shares, without the prior approval of stockholders. Assignability. Except as otherwise specified in an award agreement, Awards granted under the 2022 Omnibus Plan will not be permitted to be assigned, alienated, pledged, attached, sold or otherwise transferred, other than following the death of a participant by will or the laws of descent. 58 | | Cable One, Inc. ▪ 2022 Proxy Statement |
New Plan Benefits The Company has not approved any awards that are conditioned upon stockholder approval of the 2022 Omnibus Incentive Plan. Awards under the 2022 Omnibus Plan will be determined by the C&TM Committee in its discretion. It is, therefore, not possible to predict the awards that will be made to particular officers in the future under the 2022 Omnibus Plan. If the proposed amendments to the 2022 Omnibus Plan had been in effect in fiscal year 2021, we expect that our award grants for fiscal year 2021 would not have been different from those actually made in that year under the 2015 Plan. For information regarding grants made under the 2015 Plan during 2021 to our named executive officers, see the table entitled “2021 Grants of Plan-Based Awards” under “Executive Compensation Tables.” For information regarding grants made under the 2015 Plan during 2021 to our non-employee directors, see the table included under “Director Compensation.” For 2022, we intend to award our non-employee directors an annual grant of RSUs anticipated to be on the date of the Annual Meeting. The number of RSUs to be issued to non-employee directors will be determined by dividing the dollar amount of the award (currently anticipated to be $125,000) by the closing price of a share of our common stock on the NYSE on the date of grant (which is anticipated to be the date of the Annual Meeting). For information regarding compensation to our non-employee directors made to our non-employee directors, please read “Director Compensation.” Cable One, Inc. ▪ 2022 Proxy Statement | | 59 |
The table below sets forth the equity awards that were granted under the 2015 Plan during 2021 to our named executive officers and other persons. Individual or Group Name | | Aggregate Target Grant Date Fair Value of Stock Awards or Stock Unit Awards ($) | | | Number of Target Shares Subject to Stock Awards or Stock Unit Awards Granted | | | Number of SARs Granted | | Named Executive Officers | | | | | | | | | | | | | Julie M. Laulis | | $ | 2,074,008 | | | | 931 | | | | — | | Michael E. Bowker | | $ | 899,999 | | | | 404 | | | | — | | Steven S. Cochran | | $ | 1,100,495 | | | | 494 | | | | — | | Megan M. Detz | | $ | 789,425 | | | | 415 | | | | 2,000 | | Todd M. Koetje | | $ | 725,136 | | | | 393 | | | | 2,000 | | | | | | | | | | | | | | | All Current Executive Officers as a Group (10 people) | | $ | 10,657,462 | | | | 3,997 | | | | 4,000 | | | | | | | | | | | | | | | All Current Non-Employee Directors as a Group (9 people) | | $ | 1,602,195 | | | | 904 | | | | — | | | | | | | | | | | | | | | All Current Employees who received grants during 2021 other than Executive Officers as a Group (approximately 383 persons) | | $ | 10,778,541 | | | | 4,996 | | | | — | |
U.S. Federal Income Tax Consequences The United States federal income tax consequences of the issuance and/or exercise of option awards under the 2022 Omnibus Plan are as follows. The summary is based on the law as in effect on December 31, 2021. The summary does not discuss state or local tax consequences or non-U.S. tax consequences. Incentive Stock Options. An ISO results in no taxable income to the optionee or a deduction to the Company at the time it is granted or exercised for regular federal income tax purposes. However, upon exercise, the excess of the fair market value of the Shares acquired over the option exercise price is an item of adjustment in computing the alternative minimum taxable income of the optionee, if applicable. If the optionee holds the Shares received as a result of an exercise of an ISO for the later of two years from the date of the grant or one year from the date of exercise, then the gain realized on disposition of the Shares is treated as a long-term capital gain. If the Shares are disposed of during this period, however (i.e., a “disqualifying disposition”), then the optionee will include into income, as compensation for the year of the disposition, an amount equal to the excess, if any, of the fair market value of the Shares, upon exercise of the option over the option exercise price (or, if less, the excess of the amount realized upon disposition of the Shares over the option exercise price). Any additional gain or loss recognized upon the disposition will be recognized as a capital gain or loss by the optionee. In the event of a disqualifying disposition, the Company will be entitled to a deduction, in the year of such a disposition, in an amount equal to the amount includible in the optionee’s income as compensation. The optionee’s tax basis in the Shares acquired upon exercise of an ISO is equal to the option price paid, plus any amount includible in his or her income as a result of a disqualifying disposition. Any further gain realized by the optionee will be taxed as short-term or long-term capital gain and will not result in any deduction by the Company. A disqualifying disposition occurring in the same calendar year as the year of exercise would eliminate the alternative minimum tax effect of the ISO exercise. The foregoing summary of tax consequences associated with the exercise of an ISO and the disposition of Shares acquired upon exercise of an ISO assumes that the ISO is exercised during employment or within three months following termination of employment. The exercise of an ISO more than three months following termination of employment will result in the tax consequences described below for NQSOs, except that special rules apply in the case of disability or death. An individual’s stock options otherwise qualifying as ISOs will be treated for tax purposes as NQSOs (and not as ISOs) to the extent that, in the aggregate, they first become exercisable in any calendar year for stock having a fair market value (determined as of the date of grant) in excess of $100,000. 60 | | Cable One, Inc. ▪ 2022 Proxy Statement |
NQSOs. An NQSO results in no taxable income to the optionee or deduction to the Company at the time it is granted. An optionee exercising an NQSO will, at that time, realize taxable compensation in the amount equal to the excess of the then fair market value of the Shares over the option exercise price. Subject to the applicable provisions of the Code, the Company will be entitled to a deduction for federal income tax purposes in the year of exercise in an amount equal to the taxable compensation realized by the optionee. The optionee’s tax basis in Shares received upon exercise is equal to the sum of the option exercise price plus the amount includible in his or her income as compensation upon exercise. Any gain (or loss) upon subsequent disposition of the Shares will be a long or short-term capital gain to the optionee (or loss), depending upon the holding period of the Shares. The foregoing summary assumes that the Shares acquired upon exercise of an NQSO option are not subject to a substantial risk of forfeiture. Stock Appreciation Rights. The grant of a SAR results in no taxable income to the holder or a deduction to the Company at the time of grant. A holder of a SAR will, at the time of exercise, realize taxable compensation in the amount equal to the excess of the then fair market value of the Shares over the option exercise price. The Company will be entitled to a deduction for federal income tax purposes in the year of exercise in an amount equal to the taxable compensation realized by the holder of the SAR. To the extent the SAR is settled in Shares, any additional gain or loss recognized upon any later disposition of the Shares will be capital gain or loss. Restricted Stock Awards. A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the Shares on the date the Shares are no longer subject to a substantial risk of forfeiture (and are freely transferable) unless the participant has elected to make a timely election pursuant to Section 83(b) of the Code, in which case, the participant will recognize ordinary income on the date the Shares were acquired. Upon the sale of Shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value upon which the participant recognized ordinary income, will be taxed as a capital gain or loss. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date. Restricted Stock Units, Performance Units, Cash Incentive Awards or Other Stock-Based Awards. The grant of RSUs, performance units, cash incentive awards or other stock-based awards will result in no taxable income to the participant or deduction to the Company. A participant awarded one of these awards will recognize ordinary income in an amount equal to the fair market value of the cash or Shares delivered to the participant on the settlement date. Where an award is settled in the Shares, any additional gain or loss recognized upon the disposition of such shares or property will be capital gain or loss. Section 409A. Section 409A of the Code imposes restrictions on nonqualified deferred compensation. Failure to satisfy these rules will result in accelerated taxation, an additional tax to the holder of the amount equal to 20% of the deferred amount and a possible interest charge. Stock options granted with an exercise price that is not less than the fair market value of the underlying Shares on the date of grant will not give rise to “deferred compensation” for this purpose unless they involve additional deferral features. Stock options that will be awarded under the 2022 Omnibus Plan are intended to be eligible for this exception. In addition, it is intended that the provisions of the 2022 Omnibus Plan comply with Section 409A of the Code, and all provisions of the 2022 Omnibus Plan will be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under these rules. THE FULL TEXT OFTHE 2022 OMNIBUS PLANIS ATTACHED TO THIS PROXY STATEMENT ASANNEXCAND THE FOREGOING DISCUSSION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH TEXT. THE BOARD RECOMMENDS A VOTE “FOR” THEAPPROVAL OF THECABLE ONE, INC. 2022 OMNIBUS INCENTIVE COMPENSATION PLAN AS SET FORTH INANNEXCTO THIS PROXY STATEMENT. Cable One, Inc. ▪ 2022 Proxy Statement | | 61 |
DIRECTOR 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 | | | C&TM Committee Chair | | | $ | 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. |
EachUnder our current director compensation program, each non-employee director will receive an annual equity award grant in the form of RSU awards under the 2015 Plan or, if the plan is approved by our stockholders, the Cable One, Inc. 2022 Omnibus Incentive Compensation Plan described elsewhere in this Proxy Statement, 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 “Executive Compensation Tables—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 directorLead 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 directorLead 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 CompensationC&TM 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 executive2021 NEO compensation peer group.group under “Compensation Discussion and Analysis—Our Executive Compensation Program and Practices—Use of Peer Companies.” 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 2021, our total annual base compensation value and additional retainer amounts approximatedwas generally in line with 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 2021. 62 | | Cable One, Inc. ▪ 2022 Proxy Statement |
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 $375,000, which each non-employee director is expected to achieve within a five-year compliance period of the later of the date of initial adoption of our stock ownership guidelines, which was August 4, 2015, orcommencing with the date of the non-employee director’s initial election to the Board. Compliance with the stock ownership guideline is reviewed annually, and all of our non-employee directors were in compliance with the stock ownership guidelines as of December 31, 2019.2021. 50 | Cable One, Inc. ▪ 2020 Proxy Statement
Director Compensation The following table shows the compensation paid by the Company during the year ended December 31, 20192021 to our non-employee directors. Name (1) | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) (2), (3) | | | Total ($) | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) (2), (3) | | | Total ($) | | Brad D. Brian | | $ | 37,228 | | | $ | 160,652 | | | $ | 197,880 | | | | — | | | $ | 198,502 | | | $ | 198,502 | | Thomas S. Gayner | | | — | | | $ | 229,015 | | | $ | 229,015 | | | | — | | | $ | 228,632 | | | $ | 228,632 | | Deborah J. Kissire | | $ | 89,348 | | | $ | 124,192 | | | $ | 213,540 | | | $ | 89,442 | | | $ | 124,064 | | | $ | 213,506 | | Mary E. Meduski | | | — | | | $ | 173,598 | | | $ | 173,598 | | | | — | | | $ | 198,502 | | | $ | 198,502 | | Thomas O. Might | | $ | 74,457 | | | $ | 124,192 | | | $ | 198,649 | | | $ | 74,535 | | | $ | 124,064 | | | $ | 198,599 | | Kristine E. Miller | | $ | 22,047 | | | $ | 83,000 | | | $ | 105,047 | | | $ | 28,302 | | | $ | 207,364 | | | $ | 235,666 | | Alan G. Spoon | | $ | 37,228 | | | $ | 160,652 | | | $ | 197,880 | | | Sherrese M. Smith | | | | — | | | $ | 198,502 | | | $ | 198,502 | | Alan G. Spoon (4) | | | $ | 7,075 | | | | — | | | $ | 7,075 | | Wallace R. Weitz | | | — | | | $ | 208,506 | | | $ | 208,506 | | | | — | | | $ | 198,502 | | | $ | 198,502 | | Katharine B. Weymouth | | $ | 74,457 | | | $ | 124,192 | | | $ | 198,649 | | | $ | 74,535 | | | $ | 124,064 | | | $ | 198,599 | |
(1) | Ms. Laulis is not included in this table because she was an employee of the Company in 20192021 and received no additional compensation for her service as a director. The compensation received by Ms. Laulis as an employee is shown in the 20192021 Summary Compensation Table. |
(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 2019,2021, rather than the amounts paid to or realized by our non-employee directors. There can be no assurance that the amounts shown will be realized, and amounts could ultimately exceed these calculated fair values. The RSUs are scheduled to 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 service-based vesting conditions and settlement dates described in the narrative above. Amounts in this column include RSUs issued in lieu of annual cash fees for non-employee directors who elected to defer all or a portion of such annual cash fees (based on a May 20192021 to May 20202022 service year) and are scheduled to vest on the date immediately preceding the date of the Annual Meeting.May 20, 2022. |
(3) | The following table shows the aggregate number of unvested and outstanding RSUs held by each non-employee director at December 31, 2019.2021. |
Name | | Unvested and Outstanding RSUs at December 31, 202131, 2019 | | Brad D. Brian | | 141 112 | | Thomas S. Gayner | | 201 129 | | Deborah J. Kissire | | 109 70 | | Mary E. Meduski | | 147 112 | | Thomas O. Might | | 109 70 | | Kristine E. Miller | | 67 117 | | Alan G. SpoonSherrese M. Smith
| | 141 112 | | Wallace R. Weitz | | 183 112 | | Katharine B. Weymouth | | 70 | |
(4) | 109Mr. Spoon retired from the Board on February 8, 2021.
