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Section 1: PRE 14A (FORM PRE 14A)

cabo20200326_pre14a.htm

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

 

Check the appropriate box:

 

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under § 240.14a-12

 

Cable One, Inc.

(Name of Registrant as Specified in Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

 

 

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

(1)

 Title of each class of securities to which the transaction applies:

 

(2)

 Aggregate number of securities to which the transaction applies:

 

(3)

 Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

(4)

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(5)

 Total fee paid:

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 Amount Previously Paid:

 

(2)

 Form, Schedule or Registration Statement No.:

 

(3)

 Filing Party:

 

(4)

 Date Filed:

 

 

 

PRELIMINARY COPY

 

210 E. Earll Drive

Phoenix, AZ 85012

 

April [●], 2020

 

 

 

Dear Fellow Stockholders:

 

I am pleased to announce the details of the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) of Cable One, Inc. (the “Company”). The Annual Meeting will be held at the Company’s headquarters, 210 East Earll Drive, Phoenix, Arizona, 85012, on Friday, May 15, 2020, at 8:00 a.m., local time. It will also be streamed via a live audio webcast available on our investor relations website at ir.cableone.net or by visiting https://services.choruscall.com/links/cabo200515.html.

 

As we are sensitive to the public health concerns surrounding the coronavirus (COVID-19) crisis and to support the well-being of our associates and stockholders, I urge you to join the webcast rather than attending the Annual Meeting in person this year. We are actively monitoring the pandemic as well as the protocols that Federal, state and local governments may impose. In the event that we are required, or determine it is prudent, to restrict in-person attendance to the Annual Meeting, we will make an announcement as promptly as practicable in advance of the Annual Meeting via a press release that will be posted on our investor relations website and will also be filed with the Securities and Exchange Commission as additional proxy materials.

 

Included with this letter are a Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the Annual Meeting.

 

Your vote is important. As always, we encourage you to vote your shares as soon as possible prior to the Annual Meeting. You may vote over the internet as well as by telephone, or, if you requested to receive printed proxy materials, by returning a proxy card or voting instruction form in the envelope provided.

 

 

Sincerely,

 

/s/ Julia M. Laulis

 

Julia M. Laulis

Chair of the Board, President and

Chief Executive Officer

 

 

 

CABLE ONE, INC.

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

May 15, 2020

 

 

The 2020 Annual Meeting of Stockholders of Cable One, Inc. (the “Company”) will be held at the Company’s headquarters, 210 East Earll Drive, Phoenix, Arizona, 85012, on Friday, May 15, 2020, at 8:00 a.m., local time, for the following purposes:

 

 

1.

To elect three Class II directors to hold office until the 2023 Annual Meeting of Stockholders and until their respective successors are elected and qualified, as more fully described in the accompanying Proxy Statement.

 

 

2.

To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2020.

 

 

3.

To approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers for 2019.

 

 

4.

To approve the Company’s Amended and Restated Certificate of Incorporation, as amended and restated to declassify the Board of Directors to provide for the annual election of directors.

 

 

5.

To transact such other business as may properly come before the meeting or any adjournment thereof.

 

The Board of Directors of the Company has fixed the close of business on March 30, 2020 as the record date for the determination of stockholders entitled to notice of and to vote at the meeting.

 

It is important that your shares be represented and voted at the meeting. Please sign and return your proxy card or voting instruction form at your earliest convenience. You may also vote your shares by telephone or over the internet. If you choose to vote your shares by telephone or over the internet, please follow the instructions in the enclosed Proxy Statement and proxy card or voting instruction form. You may revoke your proxy at any time before it has been voted at the meeting. You may vote in person at the meeting even if you have previously given your proxy. For shares held through a broker, bank or other nominee, you may vote by submitting voting instructions as provided by your broker, bank or other nominee; however, you may not vote such shares in person at the meeting unless you have a proxy executed in your favor by your broker, bank or other nominee.