|
Cable One, Inc. ▪ 2022 Proxy Statement | | 63 |
Cable One, Inc. ▪ 2020 Proxy Statement | 51
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 4, 2022 (except as otherwise indicated) by: | ■ | each executive officer named in the 20192021 Summary Compensation Table; | | | |
| ■ | 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 5,725,131 shares6,011,781 shares outstanding on March 30, 2020.April 4, 2022. The numbers and percentages shown include shares actually owned on March 30, 2020April 4, 2022 and shares, SARs (in the case of executive officersofficers), 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 4, 2022 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 | | Share Ownership | | | Shares Underlying Exercisable SARs (1) | | | RSUs and DSUs (2) | | | Total Beneficial Ownership | | | Percentage Owned | | NEOs and Directors: | | | | | | | | | | | | | | | | | | | | | Julia M. Laulis (3) | | | 12,982 | | | | 2,912 | | | | — | | | | 15,894 | | | | * | | Michael E. Bowker (4) | | | 4,390 | | | | 1,333 | | | | — | | | | 5,723 | | | | * | | Steven S. Cochran (5) | | | 4,143 | | | | 932 | | | | — | | | | 5,075 | | | | * | | Megan M. Detz (6) | | | 1,228 | | | | — | | | | — | | | | 1,228 | | | | * | | Todd M. Koetje (7) | | | 1,172 | | | | — | | | | — | | | | 1,172 | | | | * | | Brad D. Brian | | | 605 | | | | — | | | | 983 | | | | 1,588 | | | | * | | Thomas S. Gayner (8) | | | 5,773 | | | | — | | | | 1,416 | | | | 7,189 | | | | * | | Deborah J. Kissire | | | 100 | | | | — | | | | 1,474 | | | | 1,574 | | | | * | | Mary E. Meduski | | | — | | | | — | | | | 367 | | | | 367 | | | | * | | Thomas O. Might | | | 13,764 | | | | — | | | | 70 | | | | 13,834 | | | | * | | Kristine E. Miller | | | 135 | | | | — | | | | 117 | | | | 252 | | | | * | | Sherrese M. Smith | | | — | | | | — | | | | 195 | | | | 195 | | | | * | | Wallace R. Weitz | | | 500 | | | | — | | | | 1,812 | | | | 2,312 | | | | * | | Katharine B. Weymouth | | | — | | | | — | | | | 448 | | | | 448 | | | | * | | All executive officers and directors as a group, eliminating duplications (19 individuals) | | | 55,572 | | | | 10,468 | | | | 6,882 | | | | 72,922 | | | | 1.2 | % |
64 | | Cable One, Inc. ▪ 2022 Proxy Statement |
52 | Cable One, Inc. ▪ 2020 Proxy Statement
Name | | Beneficial Ownership | | Percentage Owned | | 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% | | T. Rowe Price Associates, Inc. (9) | | | | 867,978 | | | 14.4% | BlackRock, Inc. (10) | | | | 736,160 | | | 12.2% | Daniel L. Mosley (11) | | | | 562,164 | | | 9.4% | The Vanguard Group (12) | | | | 511,716 | | | 8.5% | Donald E. Graham (13) | | | | 479,941 | | | 8.0% | Wellington Management (14) | | | | 436,613 | | | 7.3% |
* Less than 1%. (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 March 30, 2020 ($1,653.50)April 4, 2022 ($1,496.75). |
(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 4,3465,794 shares of restricted stock awarded to Ms. Laulis in accordance with the 2015 Plan and 4,5476,298 shares held in a trust with Ms. Laulis’ spouse, with whom Ms. Laulis shares voting and investment power. |
(4) | The amount includes 1,5242,397 shares of restricted stock awarded to Mr. Bowker in accordance with the 2015 Plan. |
(5) | The amount includes 2,2452,683 shares of restricted stock awarded to Mr. Cochran in accordance with the 2015 Plan. |
(6) | The amount includes 1,2551,228 shares of restricted stock awarded to Mr. LardyMs. Detz in accordance with the 2015 Plan. |
(7) | The amount includes 2,3321,172 shares of restricted stock awarded to Mr. WittyKoetje in accordance with the 2015 Plan. |
(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 14, 2020,2022, T. Rowe Price Associates, Inc. (“T. Rowe”), an investment advisor, was deemed to be the beneficial owner of 833,112867,978 shares of our common stock. Based on the Schedule 13G/A, T. Rowe has sole voting power over 186,538177,531 shares and sole dispositive power over 833,112867,978 shares. The address of T. Rowe is 100 E. Pratt Street, Baltimore, Maryland 21202. The Schedule 13G/A discloses that T. Rowe Price New Horizons Fund beneficially owns an aggregate of 435,520 shares of such common stock over which it has sole voting power. | | | (10) | Based on a Schedule 13G/A filed on January 27, 2022, BlackRock, Inc. (“BlackRock”), a holding company, was deemed to be the beneficial owner of 736,160 shares of our common stock. Based on the Schedule 13G/A, BlackRock has sole voting power over 704,805 shares and sole dispositive power over 736,160 shares. The address of BlackRock is 55 E. 52nd Street, New York, New York 10055. |
(10)(11)
| According to information as of March 12, 2020,18, 2022 and available to the Company, Mr. Mosley, as a trustee of various trusts, has voting and investment power with respect to shares of our common stock as follows: sole voting and investment power, 29,60022,900 shares; and shared voting and investment power, 587,705539,264 shares, which includes 112,01363,678 shares in a trust for which Mr. Mosley is a co-trustee with Mr. Graham and Mr. Graham has the power to amend or revoke. The address of Mr. Mosley is 825 Eighth Avenue, New York, New York 10019. |
(11)
| Based on a Schedule 13D/A filed on December 18, 2019, Mr. Graham, an individual, was deemed to be the beneficial owner of 528,291 shares of our common stock. Based on the Schedule 13D/A, Mr. Graham has sole voting and dispositive power over 130,207 shares, sole investment power over 18,194 shares and shared voting, dispositive and investment power over 398,084 shares. The address of Mr. Graham is 1300 North 17th Street, Arlington, Virginia 22209.
|
(12) | Based on a Schedule 13G/A filed on February 12, 2020,9, 2022, The Vanguard Group (“Vanguard”), an investment advisor, was deemed to be the beneficial owner of 474,715511,716 shares of our common stock. Based on the Schedule 13G/A, Vanguard has sole voting power over 2,8850 shares, shared voting power over 6744,053 shares, sole dispositive power over 471,956504,031 shares and shared dispositive power over 2,7597,685 shares. The address of Vanguard is 100 Vanguard Blvd.,Boulevard, Malvern, Pennsylvania 19355. |
Cable One, Inc. ▪ 2022 Proxy Statement | | 65 |
Cable One, Inc. ▪ 2020 Proxy Statement | 53
(13) | Based onAccording to information as of March 18, 2022 and available to the Company, Mr. Graham, as an individual and as a Schedule 13G/A filed on February 5, 2020, BlackRock, Inc. (“BlackRock”), a holding company, was deemedtrustee of various trusts, has voting and investment power with respect to be the beneficial owner of 441,478 shares of our common stock. Based on the Schedule 13G/A, BlackRock hasstock as follows: sole voting and investment power, over 424,139 shares81,872 shares; and sole dispositiveshared voting and investment power, over 441,478398,069 shares. The address of BlackRockMr. Graham is 55 East 52nd1300 N. 17th Street, New York, New York 10055.Arlington, Virginia 22209.