 

 

By Order of the Board of Directors,

 

/s/ Peter N. Witty

 

Peter N. Witty

Secretary

 

 

Phoenix, Arizona

April [●], 2020

 

 

 

TABLE OF CONTENTS

 

 

PROXY SUMMARY

1

PROXY STATEMENT

6

PROPOSAL 1: ELECTION OF DIRECTORS

10

CORPORATE GOVERNANCE

15

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

21

EXECUTIVE COMPENSATION

23

PROPOSAL 3: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION FOR 2019

47

PROPOSAL 4: APPROVAL OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED AND RESTATED TO DECLASSIFY THE BOARD OF DIRECTORS TO PROVIDE FOR THE ANNUAL ELECTION OF DIRECTORS

48

DIRECTOR COMPENSATION

50

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

52

EQUITY COMPENSATION PLAN INFORMATION

54

REPORT OF THE AUDIT COMMITTEE

55

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

56

STOCKHOLDER PROPOSALS FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS

57

HOUSEHOLDING OF PROXY MATERIALS

57

OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING

57

ANNEX A: USE OF NON-GAAP FINANCIAL MEASURES

A-1

ANNEX B: AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED AND RESTATED

B-1

 

 

 

 

 

 

CABLE ONE, INC.

210 E. Earll Dr.

Phoenix, Arizona 85012

 

PROXY SUMMARY

 

This Proxy Summary highlights information described in more detail elsewhere in this Proxy Statement. It does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.

 

Cable One, Inc. 2020 Annual Meeting of Stockholders (the “Annual Meeting”)

   

Date and Time:

Friday, May 15, 2020, at 8:00 a.m., local time

Place:

Cable One, Inc. Headquarters, 210 East Earll Drive, Phoenix, Arizona, 85012

Webcast:

ir.cableone.net or https://services.choruscall.com/links/cabo200515.html

Record Date:

March 30, 2020

 

Voting Matters and Board Recommendations

 

The Board of Directors (the “Board”) of Cable One, Inc. (the “Company, “we,” “us,” “our” or “Cable One”) unanimously recommends you vote as follows:

 

Proposal

 

Board Recommendation

 

Page for

Additional

Detail

 

1. Election of Directors:

 

The election of three Class II directors named in this Proxy Statement to hold office until the 2023 Annual Meeting of Stockholders and until their respective successors are elected and qualified or as otherwise provided in our Amended and Restated By-laws (“By-laws”)

 

FOR

each nominated director ☑

 

10

 

           

2. Ratification of Appointment of Independent Registered Public Accounting Firm:

 

The ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP (“PwC”) as the independent registered public accounting firm of our Company for the year ending December 31, 2020

 

FOR 

 

21

 

           

3. Advisory Vote to Approve Executive Compensation for 2019:

 

The approval, on a nonbinding advisory basis, of the compensation of our named executive officers (“NEOs”) for 2019 (also referred to as the “say-on-pay” vote)

 

FOR 

 

47

 

           

4. Approval of Amended and Restated Certificate of Incorporation, As Amended and Restated:

 

The approval of our Amended and Restated Certificate of Incorporation, as amended and restated to declassify the board of directors to provide for the annual election of directors

 

FOR 

 

48

 

 

Cable One, Inc. ▪ 2020 Proxy Statement | 1

 

Company Highlights

 

 

We had another year of strong operational and financial performance in 2019.

     
 

Net income was $178.6 million in 2019, an increase of 8.4% year-over-year. Adjusted EBITDA was $569.0 million, an increase of 13.6% year-over-year. See Annex A of this Proxy Statement, entitled “Use of Non-GAAP Financial Measures,” for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable measure under generally accepted accounting principles in the United States (“GAAP”).

     
 

Net cash provided by operating activities was $491.7 million, an increase of 20.6% year-over-year. Adjusted EBITDA less capital expenditures was $306.6 million, an increase of 8.3% year-over-year. See Annex A of this Proxy Statement, entitled “Use of Non-GAAP Financial Measures,” 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.

     
 

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.

     
 

In January 2019, we acquired Clearwave Communications (“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 Communications’ data, video, and voice business (“Fidelity”). Fidelity 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.

 

Governance Highlights

 

 

80% of the Board is independent and 50% of the Board is comprised of female directors following the addition of Mary E. Meduski and Kristine E. Miller to the Board during 2019.

     
 

We are recommending that our stockholders vote to declassify our Board to provide for the annual election of directors.

     
 

We maintain robust executive and non-employee director stock ownership guidelines.

     
 

Our Clawback Policy allows for the forfeiture and recoupment of incentive compensation in the event of financial restatements, legal or compliance violations and various forms of misconduct.

     
 

We prohibit hedging and pledging of our securities by all executives and directors.

     
 

We have a majority voting requirement in uncontested director elections.

     
 

We do not have a stockholder rights plan.

     
 

Every member of our Audit, Compensation and Nominating and Governance Committees are independent under New York Stock Exchange (“NYSE”) listing standards and applicable Securities and Exchange Commission (“SEC”) rules.

 

2 | Cable One, Inc. ▪ 2020 Proxy Statement

 


 

Proposal 1: Election of Directors (page 10)

 

The following tables present certain information, as of March 30, 2020, concerning each nominee for election as a director at, and each director whose term of office will continue after, the Annual Meeting.

 

Class II Director Nominees

Name

  

Age

  

Director

Since

  

Principal Occupation

  

Independent

  

Committee

Memberships

  

Other Public

Company Boards

Mary E. Meduski

 

61

 

2019

 

President and Chief Financial Officer of TierPoint, LLC and Cequel III, LLC

 

 

Audit

 

0

Alan G. Spoon

  

68

  

2015

  

Retired partner at Polaris Partners

  

  

Audit;

Executive

  

4

Wallace R. Weitz

  

70

  

2015

  

Founder of Weitz Investment Management, Inc.

  

  

Compensation; Executive;

Nominating and Governance

  

1

 

 

Class I and III Directors Continuing in Office

Name

  

Age

  

Director

Since

  

Principal Occupation

  

Independent

  

Committee Memberships

  

Other Public Company Boards

Brad D. Brian

  

67

  

2015

  

Chair of the law firm Munger, Tolles & Olson LLP

  

  

Compensation;

Nominating and Governance

  

0

Thomas S. Gayner

  

58

  

2015

  

Co-Chief Executive Officer of Markel Corporation

  

(Lead Independent Director)

  

Executive;

Nominating and Governance

  

4

Deborah J. Kissire

  

62

  

2015

  

Retired Ernst & Young LLP partner

  

  

Audit

  

2

Julia M. Laulis

  

57

  

2017

  

Chair of the Board, President and Chief Executive Officer of Cable One

  

 

  

Executive

  

0*

Thomas O. Might

  

68

  

1995

  

Retired Executive Chairman of Cable One

  

 

  

  

0

Kristine E. Miller

 

56

 

2019

 

Former Senior Vice President, Chief Strategy Officer of eBay

 

 

Compensation

 

0

Katharine B. Weymouth

  

53

  

2015

  

Chief Operating Officer and President of dineXpert

  

  

Audit;

Compensation

  

2

 


* Ms. Laulis was nominated for election as a director of The AES Corporation at its annual meeting of stockholders scheduled on April 23, 2020.

 

Cable One, Inc. ▪ 2020 Proxy Statement | 3


 

Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm (page 21)

 

The following table provides summary information regarding the aggregate fees billed to the Company for professional services rendered by PwC for 2019 and 2018.

 

   

2019

   

2018

 

Audit Fees

  $ 2,675,539     $ 2,017,035  

Audit-Related Fees

    16,000       120,969  

Tax Fees

           

All Other Fees

    4,000       3,000  

Total

  $ 2,695,539     $ 2,141,004  

 

Executive Compensation (page 23)

 

We have a performance-based compensation philosophy, and the key objectives of our executive compensation program are as follows:

 

 

Attract and retain highly qualified and productive executives.

 

 

Motivate executives to enhance our overall performance and profitability through the successful execution of our short- and long-term business strategies, with an emphasis on the long-term.

 

 

Align the long-term interests of our executives and stockholders through meaningful ownership of our stock by executives and by rewarding stockholder value creation.

 

 

Ensure that total compensation opportunities are competitive.

 

The following charts show an overview of the components of 2019 target total direct compensation for our CEO and our other NEOs and the percentage that is at-risk.

 

 

Proposal 3: Advisory Vote to Approve Executive Compensation for 2019 (page 47)

 

We are asking stockholders to approve an advisory resolution on the compensation of our NEOs as reported in this Proxy Statement. Although the say-on-pay vote is advisory and therefore non-binding, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program. At our 2019 Annual Meeting of Stockholders, more than 98% of the votes cast were in favor of our say-on-pay proposal.