| | | (14) | Based on a Schedule 13G filed on February 12, 2020, Renaissance Technologies LLC4, 2022, Wellington Management Group LLP (“Renaissance”Wellington Management Group”), a holding company, Wellington Group Holdings LLP (“Wellington Group Holdings”), a holding company, Wellington Investment Advisors Holdings LLP (“Wellington Investment”) and Wellington Management Company LLP (“Wellington Company”) (collectively, “Wellington Management”), an investment advisor, wasadviser, were deemed to be the beneficial ownerowners of 292,900436,613 shares of our common stock. Based on the Schedule 13G, Renaissance13G/A, Wellington Management has soleshared voting power over 285,639 shares, sole dispositive power over 291,400390,287 shares and shared dispositive power over 1,500436,613 shares. The address of RenaissanceWellington Management is 800 Third Avenue, New York, New York 10022.280 Congress Street, Boston, Massachusetts 02210. |
EQUITYEQUITY COMPENSATION PLAN INFORMATION
The following table shows certain information as of December 31, 20192021 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 | | | | 25,503 | | | $ | 1,075.34 | | | | 82,314 | | Equity compensation plans not approved by security holders | | | — | | — | | | — | | | | — | | | | — | | | | — | | Total | | | 56,122 | | $ | 676.41 | | | 169,456 | | | | 25,503 | | | $ | 1,075.34 | | | | 82,314 | |
(1) | Column (a) includes 6,8856,882 shares underlying outstanding RSUs and DSUs and 49,23718,621 shares to be issued upon exercise of outstanding SARs. Because there is no exercise price associated with RSUs, these awards are not included in the weighted-average exercise price calculation presented in column (b). The SARs are exercisable for shares with a value equal to the increase in the fair market value of our common stock over the exercise price. For the purposes of calculating the number of shares to be issued upon exercise of the SARs, we have used the closing price of a share of our common stock as reported by the NYSE as of December 31, 20192021 ($1,488.47)1,763.45). See Note 1415 of the Notes to the Consolidated Financial Statements contained in our 20192021 Form 10-K for additional information about our equity compensation plans, including the 2015 Plan. |
66 | | Cable One, Inc. ▪ 2022 Proxy Statement |
54 | Cable One, Inc. ▪ 2020 Proxy Statement
REPORTREPORT OF THE AUDIT COMMITTEE
One of the standing committees of the Board is the Audit Committee. Currently, there are four 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. SpoonSherrese M. Smith and Katharine B. Weymouth.Wallace R. Weitz. 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 20192021 financial statements with the Company’s management; |
| ■ | discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB Auditing Standard No. 1301, Communications with Audit Committees;and the SEC; and |
| ■ | 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 20192021 financial statements be included in the 20192021 Form 10-K for filing with the SEC. | | Deborah J. Kissire, Chair | | | Mary E. Meduski | | | Sherrese M. Smith | | | Wallace R. Weitz |
Deborah J. Kissire, Chair
Mary E. Meduski
Alan G. Spoon
Katharine B. Weymouth
Cable One, Inc. ▪ 2022 Proxy Statement | | 67 |
Cable One, Inc. ▪ 2020 Proxy Statement | 55
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 his or hertheir duties and responsibilities to the Company; |
| ■ | 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 Ethics 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 CompensationC&TM 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. |
68 | | Cable One, Inc. ▪ 2022 Proxy Statement |
56 | Cable One, Inc. ▪ 2020 Proxy Statement
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 Graham Holdings Company (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.Graham Holdings Company. STOCKHOLDERDELINQUENT SECTION 16(a) FILINGS
Section 16(a) of the Exchange Act requires our directors, executive officers, and holders of more than 10% of our common stock to file with the SEC reports regarding their ownership and changes in ownership of our securities. We believe that, during the year ended December 31, 2021, our directors, executive officers, and 10% stockholders complied with all Section 16(a) filing requirements, except for the initial Form 3 filing (reporting no Cable One holdings) for Todd Koetje which was filed one day late. In making such statement, we have relied upon examination of the copies of Forms 3, 4, and 5 provided to us and the written representations of our directors and executive officers. STOCKHOLDER PROPOSALS, DIRECTOR NOMINATIONS AND OTHER BUSINESS FOR THE 20212023 ANNUAL MEETING OF STOCKHOLDERS Deadline for the Submission of Stockholder Proposals for Inclusion in Our Proxy Statement for Our 20212023 Annual Meeting of Stockholders Pursuant to Exchange Act Rule 14a-8 If any stockholder wishes to submit a proposal to be considered for inclusion in our proxy materials for our 20212023 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, 2020,13, 2022, and addressed to our Secretary at 210 E. Earll Drive, Phoenix, Arizona, 85012. Deadline for Procedures for Stockholder Nominations Pursuant to the Proxy Access Provisions of our Bylaws Under the proxy access provisions set forth in Article II, Section 12 of our By-laws, any stockholder or group of stockholders wishing to include one or more director nominees in our proxy statement must follow the procedures and provide timely notice to the company along with the required information as set for in our By-laws. To be considered timely, such notice must be received not earlier than November 13, 2022 and not later than December 13, 2022. Deadline and Procedures Under Our By-laws for Other Stockholder Nominations and Other Proposals Not Included in Our Proxy Statement for Our 20212023 Annual Meeting of Stockholders Under our By-laws, any stockholder of record wishing to appear at our 20212023 Annual Meeting of Stockholders and submit a proposal or nominate a person for election to our Board other than pursuant to the proxy access procedures described above must submit the proposal or nomination to our Secretary at 210 E. Earll Drive, Phoenix, Arizona, 85012 not earlier than January 15, 202120, 2023 and not later than February 14, 2021.19, 2023. In addition, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than Company nominees must provide notice to the Company that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 21, 2023. 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. Cable One, Inc. ▪ 2022 Proxy Statement | | 69 |
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. 70 | | Cable One, Inc. ▪ 2022 Proxy Statement |
Cable One, Inc. ▪ 2020 Proxy Statement | 57
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 (income) loss, other (income) expense and other unusual operating expenses,items, 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 senior unsecured 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 as the performance goal for the 2017 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. A-1 | | Cable One, Inc. ▪ 2020 2022 Proxy Statement |
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) | | | 2021 | | | 2020 | | Net income | | $ | 178,582 | | | $ | 164,760 | | | $ | 577,370 | | | $ | 291,824 | | | $ | 304,391 | | Plus: Interest expense | | | 71,729 | | | | 60,415 | | | 179,008 | | | | 113,449 | | | | 73,607 | | Income tax provision | | | 55,233 | | | | 47,224 | | | 58,230 | | | | 45,765 | | | | 76,317 | | Depreciation and amortization | | | 216,687 | | | | 197,731 | | | 596,037 | | | | 339,025 | | | | 265,658 | | Equity-based compensation | | | 12,300 | | | | 10,486 | | | 33,529 | | | | 20,054 | | | | 14,592 | | Severance expense | | | 215 | | | 2,347 | | | 8,023 | | | Loss on deferred compensation | | | 400 | | | | 425 | | | 3,578 | | | (Gain) loss on deferred compensation | | | | 174 | | | | 231 | | Acquisition-related costs | | | 9,590 | | | 1,773 | | | 17,305 | | | | 10,770 | | | | 3,873 | | Loss on asset disposals, net | | | 7,187 | | | 14,167 | | | 21,928 | | | (Gain) loss on asset sales and disposals, net | | | | 7,829 | | | | (1,072 | ) | System conversion costs | | | 4,828 | | | 5,037 | | | 9,865 | | | | 4,831 | | | | 1,350 | | Rebranding costs | | | 7,294 | | | 968 | | | 8,262 | | | | 70 | | | | 2,731 | | Gain on sale of business | | | | — | | | | (82,574 | ) | Equity method investment (income) loss, net | | | | (468 | ) | | | (1,376 | ) | Other (income) expense, net | | | 4,907 | | | | (4,487 | ) | | | (248 | ) | | | 6,002 | | | | 16,411 | | Adjusted EBITDA | | | 568,952 | | | | 500,846 | | | 1,512,887 | | | | 839,325 | | | | 674,139 | | Less: Capital expenditures | | | 262,352 | | | | 217,766 | | | | 659,481 | | | | 391,934 | | | | 293,229 | | Adjusted EBITDA less capital expenditures | | $ | 306,600 | | | $ | 283,080 | | | $ | 853,406 | | | $ | 447,391 | | | $ | 380,910 | |
| | Year Ended December 31, | | | Three Years Ended | | | Year Ended December 31, | | (in thousands) | | 2019 (1) | | 2018 | | | December 31, 2019 (2) | | | 2021 | | | 2020 | | Net cash provided by operating activities | | $ | 491,741 | | | $ | 407,769 | | | $ | 1,223,996 | | | $ | 704,345 | | | $ | 574,371 | | Capital expenditures | | (262,352 | ) | | (217,766 | ) | | (659,481 | ) | | | (391,934 | ) | | | (293,229 | ) | Interest expense | | 71,729 | | | 60,415 | | | 179,008 | | | | 113,449 | | | | 73,607 | | Amortization of debt issuance costs | | (4,646 | ) | | (4,163 | ) | | (11,983 | ) | | Non-cash interest expense | | | | (9,157 | ) | | | (4,305 | ) | Income tax provision | | 55,233 | | | 47,224 | | | 58,230 | | | | 45,765 | | | | 76,317 | | Changes in operating assets and liabilities | | (18,118 | ) | | 18,621 | | | 20,411 | | | | 8,821 | | | | 40,426 | | Increase (decrease) in deferred income taxes | | (50,011 | ) | | (34,973 | ) | | 1,373 | | | Loss on deferred compensation | | 400 | | | 425 | | | 3,578 | | | Change in deferred income taxes | | | | (28,993 | ) | | | (87,182 | ) | (Gain) loss on deferred compensation | | | | 174 | | | | 231 | | Acquisition-related costs | | 9,590 | | 1,773 | | | 17,305 | | | | 10,770 | | | | 3,873 | | Severance expense | | 215 | | 2,347 | | | 8,023 | | | Write-off of debt issuance costs | | (4,210 | ) | | (110 | ) | | (4,933 | ) | | | (2,131 | ) | | | (6,181 | ) | System conversion costs | | 4,828 | | 5,037 | | | 9,865 | | | | 4,831 | | | | 1,350 | | Rebranding costs | | 7,294 | | 968 | | | 8,262 | | | | 70 | | | | 2,731 | | Fair value adjustments | | | | (48,027 | ) | | | (17,510 | ) | Gain on step acquisition | | | | 33,406 | | | | — | | Other (income) expense, net | | | 4,907 | | | | (4,487 | ) | | | (248 | ) | | | 6,002 | | | | 16,411 | | Adjusted EBITDA less capital expenditures | | $ | 306,600 | | | $ | 283,080 | | | $ | 853,406 | | | $ | 447,391 | | | $ | 380,910 | |
(1) Cable One, Inc. ▪ 2022 Proxy Statement | Includes Clearwave and Fidelity operations for the periods beginning January 8, 2019 and October 1, 2019, respectively, the date on which each was acquired.