 

4 | Cable One, Inc. ▪ 2020 Proxy Statement


 

Proposal 4: Approval of Amended and Restated Certificate of Incorporation, As Amended and Restated (page 48)

 

Upon the unanimous recommendation of the Board, we are asking stockholders to approve amending and restating our Amended and Restated Certificate of Incorporation (the “Charter”) to declassify the Board beginning with the 2021 Annual Meeting of Stockholders. This change would provide for the annual election of all directors phased-in over a three-year period, as described in this proposal.

 

Who Can Vote

 

Stockholders of record as of the close of business on March 30, 2020 (the “Record Date”) may vote at the Annual Meeting. Each of your shares—whether held (i) directly in your name as stockholder of record or (ii) in street name—entitles you to one vote with respect to each proposal to be voted on at the Annual Meeting. However, street name stockholders generally cannot vote their shares directly and instead must instruct the broker, bank or nominee how to vote their shares. 

 

How to Cast Your Vote

 

You can vote using any of the following methods:

 

Over the internet at www.proxyvote.com or scan the QR code on your proxy card or voting instruction form with your mobile device. We encourage you to vote this way.

By toll-free telephone at 1-800-690-6903.

By completing and mailing your proxy card or voting instruction form.

 

By attending the Annual Meeting and voting in person. However, you are encouraged to vote in advance utilizing one of the other methods described above and to join the webcast of the Annual Meeting rather that attending in person. Stockholders of record (that is, if your shares are registered in your name and not in “street name”) will be on a list held by the inspector of elections. Street name stockholders must obtain a proxy executed in their favor from the institution that holds their shares, whether it is their brokerage firm, bank or other nominee, and present it to the inspector of elections in order to vote at the Annual Meeting.

 

Cable One, Inc. ▪ 2020 Proxy Statement | 5


 


 

PROXY STATEMENT

FOR THE 2020 ANNUAL MEETING OF STOCKHOLDERS

MAY 15, 2020

 


 

This Proxy Statement contains information relating to the Annual Meeting of Cable One, or any adjournments thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. The Board is making this proxy solicitation.

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders

to Be Held on May 15, 2020

 

Our Proxy Statement and Annual Report to Stockholders are available at

www.proxyvote.com

 

These proxy solicitation materials, including this Proxy Statement and the accompanying proxy card or voting instruction form, were first distributed and made available on or about April [●], 2020 to all stockholders entitled to vote at the Annual Meeting.

 

Other Questions and Answers

 

Q:

Will any other matters be voted on?

A:

We are not aware of any matters to be voted on other than those referred to in this Proxy Statement. If any other matter is properly brought before the Annual Meeting, Julia M. Laulis and Steven S. Cochran, acting as your proxies, will vote your shares at their discretion.

 

Q:

What else should I know about voting?

A:

If you hold shares in “street name” (that is, your shares are held in a brokerage account by a broker, bank or other nominee, also known as a “beneficial owner”), you should follow the voting instructions provided by your broker, bank or other nominee.

 

If you wish to vote over the internet or by telephone, your vote must be received by 11:59 p.m., Eastern Time, on the day before the Annual Meeting. After that time, internet and telephone voting will not be permitted, and a stockholder of record wishing to vote who has not previously submitted a signed proxy card or voting instruction form must vote in person at the Annual Meeting. Stockholders of record will be on a list held by the inspector of elections. Street name stockholders must obtain a proxy executed in their favor from the institution that holds their shares, whether it is their brokerage firm, bank or other nominee, and present it to the inspector of elections in order to vote at the Annual Meeting. Voting in person by a stockholder at the Annual Meeting will replace any previous votes submitted by proxy.

 

Your shares will be voted as you indicate. If you are a stockholder of record and you sign and return a proxy card but do not indicate your voting preferences, Julia M. Laulis and Steven S. Cochran, acting as your proxies, will vote your shares in accordance with the Board’s recommendations specified in the Proxy Summary under “Voting Matters and Board Recommendations.”

 

Q:

Can I change my vote?

A:

Yes. If you are a stockholder of record, you can change your vote or revoke your proxy at any time before the Annual Meeting:

 

 

By entering a new vote over the internet or by telephone by 11:59 p.m., Eastern Time, on the day before the Annual Meeting;

 

 

By returning a properly signed proxy card with a later date that is received at or prior to the Annual Meeting; or

 

 

By voting in person at the Annual Meeting.

 

6 | Cable One, Inc. ▪ 2020 Proxy Statement


 

  If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your voting instructions in person at the Annual Meeting if you obtain a signed proxy from the record holder (bank, broker or other nominee) giving you the right to vote the shares. Only the latest validly executed proxy that you submit will be counted.
   

Q:

What is a broker non-vote?

A:

If you hold your shares in street name and do not provide voting instructions to your broker, NYSE rules grant your broker discretionary authority to vote your shares on “routine matters” at the Annual Meeting, including for the ratification of PwC as our independent registered public accounting firm for 2020 in Proposal 2. However, the proposals regarding the election of directors, say-on-pay and the amendment and restatement of the Charter are not considered “routine matters.” As a result, if you do not provide voting instructions to your broker, your shares will be voted on Proposal 2 but will not be voted on Proposals 1, 3 and 4 (resulting in a “broker non-vote” with respect to each of those proposals). Although “broker non-votes” will be counted as present for purposes of determining a quorum and will have no effect on Proposals 1 and 3, they will have the same effect as a vote against Proposal 4. Therefore, we urge you to promptly provide voting instructions to your broker or other nominee so that your shares are voted on all proposals.

 

Q:

What vote is required to approve a proposal?

A:

If a quorum is present at the Annual Meeting, the following chart describes the voting requirements for approval and the effect of abstentions and “broker non-votes” on each proposal. Stockholders may cast a “for,” “against” or “abstain” vote with regard to any director nominee or proposal.

 

Proposal

  

Vote Required for Approval

  

Effect of Abstentions

 

Effect of Broker Non-Votes

1. Election of Directors

  

Receipt of a majority of the votes cast at the Annual Meeting, meaning that the number of votes cast “for” a director nominee exceeds the number of votes cast “against” that nominee

  

No effect

  

No effect

2. Ratification of Appointment of Independent Registered Public Accounting Firm

  

Affirmative vote of a majority of the votes cast by the stockholders entitled to vote thereon who are present in person or represented by proxy at the Annual Meeting

  

No effect

  

No effect (brokers have discretion to vote on this proposal)

3. Advisory Vote to Approve Executive Compensation for 2019

  

Affirmative vote of a majority of the votes cast by the stockholders entitled to vote thereon who are present in person or represented by proxy at the Annual Meeting

  

No effect

  

No effect

4. Approval of Amended and Restated Charter

  

Affirmative vote of a majority of the outstanding shares entitled to vote thereon at the Annual Meeting

  

Same effect as a vote against

  

Same effect as a vote against

 

Q:

What happens if a director nominee who is duly nominated does not receive a majority of the votes cast?

A:

In accordance with our By-laws, any incumbent director who fails to receive a majority of the votes cast must submit an offer to resign from the Board no later than two weeks after the Company certifies the voting results. In that case, the remaining members of the Board will consider the resignation offer and may either (i) accept the offer or (ii) reject the offer and seek to address the underlying cause(s) of the majority-against vote. The Board must decide whether to accept or reject the resignation offer within 90 days following the certification of the stockholder vote, and, once the Board makes its decision, the Company must promptly make a public announcement of the Board’s decision (including a statement regarding the reasons for its decision in the event the Board rejects the offer of resignation).

 

Cable One, Inc. ▪ 2020 Proxy Statement | 7


 

Q:

Who will count the vote?

A:

Votes cast in person or by proxy at the meeting will be tabulated by the inspector of elections appointed for the meeting, who will determine whether a quorum is present. The inspector of elections need not be a stockholder, and no director or nominee for the election as a director may be appointed the inspector of elections.

 

Q:

Where can I find the voting results of the Annual Meeting?

A:

We will report the voting results in a Current Report on Form 8-K filed with the SEC within four business days following the Annual Meeting.