| (2)
| Includes NewWave, Clearwave and Fidelity operations for the periods beginning May 1, 2017, January 8, 2019 and October 1, 2019, respectively, the date on which each was acquired. A-2 |
Cable One, Inc. ▪ 2020 Proxy Statement | A-2 |
ANNEXANNEX B
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF CABLE ONE, INC. Effective [●], 2022 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: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 )amended), 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 (the “Prior Amended and Restated Certificate of Incorporation”), and was further amended and restated by an Amended and Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on May 18, 2020 and effective as of such date (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.DGCL. 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 LawDGCL. Cable One, Inc. ▪ 2022 Proxy Statement | | B-1 |
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. B-1 | Cable One, Inc. ▪ 2020 Proxy Statement |
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.DGCL. (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. B-2 | | Cable One, Inc. ▪ 2022 Proxy Statement |
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. Cable One, Inc. ▪ 2020 Proxy Statement | B-2
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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 outstandingoutstanding and entitled to vote thereon.thereon. Cable One, Inc. ▪ 2022 Proxy Statement | | B-3 |
(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. B-4 | | Cable One, Inc. ▪ 2022 Proxy Statement |
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%a majority 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. B-3 | Cable One, Inc. ▪ 2020 Proxy Statement |
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] Cable One, Inc.▪ 2020 2022 Proxy Statement | B-4
| B-5 |
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.________, 2022. | Cable One, Inc.CABLE ONE, INC.
| | | | | | | | | | | By: | | | | | Name: | | | | Title: | |
B-5B-6 | | Cable One, Inc. ▪ 2020 2022 Proxy Statement |
ANNEX C CABLE ONE, INC. 2022 OMNIBUS INCENTIVE COMPENSATION PLAN SECTION 1. Purpose; Impact on Prior Plans. This Cable One, Inc. 2022 Omnibus Incentive Compensation Plan (the “Plan”) is intended to promote the interests of the Company and its stockholders by providing employees, directors and Consultants (as defined below) of the Company and its Subsidiaries (as defined below) with incentives and rewards to encourage them to continue in the service of the Company and its Subsidiaries and with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. After the Effective Date (as defined below), this Plan will supersede and replace the Amended and Restated Cable One, Inc. 2015 Omnibus Incentive Compensation Plan (the “2015 Plan”) and all other Prior Plans (as defined below). No awards will be granted under the 2015 Plan or any Prior Plan on or after the Effective Date, provided, however, that any awards granted under the 2015 Plan or any Prior Plan prior to the Effective Date shall remain in effect pursuant to their respective terms. SECTION 2. Term of the Plan. (a) Effective Date. The Plan was adopted by the Board (as defined below) on March 28, 2022 and shall become effective as of the date it is approved by the Company’s stockholders at the Company’s 2022 Annual Meeting of Stockholders (the date of such approval, the “Effective Date”). (b) Expiration Date. As set forth in Section 8, the Board may terminate the Plan at any time for any reason. Without limiting the generality of the foregoing, no Incentive Stock Option shall be granted under the Plan after the tenth anniversary of the date of its adoption by the Board. Any Awards that are outstanding after the termination of the Plan shall remain in effect according to this Plan and the applicable Award Agreement (as defined below) and, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, the authority of the Board or the Committee (as defined below) to amend, alter, adjust, suspend, discontinue or terminate any such Award or to waive any conditions or rights under any such Award, shall continue thereafter. SECTION 3. Definitions. As used herein, the following terms shall have the meanings set forth below: “Affiliate” means (a) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company, and/or (b) any entity in which the Company has a significant equity interest, in either case as determined by the Committee. “Applicable Exchange” means the New York Stock Exchange or any other national stock exchange or quotation system on which the Shares may be listed or quoted. “Award” means any award that is permitted under Section 7 and granted under the Plan or any Prior Plan. C-1 | | Cable One, Inc. ▪ 2022 Proxy Statement |
“Award Agreement” means any written or electronic agreement, contract or other instrument or document evidencing any Award, which may (but need not) require execution or acknowledgment by a Participant. “Board” means the Board of Directors of the Company. “Cash Incentive Award” means an Award (a) granted pursuant to Section 7(h), (b) that is settled in cash, and (c) the value of which is set by the Committee and is not calculated by reference to the Fair Market Value of a Share. “Change of Control” shall (a) have the meaning set forth in an Award Agreement; provided, however, that except in the case of a transaction similar to a transaction described in subparagraph (b)(iii) below, any definition of Change of Control set forth in an Award Agreement shall provide that a Change of Control shall not occur until consummation or effectiveness of a change in control of the Company, rather than upon the announcement, commencement, stockholder approval or other potential occurrence of any event or transaction that, if completed, would result in a change in control of the Company, or (b) if there is no definition set forth in an Award Agreement, means the occurrence of any of the following events following the Effective Date: (i) during any period of 24 consecutive calendar months, individuals who were directors of the Company on the first day of such period (the “Incumbent Directors”) cease for any reason to constitute a majority of the Board; provided, however, that any individual becoming a director subsequent to the first day of such period whose election, or nomination for election, by the Company’s stockholders was approved by a vote of at least a majority of the Incumbent Directors shall be considered as though such individual were an Incumbent Director, but excluding, for purposes of this proviso, any such individual whose initial assumption of office occurs as a result of an actual or threatened proxy contest with respect to election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a “person” (as used in Section 13(d) of the Exchange Act) (a “Person”), in each case other than the Board; (ii) the consummation of (A) a merger, consolidation, statutory share exchange or similar form of corporate transaction involving (x) the Company or (y) any of its Subsidiaries, but in the case of this clause (y) only if Company Voting Securities (as defined below) are issued or issuable (each of the events referred to in this clause (A) being hereinafter referred to as a “Reorganization”) or (B) the sale or other disposition of all or substantially all the assets of the Company to an entity that is not an Affiliate (a “Sale”), in each case, if such Reorganization or Sale requires the approval of the Company’s stockholders under the law of the Company’s jurisdiction of organization (whether such approval is required for such Reorganization or Sale or for the issuance of securities of the Company in such Reorganization or Sale), unless, immediately following such Reorganization or Sale, (1) all or substantially all the Persons who were the “beneficial owners” (as used in Rule 13d-3 under the Exchange Act (or a successor rule thereto)) of the securities eligible to vote for the election of the Board (“Company Voting Securities”) outstanding immediately prior to the consummation of such Reorganization or Sale continue to beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the corporation or other entity resulting from such Reorganization or Sale (including a corporation or other entity that, as a result of such transaction, owns the Company or all or substantially all the Company’s assets either directly or through one or more subsidiaries) (the “Continuing Company”) in substantially the same proportions as their ownership, immediately prior to the consummation of such Reorganization or Sale, of the outstanding Company Voting Securities (excluding, for such purposes, any outstanding voting securities of the Continuing Company that such beneficial owners hold immediately following the consummation of the Reorganization or Sale as a result of their ownership prior to such consummation of voting securities of any corporation or other entity involved in or forming part of such Reorganization or Sale other than the Company), (2) no Person (excluding any employee benefit plan (or related trust) sponsored or maintained by the Continuing Company or any entity controlled by the Continuing Company) beneficially owns, directly or indirectly, 30% or more of the combined voting power of the then outstanding voting securities of the Continuing Company and (3) at least a majority of the members of the board of directors of the Continuing Company were Incumbent Directors at the time of the execution of the definitive agreement providing for such Reorganization or Sale or, in the absence of such an agreement, at the time at which approval of the Board was obtained for such Reorganization or Sale; Cable One, Inc. ▪ 2022 Proxy Statement | | C-2 |
(iii) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company unless such liquidation or dissolution is part of a transaction or series of transactions described in subparagraph (b)(ii) above that does not otherwise constitute a Change of Control; or (iv) any Person, corporation or other entity or “group” (as used in Section 13(d) of the Exchange Act) (other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate or (C) any entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the voting power of the Company Voting Securities) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company Voting Securities; provided, however, that for purposes of this subparagraph (b)(iv), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Company, (x) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate (y) any acquisition by an underwriter temporarily holding such Company Voting Securities pursuant to an offering of such securities or any acquisition by a pledgee of Company Voting Securities holding such securities as collateral or temporarily holding such securities upon foreclosure of the underlying obligation or (z) any acquisition pursuant to a Reorganization or Sale that does not constitute a Change of Control for purposes of subparagraph (ii) above; provided that, to the extent any Award provides for the payment of non-qualified deferred compensation subject to Section 409A of the Code, an event set forth above shall not constitute a “Change of Control” unless it also constitutes a “change in ownership”, a “change in the effective control” or a “change in the ownership of substantial assets” of the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5) and such limitation is necessary to avoid an impermissible distribution or other event resulting in adverse tax consequences under Section 409A. “Clawback Policy” means the Clawback Policy of the Company adopted by the Board effective January 1, 2019, as may be amended from time to time. C-3 | | Cable One, Inc. ▪ 2022 Proxy Statement |
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto, and the regulations promulgated thereunder. “Committee” means the Compensation and Talent Management Committee of the Board or a subcommittee thereof, or such other committee of the Board as may be designated by the Board to administer the Plan. “Company” means Cable One, Inc., a corporation organized under the laws of Delaware, together with any successor thereto. “Consultant” means any consultant or advisor or independent contractor who is a natural person and who provides services to the Company or any Subsidiary, so long as such person (a) renders bona fide services that are not in connection with the offer and sale of the Company’s securities in a capital raising transaction, (b) does not directly or indirectly promote or maintain a market for the Company’s securities, and (c) otherwise qualifies as a consultant under the applicable rules of the SEC for registration of shares of stock on a Form S-8 registration statement. “Deferred Share Unit” means a deferred share unit Award that represents an unfunded and unsecured promise to deliver Shares in accordance with the terms of the applicable Award Agreement. “Effective Date” shall have the meaning set forth in Section 2(a). “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto, and the regulations promulgated thereunder. “Exercise Price” means (a) in the case of each Option, the price specified in the applicable Award Agreement as the price-per-Share at which Shares may be purchased pursuant to such Option, or (b) in the case of each SAR, the price specified in the applicable Award Agreement as the reference price-per-Share used to calculate the amount payable to the Participant pursuant to such SAR. “Fair Market Value” means, except as otherwise provided in the applicable Award Agreement, (a) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee, and (b) with respect to Shares, as of any date, (i) the closing per-share sales price of Shares as reported by the Applicable Exchange for such date or if there were no sales on such date, on the closest preceding date on which there were sales of Shares or (ii) in the event there is no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Committee and in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. “Incentive Stock Option” means an option to purchase Shares from the Company that (a) is granted under Section 7(b) of the Plan, and (b) is intended to qualify for special Federal income tax treatment pursuant to Sections 421 and 422 of the Code, as now constituted or subsequently amended, or pursuant to a successor provision of the Code, and which is so designated in the applicable Award Agreement. Cable One, Inc. ▪ 2022 Proxy Statement | | C-4 |