 

Q:

Who can attend the Annual Meeting in-person, and can I join the Annual Meeting any other way?

A:

The Annual Meeting will be streamed for stockholders and other interested parties via a live audio webcast available on our investor relations website at ir.cableone.net or by visiting https://services.choruscall.com/links/cabo200515.html.

 

As we are sensitive to the public health concerns surrounding the coronavirus (COVID-19) crisis and to support the well-being of our employees and stockholders, we urge you to join the webcast rather than attending the Annual Meeting in person this year. We are actively monitoring the pandemic as well as the protocols that Federal, state and local governments may impose. Except in the event that we are required, or determine it is prudent, to restrict in-person attendance at the Annual Meeting, all stockholders of record as of the close of business on March 30, 2020 can attend the Annual Meeting. If in-person attendance restrictions are imposed, we will make an announcement as promptly as practicable in advance of the Annual Meeting via a press release that will be posted on our investor relations website and will also be filed with the SEC as additional proxy materials. Street name stockholders may be asked to show proof of ownership in order to be admitted to the Annual Meeting.

 

If you join the live audio webcast, you will not be able to vote nor will your presence be counted for purposes of determining whether a quorum is present at the Annual Meeting. Accordingly, you are encouraged to vote in advance of the Annual Meeting over the internet, by toll-free telephone or by completing and mailing your proxy card or voting instruction form, as indicated above.

 

Q:

What do I need to do to attend the Annual Meeting?

A:

If in-person attendance is permitted, in order to be admitted to the Annual Meeting, you may be asked present proof of ownership of our common stock as of the Record Date. This can be a brokerage statement or letter from a broker, bank or other nominee indicating your ownership as of the Record Date, a proxy card or a legal proxy or voting instruction form provided by your broker, bank or nominee. Any holder of a proxy from a stockholder must present the proxy card, properly executed, and a copy of the proof of ownership. Stockholders and proxyholders may also be asked to present a form of photo identification such as a driver’s license or passport.

 

Seating at the Annual Meeting will be on a first-come, first-served basis upon arrival at the Annual Meeting.

 

Backpacks, cameras, recording equipment and other electronic recording devices will not be permitted inside the Annual Meeting. Failure to follow the Annual Meeting rules or permit inspection will be grounds for exclusion from the Annual Meeting.

 

Q:

Can I bring a guest?

A:

No. In-person attendance at the Annual Meeting is for stockholders only.

 

Q:

What is the quorum requirement of the Annual Meeting?

A:

A majority of the votes entitled to be cast by the outstanding shares of common stock entitled to vote generally on the business properly brought before the Annual Meeting must be present in person or by proxy to constitute a quorum for the Annual Meeting. If you vote, your shares will be part of the quorum. Abstentions and “broker non-votes” will be counted for purposes of determining whether a quorum is present at the Annual Meeting. As of the Record Date, there were 5,725,131 shares of our common stock outstanding and entitled to vote.

 

Q:

Who is soliciting proxies?

A:

Solicitation of proxies is being made by our management on behalf of the Board through the mail, in person, over the internet or by telephone, without any additional compensation being paid to such members of management. The cost of such solicitation will be borne by us. In addition, we have requested brokers and other custodians, nominees and fiduciaries to forward proxy cards and proxy soliciting material to stockholders, and we will pay their fees and reimburse them for their expenses in so doing.

 

8 | Cable One, Inc. ▪ 2020 Proxy Statement


 

Q:

What other information about Cable One is available?

A:

The following information is available:

 

 

We maintain on our investor relations website, ir.cableone.net, copies of our Annual Report on Form 10-K; Annual Report to Stockholders; Corporate Governance Guidelines; Code of Business Conduct and Ethics; charters of the Audit, Compensation, Executive and Nominating and Governance Committees; Policy Statement Regarding Director Nominations and Stockholder Communications (the “Policy Statement”); and other information about the Company.

 

 

In addition, printed copies of these documents will be furnished without charge (except exhibits) to any stockholder upon written request addressed to our Secretary at 210 E. Earll Drive, Phoenix, Arizona, 85012.

 

 

Amendments to, or waivers granted to our directors and executive officers under, the Code of Business Conduct and Ethics, if any, will be posted on our website. 