“Independent Director” means a member of the Board (a) who is neither an employee of the Company nor an employee of any Affiliate, and (b) who, at the time of acting, is a “Non-Employee Director” under Rule 16b-3. “Non-Employee Director” means a member of the Board who is neither an employee of the Company nor an employee of any Affiliate. “Nonqualified Stock Option” means an option to purchase Shares from the Company that (a) is granted under Section 7(b) of the Plan, and (b) is not an Incentive Stock Option. “Option” means an Incentive Stock Option or a Nonqualified Stock Option or both, as the context requires. “Participant” means any director, officer, employee or Consultant (including any prospective director, officer, employee or Consultant) of the Company or its Affiliates who is eligible for an Award under Section 6 and who is selected by the Committee to receive an Award under the Plan or who receives a Substitute Award pursuant to Section 5(c). “Performance Criteria” means the criterion or criteria that the Committee may select for purposes of establishing the Performance Goal(s) for a Performance Period for an Award that is earned based on the attainment of Performance Goals. The Performance Criteria that may (but need not) be used to establish the Performance Goal(s) with respect to an Award may be based on the attainment of specific levels of performance of the Company or any of its Subsidiaries, Affiliates, divisions or operational units, or any combination of the foregoing, and may include any combination of the following criteria: (a) share price; (b) net income or earnings before or after taxes (including earnings before interest, taxes, depreciation and/or amortization) (“EBITDA”); (c) adjusted EBITDA; (d) earnings per share (including specified types or categories thereof); (e) cash flow (including specified types or categories thereof); (f) revenues (including specified types or categories thereof); (g) return measures (including specified types or categories thereof); (h) stockholder return measures (including specified types or categories thereof); (i) sales or product volume; (j) working capital; (k) gross or net profitability/profit margins (including profitability of an identifiable business unit or product); (l) earnings from continuing operations; (m) costs (including specified types or categories thereof) and cost reduction goals; (n) budget comparisons; (o) implementation or completion of critical projects; (p) market share (in the aggregate or by segment); (q) the formation of joint ventures, research or development collaborations, or the completion of other transactions; (r) economic value; (s) enterprise value; (t) book, economic book or intrinsic book value (including book value per share); (u) improvements in capital structure; (v) customer satisfaction survey results; (w) operating income; (x) product unit and pricing targets; (y) combined ratio; (z) operating ratio; (aa) leverage ratio; (bb) credit rating; (cc) borrowing levels; (dd) objective measures of productivity or operating efficiency; (ee) expenses (including specified types or categories thereof); (ff) product unit and pricing targets; (gg) safety and accident rates; (hh) days sales outstanding; (ii) operating metrics relating to sales, installations or customer service or satisfaction; (jj) capital spending management, network upgrades or product or service deployments; (kk) capital expenditures as a percentage of revenue, capital expenditures as a percentage of EBITDA, capital expenditures as a percentage of adjusted EBITDA, or capital expenditures as a percentage of other financial performance metrics; and (ll) market share or penetration, subscriber or customer acquisition or retention, ratings or viewership. Such Performance Criteria may be applied on an absolute basis, be relative to one or more peer companies of the Company or indices or any combination thereof or, if applicable, be computed on an accrual or cash accounting basis. C-5 | | Cable One, Inc. ▪ 2022 Proxy Statement |
“Performance Goal” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon the Performance Criteria. “Performance Period” means the one or more periods of time as the Committee may select over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of any Award that is earned based on the attainment of Performance Goals. “Performance Unit” means an Award under Section 7(g) of the Plan that has a value set by the Committee (or that is determined by reference to a valuation formula specified by the Committee or the Fair Market Value of Shares), which value may be paid to the Participant by delivery of cash or Shares, or any combination thereof, upon achievement of such Performance Goals during the relevant Performance Period as the Committee shall establish at the time of such Award or thereafter. “Plan” shall have the meaning specified in Section 1. “Prior Plan” means the Amended and Restated Cable One, Inc. 2015 Omnibus Incentive Compensation Plan and the Cable One, Inc. 2015 Omnibus Incentive Compensation Plan. “Restricted Share” means a Share that is granted under Section 7(d) of the Plan that is subject to certain transfer restrictions, forfeiture provisions and/or other terms and conditions specified herein and in the applicable Award Agreement. “RSU” means a restricted stock unit Award that is granted under Section 7(e) of the Plan and is designated as such in the applicable Award Agreement and that represents an unfunded and unsecured promise to deliver Shares, cash, or a combination thereof in accordance with the terms of the applicable Award Agreement. “Rule16b-3” means Rule 16b-3 as promulgated and interpreted by the SEC under the Exchange Act or any successor rule or regulation thereto as in effect from time to time. “SAR” means a stock appreciation right Award that is granted under Section 7(c) of the Plan and that represents an unfunded and unsecured promise to deliver Shares, cash, or a combination thereof, equal in value to the excess, if any, of the Fair Market Value per Share over the Exercise Price per Share of the SAR, subject to the terms of the applicable Award Agreement. “SEC” means the Securities and Exchange Commission or any successor thereto and shall include the staff thereof. “Shares” means shares of common stock of the Company, $0.01 par value, or such other securities of the Company (a) into which such shares shall be changed by reason of a recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar transaction, or (b) as may be determined by the Committee pursuant to Section 5(b). Cable One, Inc. ▪ 2022 Proxy Statement | | C-6 |
“Subsidiary” means any entity in which the Company, directly or indirectly, possesses fifty percent (50%) or more of the total combined voting power of all classes of its stock. “Substitute Awards” means Awards granted or Shares issued by the Company in assumption or conversion of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines. Substitute Awards may reflect the original terms of the awards being assumed, converted, substituted or exchanged, and need not comply with other specific terms of the Plan, and may account for Shares substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the applicable combination transaction. Any Substitute Award shall be granted in a manner that is consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. “Treasury Regulations” means all proposed, temporary and final regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). SECTION 4. Administration. (a) Composition of the Committee. The Plan shall be administered by the Committee, which shall be composed of one or more directors, as determined by the Board; provided that, to the extent necessary to comply with the rules of the Applicable Exchange and Rule 16b-3 and any other applicable laws or rules, the Committee shall be composed of two or more directors, all of whom shall be Independent Directors and all of whom shall meet the independence requirements of the Applicable Exchange. (b) Authority of the Committee. Subject to the terms of the Plan and applicable law, and in addition to the other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have sole and plenary authority to administer the Plan, including the authority to (i) designate Participants, (ii) determine the type or types of Awards to be granted to a Participant, (iii) determine the number of Shares or dollar value to be covered by, or with respect to which payments, rights or other matters are to be calculated in connection with, Awards, (iv) determine the terms and conditions of any Awards, (v) determine the vesting schedules of Awards and, if certain performance requirements must be attained in order for an Award to vest or be settled or paid, establish such performance requirements and certify whether, and to what extent, such performance requirements have been attained, (vi) determine whether, to what extent and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended, (vii) determine whether, to what extent and under what circumstances cash or Shares shall be deferred either automatically or at the election of the holder thereof or of the Committee, (viii) interpret, administer, reconcile any inconsistency in, correct any default in and/or supply any omission in, the Plan and any instrument or agreement relating to, or Award made under, the Plan or any Prior Plan, (ix) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan, (x) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards, (xi) amend an outstanding Award or grant a replacement Award for an Award previously granted under the Plan if, in its sole discretion, the Committee determines that (A) the tax consequences of such Award to the Company or the Participant differ from those consequences that were expected to occur on the date the Award was granted or (B) clarifications or interpretations of, or changes to, tax law or regulations permit Awards to be granted that have more favorable tax consequences than initially anticipated, and (xii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. C-7 | | Cable One, Inc. ▪ 2022 Proxy Statement |
(c) Committee Decisions. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole and plenary discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any Award and any stockholder. Without limiting the generality of the foregoing, the Committee shall determine whether an authorized leave of absence, or absence in military or government service, shall constitute termination of employment. The employment of a Participant with the Company shall be deemed to have terminated for all purposes of the Plan if such Participant is employed by or provides services to a Person that is a Subsidiary of the Company and such Person ceases to be a Subsidiary of the Company, unless the Committee determines otherwise. A Participant who ceases to be an employee of the Company but continues, or simultaneously commences, services as a director of the Company shall not be deemed to have had a termination of employment for purposes of the Plan. (d) Indemnification. No member of the Board, the Committee or any employee of the Company (each such person, a “Covered Person”) shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award. Each Covered Person shall be indemnified and held harmless by the Company from and against (i) any loss, cost, liability or expense (including attorneys’ fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by such Covered Person, with the Company’s approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person; provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding, and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person’s bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company’s organizational documents, in each case, as may be amended from time to time. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company’s organizational documents, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such persons or hold them harmless. Cable One, Inc. ▪ 2022 Proxy Statement | | C-8 |
(e) Delegation of Authority to Senior Officers. The Committee may delegate, on such terms and conditions as it determines in its sole and plenary discretion, to one or more senior officers of the Company, subject to such restrictions and limitation as the Committee may specify and to the requirements of applicable law, the authority to make grants of Awards to officers (other than any officer subject to Section 16 of the Exchange Act) and employees of the Company and its Affiliates (including any prospective officer (other than any such officer who is expected to be subject to Section 16 of the Exchange Act) or prospective employee), and all necessary and appropriate decisions and determinations with respect thereto. (f) Awards to Non-Employee Directors. Notwithstanding anything to the contrary contained herein, the Board may, in its sole and plenary discretion, at any time and from time to time, grant Awards to Non-Employee Directors or administer the Plan with respect to such Awards. In any such case, the Board shall have all the authority and responsibility granted to the Committee herein. SECTION 5. Shares Available for Awards; Cash Payable Pursuant to Awards; Award Limits. (a) Shares and Cash Available; Award Limits. (i) Subject to the share counting rules of this Plan and adjustment as provided in Section 5(b), as of the Effective Date, the maximum aggregate number of Shares that may be delivered pursuant to Awards granted under the Plan (the “Plan Share Limit”) shall be 482,314 Shares, less one Share for every Share that was subject to an award granted under the 2015 Plan after December 31, 2021and prior to the Effective Date. For the avoidance of doubt, no Awards will be granted under the 2015 Plan or any other Prior Plan on or after the Effective Date. (ii) Subject to adjustment as provided in Section 5(b), each Share that is subject to an Award that is denominated in Shares shall reduce the aggregate number of Shares that may be delivered under the Plan by one Share. (iii) If, after the Effective Date (or after December 31, 2021, with respect to awards granted under the 2015 Plan), any Award granted under the Plan or any Prior Plan is (A) forfeited, or otherwise expires, terminates or is canceled or forfeited without the delivery of all Shares subject thereto, or (B) is settled other than wholly by delivery of Shares (including cash settlement), then, in the case of clauses (A) and (B), the number of Shares subject to such Award that were not issued with respect to such Award will not be treated as issued for purposes of reducing the Plan Share Limit (or, with respect to awards granted under the 2015 Plan, shall be added to the Plan Share Limit). For the avoidance of doubt, the following Shares shall be added (or added back as applicable) to the Plan Share Limit upon the occurrence of any of the following after the Effective Date (or after December 31, 2021, with respect to awards granted under the 2015 Plan): (1) Shares tendered or otherwise used by a Participant or withheld by the Company in payment of the Exercise Price of an Option (or an option granted under a Prior Plan); (2) Shares tendered or otherwise used by a Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award (or an award granted under a Prior Plan); (3) Shares subject to a SAR (or a stock appreciation right granted under a Prior Plan) that are not issued in connection with its stock settlement on exercise thereof; and (4) Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options (or options granted under a Prior Plan). C-9 | | Cable One, Inc. ▪ 2022 Proxy Statement |
(iv) Notwithstanding any other provision in the Plan to the contrary, the aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted to any Non-Employee Director during any fiscal year, plus the aggregate amount of all cash payments made to such Non-Employee Director for services rendered as a director for the same fiscal year, shall not exceed $750,000 (the “Annual Director Compensation Limit”). For the avoidance of doubt, any compensation that is deferred shall be counted toward the Annual Director Compensation Limit during the year in which it is first earned. (v) Subject to adjustment as provided in Section 5(b), the maximum aggregate number of Shares that may be delivered pursuant to Incentive Stock Options granted under the Plan shall be 482,314 Shares (such amount, the “Plan ISO Limit”). (b) Adjustments for Changes in Capitalization and Similar Events. (i) In the event of any extraordinary dividend or other extraordinary distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, rights offering, stock split, reverse stock split, split-up or spin-off, or other “equity restructuring” (within the meaning of Accounting Standards Codification 718) the Committee shall equitably adjust any or all of (A) the number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted, including (1) Plan Share Limit, and (2) the Plan ISO Limit, and (B) the terms of any outstanding Award, including (1) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the Exercise Price, if applicable, with respect to any Award; provided, however, that the Committee shall determine the method and manner in which to effect such equitable adjustment. (ii) In the event that the Committee determines that any reorganization, merger, consolidation, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares (including any Change of Control) such that an adjustment is determined by the Committee in its discretion to be appropriate or desirable, then the Committee may (A) in such manner as it may deem appropriate or desirable, equitably adjust any or all of (1) the number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted, including (V) the Plan Share Limit, and (W) the Plan ISO Limit, and (2) the terms of any outstanding Award, including (X) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (Y) the Exercise Price, if applicable, with respect to any Award, (B) if deemed appropriate or desirable by the Committee, make provision for a cash payment to the holder of an outstanding Award in consideration for the cancelation of such Award, including, in the case of an outstanding Option or SAR, a cash payment to the holder of such Option or SAR in consideration for the cancelation of such Option or SAR in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Shares subject to such Option or SAR over the aggregate Exercise Price of such Option or SAR, and (C) if deemed appropriate or desirable by the Committee, cancel and terminate any Option or SAR having a per-Share Exercise Price equal to, or in excess of, the Fair Market Value of a Share subject to such Option or SAR without any payment or consideration therefor. Cable One, Inc. ▪ 2022 Proxy Statement | | C-10 |
(c) Substitute Awards. Substitute Awards shall not reduce the Plan Share Limit, nor shall Shares subject to a Substitute Award be added to the Plan Share Limit. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges or combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition, merger or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition, merger or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Plan Share Limit (and Shares subject to such Awards shall not be added to the Plan Share Limit); provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre‑existing plan, absent the acquisition, merger or combination, and shall only be made to individuals who were not employees or directors prior to such acquisition, merger or combination. (d) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, of treasury Shares not reserved for any other purpose, or of Shares purchased on the open market. SECTION 6. Eligibility. Any director, officer, employee or Consultant (including any prospective director, officer, employee or Consultant) of the Company or any of its Affiliates shall be eligible to be designated a Participant. SECTION 7. Awards. (a) Types of Awards. Awards may be made under the Plan in the form of (i) Options, (ii) SARs, (iii) Restricted Shares, (iv) RSUs, (v) Performance Units, (vi) Cash Incentive Awards, (vii) Deferred Share Units, and (viii) other equity based or equity related Awards that the Committee determines are consistent with the purpose of the Plan and the interests of the Company. Awards may be granted in tandem with other Awards. No Incentive Stock Option (other than an Incentive Stock Option that may be assumed or issued by the Company in connection with a transaction to which Section 424(a) of the Code applies) may be granted to a person who is ineligible to receive an Incentive Stock Option under the Code. C-11 | | Cable One, Inc. ▪ 2022 Proxy Statement |
(b) Options. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to determine (A) the Participants to whom Options shall be granted, (B) the number of Shares subject to each Option to be granted to each Participant, (C) the Exercise Price thereof, (D) whether each Option shall be an Incentive Stock Option or a Nonqualified Stock Option, (E) the terms and conditions of each Option, including the vesting criteria, term, methods of exercise and methods and form of settlement, and (F) whether the Option should vest based on the attainment of Performance Goals, on the passage of time, or on a combination thereof. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code and any regulations related thereto, as may be amended from time to time. Each Option granted under the Plan shall be a Nonqualified Stock Option unless the applicable Award Agreement expressly states that the Option is intended to be an Incentive Stock Option. If an Option is intended to be an Incentive Stock Option, and if, for any reason, such Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a Nonqualified Stock Option appropriately granted under the Plan; provided that such Option (or portion thereof) otherwise complies with the Plan’s requirements relating to Nonqualified Stock Options. (ii) Exercise Price. The Exercise Price of each Share covered by each Option shall be not less than 100% of the Fair Market Value of such Share (determined as of the date the Option is granted); provided, however, that in the case of each Incentive Stock Option granted to an employee who, at the time of the grant of such Option, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Affiliate, the per‑Share Exercise Price shall be no less than 110% of the Fair Market Value per Share on the date of the grant; provided, further, that Options granted as Substitute Awards may be granted with a per Share exercise price that is less than 100% of the Fair Market Value per Share on the date of grant. (iii) Vesting and Exercise. Each Option shall be vested and exercisable at such times, in such manner and subject to such terms and conditions as the Committee may, in its sole and plenary discretion, specify in the applicable Award Agreement or thereafter. Except as otherwise specified by the Committee in the applicable Award Agreement, each Option may only be exercised to the extent that it has already vested at the time of exercise. Each Option shall be deemed to be exercised when written or electronic notice of such exercise has been given to the Company in accordance with the terms of the Award by the person entitled to exercise the Award and full payment pursuant to Section 7(b)(iv) for the Shares with respect to which the Award is exercised has been received by the Company. Each Option may be exercised in whole or in part; provided, however, an Option shall not be exercisable with respect to fractional Shares. The partial exercise of an Option shall not cause the expiration, termination or cancelation of the remaining portion thereof. The Committee may impose such conditions with respect to the exercise of each Option, including any conditions relating to the application of Federal or state securities laws, as it may deem necessary or advisable. Cable One, Inc. ▪ 2022 Proxy Statement | | C-12 |
(iv) Payment. (A) No Shares shall be delivered pursuant to any exercise of an Option until payment in full of the aggregate Exercise Price therefor is received by the Company, and the Participant has paid to the Company (or the Company has withheld in accordance with Section 10(d)) an amount equal to any Federal, state, local and foreign income and employment taxes required to be withheld. Such payments may be made in cash (or its equivalent) or, in the Committee’s sole and plenary discretion, (1) by exchanging Shares owned by the Participant (which are not the subject of any pledge or other security interest), (2) if there shall be a public market for the Shares at such time, subject to such rules as may be established by the Committee, through delivery of irrevocable instructions to a broker to sell the Shares otherwise deliverable upon the exercise of the Option and to deliver cash promptly to the Company, (3) by having the Company withhold Shares from the Shares otherwise issuable pursuant to the exercise of the Option, or (4) through any other method (or combination of methods) as approved by the Committee; provided that the combined value of all cash and cash equivalents and the Fair Market Value of any such Shares so tendered to the Company, together with any Shares withheld by the Company in accordance with this Section 7(b)(iv) or Section 10(d), as of the date of such tender, is at least equal to such aggregate Exercise Price and the amount of any Federal, state, local or foreign income or employment taxes required to be withheld, if applicable. (B) Wherever in the Plan or any Award Agreement a Participant is permitted to pay the Exercise Price of an Option or taxes relating to the exercise of an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such Shares, in which case the Company shall treat the Option as exercised without further payment and shall withhold such number of Shares from the Shares acquired by the exercise of the Option. (v) Expiration/Forfeiture. Except as otherwise set forth in the applicable Award Agreement, each Option shall expire immediately, without any payment, upon the tenth anniversary of the date the Option is granted (or, in the case of vested Options, three months after the date the Participant who is holding the Option ceases to be a director, officer, employee or Consultant of the Company or one of its Affiliates, if earlier). In no event may an Option be exercisable after the tenth anniversary of the date the Option is granted. (c) SARs. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to determine (A) the Participants to whom SARs shall be granted, (B) the number of SARs to be granted to each Participant, (C) the Exercise Price thereof, (D) the terms and conditions of each SAR, including the vesting criteria, term, methods of exercise and methods and form of settlement, and (E) whether the SARs should vest based on the attainment of Performance Goals, on the passage of time, or on a combination thereof. (ii) Exercise Price. The Exercise Price of each Share covered by a SAR shall be not less than 100% of the Fair Market Value of such Share (determined as of the date the SAR is granted); provided that SARs granted as Substitute Awards may be granted with a per Share exercise price that is less than 100% of the Fair Market Value per Share on the date of grant. (iii) Vesting and Exercise. Each SAR shall entitle the Participant to receive an amount upon exercise equal to the excess, if any, of the Fair Market Value of a Share on the date of exercise of the SAR over the Exercise Price thereof. The Committee shall determine, in its sole and plenary discretion, whether a SAR shall be settled in cash, Shares, or a combination thereof. Each SAR shall be vested and exercisable at such time, in such manner and subject to such terms and conditions as the Committee may, in its discretion, specify in the applicable Award Agreement or thereafter. C-13 | | Cable One, Inc. ▪ 2022 Proxy Statement |
(iv) Expiration/Forfeiture. Except as otherwise set forth in the applicable Award Agreement, each SAR shall expire immediately, without any payment, upon the tenth anniversary of the date the SAR is granted (or, in the case of vested SARs, three months after the date the Participant who is holding the SAR ceases to be a director, officer, employee or Consultant of the Company or one of its Affiliates, if earlier). In no event may SAR be exercisable after the tenth anniversary of the date the SAR is granted. (d) Restricted Shares. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to determine (A) the Participants to whom Restricted Shares shall be granted, (B) the number of Restricted Shares to be granted to each Participant, (C) the duration of the period during which, and the conditions, if any, under which, the Restricted Shares may vest or may be forfeited to the Company, (D) the terms and conditions of each such Award, including the vesting criteria, term and methods and form of settlement, and (E) whether the Restricted Shares should vest based on the attainment of Performance Goals, on the passage of time, or on a combination thereof. (ii) Share Certificates. Each Restricted Share may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Shares are registered in the name of the applicable Participant, such certificates must bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Shares, and the Company may, at its discretion, retain physical possession of such certificates until such time as all applicable restrictions lapse. (iii) Rights as a Stockholder. In connection with each grant of Restricted Shares, except as provided in the applicable Award Agreement and subject to Section 7(j), the Participant shall be entitled to the rights of a stockholder (including the right to vote and the payment of dividends or dividend equivalents) in respect of such Restricted Shares. (e) RSUs. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to determine (A) the Participants to whom RSUs shall be granted, (B) the number of RSUs to be granted to each Participant, (C) the duration of the period during which, and the conditions, if any, under which, the RSUs may vest or may be forfeited to the Company, (D) the terms and conditions of each such Award, including the vesting criteria, term and methods and form of settlement, and (E) whether the RSUs should vest based on the attainment of Performance Goals, on the passage of time, or on a combination thereof. (ii) Payment/Lapse of Restrictions. Each RSU shall be granted with respect to a specified number of Shares (or a number of Shares determined pursuant to a specified formula) or shall have a value equal to the Fair Market Value of a specified number of Shares (or a number of Shares determined pursuant to a specified formula). RSUs shall be paid in cash, Shares, or a combination thereof, as determined in the sole and plenary discretion of the Committee, upon the lapse of restrictions applicable thereto, or otherwise in accordance with the applicable Award Agreement. Cable One, Inc. ▪ 2022 Proxy Statement | | C-14 |
(f) Performance Goals. (i) General. With respect to an Award that vests based on the attainment of Performance Goals, with regard to a particular Performance Period, the Committee shall have full discretion to select (A) the length of such Performance Period, (B) the Performance Criteria that will be used to establish the Performance Goal(s), (C) the kind(s) and/or level(s) of the Performance Goals(s) that is (are) to apply to the Company or any of its Subsidiaries, Affiliates, divisions or operational units, or any combination of the foregoing, and (D) any additional vesting conditions whether or not performance-based that may apply to such Awards. (ii) Modification of Performance Goals. The Committee is authorized at any time, in its sole and plenary discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period including but not limited to, (A) in the event of, or in anticipation of, any unusual or nonrecurring corporate item, transaction, event or development affecting the Company, or any of its Affiliates, Subsidiaries, divisions or operating units (to the extent applicable to such Performance Goal) or (B) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company or any of its Affiliates, Subsidiaries, divisions or operating units (to the extent applicable to such Performance Goal), or the financial statements of the Company or any of its Affiliates, Subsidiaries, divisions or operating units (to the extent applicable to such Performance Goal), or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles, law or business conditions. (g) Performance Units. (i) Grant. Subject to the provisions of the Plan, the Committee shall have sole and plenary authority to determine the Participants to whom Performance Units shall be granted. (ii) Value of Performance Units. Each Performance Unit shall have an initial value that is established by the Committee at the time of grant. The Committee shall set Performance Goals in its discretion which, subject to the provisions of this Plan and depending on the extent to which they are met during a Performance Period, will determine the number and/or value of Performance Units that will be paid out to the Participant. (iii) Earning of Performance Units. Subject to the provisions of the Plan, after the applicable Performance Period has ended, the holder of Performance Units shall be entitled to receive a payout of the number and value of Performance Units earned by the Participant over the Performance Period, to be determined by the Committee, in its sole and plenary discretion, as a function of the extent to which the corresponding Performance Goals have been achieved. C-15 | | Cable One, Inc. ▪ 2022 Proxy Statement |
(iv) Form and Timing of Payment of Performance Units. Subject to the provisions of the Plan, the Committee, in its sole and plenary discretion, may authorize the payment of earned Performance Units in the form of cash or in Shares (or in a combination thereof) that have an aggregate Fair Market Value equal to the value of the earned Performance Units at the close of the applicable Performance Period. Such Shares may be granted subject to any restrictions in the applicable Award Agreement deemed appropriate by the Committee. The determination of the Committee with respect to the form and timing of payout of such Awards shall be set forth in the applicable Award Agreement. (h) Cash Incentive Awards. (i)Grant. Subject to the provisions of the Plan, the Committee, in its sole and plenary discretion, shall have the authority to determine (A) the Participants to whom Cash Incentive Awards shall be granted, (B) subject to Section 5(a), the amount of Cash Incentive Awards to be granted to each Participant, (C) the duration of the period during which, and the conditions, if any, under which, the Cash Incentive Awards may vest or may be forfeited to the Company, and (D) the other terms and conditions of each Cash Incentive Award. Each Cash Incentive Award shall have an initial value that is established by the Committee at the time of grant. The Committee may set performance goals or other payment conditions in its discretion, which, depending on the extent to which they are met during a specified performance period, shall determine the amount and/or value of the Cash Incentive Award that shall be paid to the Participant. (ii) Earning of Cash Incentive Awards. Subject to the provisions of the Plan, after the applicable vesting period has ended, the holder of a Cash Incentive Award shall be entitled to receive a payout of the amount of the Cash Incentive Award earned by the Participant over the specified vesting period, which, in the case of any Cash Incentive Award the vesting of which is subject to the achievement of performance goals, shall be determined by the Committee, in its sole and plenary discretion, as a function of the extent to which the corresponding performance goals or other conditions to payment have been achieved. (i) Other Stock-Based Awards. Subject to the provisions of the Plan, the Committee shall have the sole and plenary authority to grant to Participants other equity-based or equity-related Awards (including Deferred Share Units and fully vested Shares) (whether payable in cash, equity or otherwise) in such amounts and subject to such terms and conditions as the Committee shall determine; provided that any such Awards must comply, to the extent deemed desirable by the Committee, with Rule 16b‑3 and applicable law. (j) Dividends and Dividend Equivalents. In the sole and plenary discretion of the Committee, the Committee may provide in the applicable Award Agreement, other than for an Option or SAR or Cash Incentive Award, for the payment of dividends or dividend equivalents to the Participant, payable in cash, Shares, or a combination thereof, on a deferred basis, on such terms and conditions as may be determined by the Committee in its sole and plenary discretion. The Committee may provide that the dividend equivalents (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested or accumulated and credited to a bookkeeping account. Notwithstanding the foregoing, any dividends (including payable in connection with Restricted Shares) or dividend equivalents (payable in connection with Awards other than Options or SARs) shall in all events be subject to the same restrictions and risk of forfeiture as the underlying Award and shall not be paid unless and until the underlying Award is vested or earned. Cable One, Inc. ▪ 2022 Proxy Statement | | C-16 |
SECTION 8. Amendment and Termination. (a) Amendments to the Plan. Subject to any applicable law or government regulation and to the rules of the Applicable Exchange, the Plan may be amended, modified or terminated by the Board without the approval of the stockholders of the Company, except that stockholder approval shall be required for any amendment that would (i) increase either the Plan Share Limit or the Plan ISO Limit, (ii) materially expand the types of awards available under the Plan or the class of employees or other individuals eligible to participate in the Plan, or (iii) result in the amendment, cancellation or action described in clause (i), (ii) or (iii) of the second sentence of Section 8(b) being permitted without the approval by the Company’s stockholders; provided, however, that any adjustment under Section 5(b) shall not constitute an increase for purposes of this Section 8(a)(i). No amendment, modification or termination of the Plan may, without the consent of the Participant to whom any Award shall theretofor have been granted, materially and adversely affect the rights of such Participant (or his or her transferee) under such Award, unless otherwise provided by the Committee in the applicable Award Agreement or made to comply with applicable law, tax rules, stock exchange rules or accounting rules. (b) Amendments to Awards. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate any Award theretofor granted, prospectively or retroactively; provided, however, that, except as set forth in the Plan, for such actions taken to comply with applicable law, tax rules, stock vesting rules or accounting rules or as otherwise provided by the Committee in the applicable Award Agreement, any such waiver, amendment, alteration, suspension, discontinuance, cancelation or termination that would materially and adversely impair the rights of any Participant or any holder or beneficiary of any Award theretofor granted shall not to that extent be effective without the consent of the applicable Participant, holder or beneficiary. Notwithstanding the preceding sentence, in no event may any Option or SAR (i) be amended to decrease the Exercise Price thereof, (ii) be canceled at a time when its Exercise Price exceeds the Fair Market Value of the underlying Shares in exchange for another Option or SAR or any Restricted Share, RSU, other equity-based Award, award under any other equity-compensation plan or any cash payment, or (iii) be subject to any action that would be treated, for accounting purposes, as a “repricing” of such Option or SAR, unless such amendment, cancelation or action is approved by the Company’s stockholders. For the avoidance of doubt, an adjustment to the Exercise Price of an Option or SAR that is made in accordance with Section 5(b) or Section 9 shall not be considered a reduction in Exercise Price or “repricing” of such Option or SAR. (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. Subject to the penultimate sentence of Section 8(b), the Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 5(b) or the occurrence of a Change of Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law (i) whenever the Committee, in its sole and plenary discretion, determines that such adjustments are appropriate or desirable, including providing for a substitution or assumption of Awards, accelerating the exercisability of, lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of such event, (ii) if deemed appropriate or desirable by the Committee, in its sole and plenary discretion, by providing for a cash payment to the holder of an Award in consideration for the cancelation of such Award, including, in the case of an outstanding Option or SAR, a cash payment to the holder of such Option or SAR in consideration for the cancelation of such Option or SAR in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Shares subject to such Option or SAR over the aggregate Exercise Price of such Option or SAR, and (iii) if deemed appropriate or desirable by the Committee, in its sole and plenary discretion, by canceling and terminating any Option or SAR having a per-Share Exercise Price equal to, or in excess of, the Fair Market Value of a Share subject to such Option or SAR without any payment or consideration therefor. C-17 | | Cable One, Inc. ▪ 2022 Proxy Statement |
SECTION 9. Change of Control. Unless otherwise provided in the applicable Award Agreement, in the event of a Change of Control after the Effective Date, unless provision is made in connection with the Change of Control for (a) assumption or continuation of Awards previously granted, or (b) substitution for such Awards of new awards covering stock of a successor corporation or its “parent corporation” (as defined in Section 424(e) of the Code) or “subsidiary corporation” (as defined in Section 424(f) of the Code) with appropriate adjustments as to the number and kinds of shares and the Exercise Prices, if applicable, (i) any outstanding Options or SARs then held by Participants that are unexercisable or otherwise unvested shall automatically be deemed exercisable or otherwise vested, as the case may be, as of immediately prior to such Change of Control, (ii) all Performance Units, Cash Incentive Awards, and Awards that vest based on the attainment of Performance Goals shall automatically vest as of immediately prior to such Change of Control as if the date of the Change of Control were the last day of the applicable Performance Period and “target” performance levels had been attained and shall be paid out as soon as practicable following such Change of Control, and (iii) all other outstanding Awards (i.e., other than Options, SARs, Performance Units, Cash Incentive Awards and Awards that vest based on the attainment of Performance Goals) then held by Participants that are unexercisable, unvested or still subject to restrictions or forfeiture, shall automatically be deemed exercisable and vested and all restrictions and forfeiture provisions related thereto shall lapse as of immediately prior to such Change of Control and shall be paid out as soon as practicable following such Change of Control. The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of Control has occurred and the date of the occurrence of such Change of Control and any incidental matters relating thereto. SECTION 10. General Provisions. (a) Nontransferability. Except as otherwise specified in the applicable Award Agreement, during the Participant’s lifetime, each Award (and any rights and obligations thereunder) shall be exercisable only by the Participant, or, if permissible under applicable law, by the Participant’s legal guardian or representative, and no Award (or any rights and obligations thereunder) may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that (i) the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance; (ii) no transfer by will or the laws of descent and distribution of any Award, or the right to exercise any Award, shall be effective to bind the Company unless the Committee shall have been furnished with (a) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the transfer, and (b) an agreement by the transferee to comply with all the terms and conditions of the Award that are or would have been applicable to the Participant and to be bound by the acknowledgements made by the Participant in connection with the grant of the Award; and (iii) the Board or the Committee may permit further transferability, on a general or specific basis, and may impose conditions and limitations on any permitted transferability; provided, however, that Incentive Stock Options shall not be transferable in any way that would violate Section 1.422-2(a)(2) of the Treasury Regulations and in no event may any Award (or any rights and obligations thereunder) be transferred in any way in exchange for value. All terms and conditions of the Plan and all Award Agreements shall be binding upon any permitted successors and assigns. Cable One, Inc. ▪ 2022 Proxy Statement | | C-18 |
(b) No Rights to Awards. No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant and may be made selectively among Participants, whether or not such Participants are similarly situated. (c) Share Certificates. All certificates or book entry credits for Shares or other securities of the Company or any Affiliate delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, the Applicable Exchange and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. Shares shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of one or more stock certificates. (d) Withholding. (i) Authority to Withhold. A Participant may be required to pay to the Company or any Affiliate, and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a Participant, the amount of any applicable withholding taxes in respect of an Award, its exercise or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Committee or the Company to satisfy all obligations for the payment of such taxes. (ii) Alternative Ways to Satisfy Withholding Liability. Without limiting the generality of Section 10(d)(i), subject to the Committee’s discretion, a Participant may satisfy, in whole or in part, the foregoing withholding liability (A) by delivery of Shares owned by the Participant (which are not subject to any pledge or other security interest) or by delivery of irrevocable instructions to a broker to sell Shares and promptly deliver to the Company the proceeds from the sale of Shares, in each case, with the amount realized equal to the amount required to cover such withholding liability, or (B) by having the Company withhold from the number of Shares otherwise issuable pursuant to the exercise of the Option or SAR, or the lapse of the restrictions on any other Award (in the case of SARs and other Awards, if such SARs and other Awards are settled in Shares), the number of whole Shares necessary to satisfy such withholding liability based on the fair value of such Shares at such time (at up to the minimum required tax withholding rate for the Participant (or permitted transferee) or such other rate that will not cause an adverse accounting consequence or cost, in accordance with Company policy and as authorized by the Committee). C-19 | | Cable One, Inc. ▪ 2022 Proxy Statement |
(e) Section 409A. (i) It is intended that the provisions of the Plan comply with Section 409A of the Code, and all provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. (ii) No Participant or the creditors or beneficiaries of a Participant shall have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under the Plan to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to any Participant or for the benefit of any Participant under the Plan may not be reduced by, or offset against, any amount owing by any such Participant to the Company or any of its Affiliates. (iii) If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (A) such Participant shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (B) the Company shall make a good faith determination that an amount payable pursuant to an Award constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six‑month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not pay such amount on the otherwise scheduled payment date but shall instead pay it on the first business day after such six-month period. Such amount shall be paid without interest, unless otherwise determined by the Committee, in its sole discretion, or as otherwise provided in any applicable employment agreement between the Company and the relevant Participant. (iv) Notwithstanding any provision of the Plan to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to any Award as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on such Participant or for such Participant’s account in connection with an Award (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its Affiliates shall have any obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes or penalties. (f) Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement, which shall be delivered to the Participant and shall specify the terms and conditions of the Award and any rules applicable thereto, including the effect on such Award of the death, disability or termination of employment or service of a Participant and the effect, if any, of such other events as may be determined by the Committee. Cable One, Inc. ▪ 2022 Proxy Statement | | C-20 |
(g) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of options, restricted stock, shares, other types of equity-based awards (subject to stockholder approval if such approval is required) and cash incentive awards, and such arrangements may be either generally applicable or applicable only in specific cases. (h) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained as a director, officer, employee or Consultant of or to the Company or any Affiliate, nor shall it be construed as giving a Participant any rights to continued service on the Board. Further, the Company or an Affiliate may at any time dismiss a Participant from employment or discontinue any directorship or consulting relationship, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. (i) No Rights as Stockholder. No Participant or holder or beneficiary of any Award shall have any rights as a stockholder with respect to any Shares to be distributed under the Plan until he or she has become the holder of such Shares. Except as otherwise provided in Section 5(b), Section 8(c) or the applicable Award Agreement, no adjustments shall be made for dividends or distributions on (whether ordinary or extraordinary, and whether in cash, Shares, or other securities or other property), or other events relating to, Shares subject to an Award for which the record date is prior to the date such Shares are delivered. (j) Governing Law. (i) The validity, construction and effect of the Plan and any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the State of Delaware, without giving effect to the conflict of laws provisions thereof. (k) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be construed or deemed stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. (l) Other Laws; Restrictions on Transfer of Shares. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in its sole and plenary discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary. Without limiting the generality of the foregoing, no Award granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Committee in its sole and plenary discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. Federal and any other applicable securities laws. C-21 | | Cable One, Inc. ▪ 2022 Proxy Statement |
(m) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate, on one hand, and a Participant or any other Person, on the other. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or such Affiliate. (n) Recoupment of Awards. Notwithstanding anything to the contrary contained herein, an Award Agreement may provide that an Award granted thereunder shall be canceled if the Participant, without the consent of the Company, while employed by or providing services to the Company or any Affiliate or after termination of such employment or service, (a) violates a non-competition, non-solicitation or non-disclosure covenant or agreement, (b) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion, or (c) to the extent applicable to the Participant, otherwise violates the Clawback Policy or any other policy adopted by the Company or any of its Affiliates relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to any Participant by the Company or any of its Affiliates as such policy is in effect on the date of grant of the applicable Award or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time. The Committee may also provide in an Award Agreement that (i) a Participant will forfeit any gain realized on the vesting or exercise of such Award if the Participant engages in any activity referred to in the preceding sentence, or (ii) a Participant must repay the gain to the Company realized under a previously paid Award that vests based on the attainment of Performance Goals, Performance Unit or any other Award that vested or was earned with respect to performance objectives if a financial restatement reduces the amount that would have been earned under such Award. Notwithstanding the foregoing, none of the non-disclosure restrictions in this Section 10(n) or in any Award Agreement shall, or shall be interpreted to, impair the Participant from exercising any legally protected whistleblower rights (including under Rule 21F under the Exchange Act). (o) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated. Cable One, Inc. ▪ 2022 Proxy Statement | | C-22 |
(p) Requirement of Consent and Notification of Election Under Section83(b) of the Code or Similar Provision. No election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code) or under a similar provision of law may be made unless expressly permitted by the terms of the applicable Award Agreement or by action of the Committee in writing prior to the making of such election. If an Award recipient, in connection with the acquisition of Shares under the Plan or otherwise, is expressly permitted under the terms of the applicable Award Agreement or by such Committee action to make such an election and the Participant makes the election, the Participant shall notify the Committee of such election within ten days of filing notice of the election with the Internal Revenue Service (or any successor thereto) or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code or any other applicable provision. (q) Requirement of Notification Upon Disqualifying Disposition Under Section421(b) of the Code. If any Participant shall make any disposition of Shares delivered pursuant to the exercise of an Incentive Stock Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions) or any successor provision of the Code, such Participant shall notify the Company of such disposition within ten days of such disposition. (r) Headings and Construction. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Whenever the words “include”, “includes” or “including” are used in the Plan, they shall be deemed to be followed by the words “but not limited to”, and the word “or” shall not be deemed to be exclusive. C-23 | | Cable One, Inc. ▪ 2022 Proxy Statement |
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