 

Q:

Can I receive materials relating to the Annual Meeting electronically?

A:

To assist us in reducing costs related to the Annual Meeting, stockholders who vote over the internet may consent to electronic delivery of mailings related to future annual stockholder meetings. We also make our Proxy Statements and Annual Reports available online and may eliminate mailing hard copies of these documents to those stockholders who consent in advance to electronic distribution. If you are voting over the internet, you may consent online at www.proxyvote.com when you vote. If you hold shares in street name, please also refer to information provided by the broker, bank or other nominee for instructions on how to consent to electronic distribution.

 

Cable One, Inc. ▪ 2020 Proxy Statement | 9


 

PROPOSAL 1: ELECTION OF DIRECTORS

 

The Board is divided into three classes, designated Class I, Class II and Class III. Directors are currently elected by class for three-year terms, which continue until the third annual meeting of stockholders following the director’s election and until the director’s successor is elected and qualified. Our Charter and By-laws provide that the number of the directors of the Company will be fixed from time to time by the Board.

 

There are three Class II directors whose term of office expires in 2020. The nominees for election as Class II directors, to serve for a three-year term until the 2023 Annual Meeting of Stockholders and until his or her successor is elected and qualified, are Mary E. Meduski, Alan G. Spoon and Wallace R. Weitz. All nominees are currently directors of the Company. Ms. Meduski, who was recommended by Ms. Laulis and another executive officer, was elected by the Board in July 2019.

 

As discussed in greater detail in Proposal 4 and under “Corporate Governance—Classified Board Structure” below, at the Annual Meeting, we are asking our stockholders to approve amending and restating our Charter to declassify the Board beginning with the 2021 Annual Meeting of Stockholders.

 

The candidates for election have been nominated by the Board based on the recommendation of the Nominating and Governance Committee. In choosing directors and nominees, the Company seeks individuals of the highest personal and professional ethics, integrity, business acumen and commitment to representing the long-term interests of our stockholders and other stakeholders. In respect of its composition, the Board considers the diversity, skills and experience of prospective nominees in the context of the needs of the Board and seeks directors who are “independent” under applicable law and listing standards. Although our Corporate Governance Guidelines and the Policy Statement do not prescribe specific standards regarding Board diversity, the Board considers, as a matter of practice, the diversity of prospective nominees (including incumbent directors), both culturally and in terms of the variety of viewpoints on the Board, which may be enhanced by a mix of different professional and personal backgrounds and experiences. While diversity and the variety of viewpoints, backgrounds and experiences represented on the Board are always considered, the Board believes that a prospective nominee should not be chosen nor excluded solely or principally because of factors such as race, creed, color, religion, national origin, sex/gender, affectional or sexual orientation, or disability.

 

The Board is committed to evaluating diverse candidates for every vacancy, and it will include women and persons of color in each candidate pool from which non-incumbent director nominees are selected, consistent with its past practice. In 2019, after an extensive search that included multiple candidates who were women and persons of color, the Board elected two new female directors.

 

Directors are elected by the affirmative vote of a majority of the votes cast at the Annual Meeting. The Board knows of no reason that would cause any nominee to be unable to act or to refuse to accept his or her nomination or election. In the event that any nominee for election withdraws or for any reason is not able to serve as a director, the individuals acting as your proxies may vote for such other person as the Board may nominate.

 

The following table presents certain information, as of March 30, 2020, concerning each nominee for election as a director at, and each director whose term of office will continue after, the Annual Meeting.

 

Name

  

Age

  

Director

Since

  

Class

  

Position

  

Expiration of

Term as Director

Julia M. Laulis

  

57

  

2017

  

I

  

Chair of the Board, President and Chief Executive Officer

  

2022

Brad D. Brian*

  

67

  

2015

  

I

  

Director

  

2022

Thomas S. Gayner*

  

58

  

2015

  

III

  

Lead Independent Director

  

2021

Deborah J. Kissire*

  

62

  

2015

  

III

  

Director

  

2021

Mary E. Meduski*

 

61

 

2019

 

II

 

Director

 

2020

Thomas O. Might

  

68

  

1995

  

III

  

Director

  

2021

Kristine E. Miller*

 

56

 

2019

 

III

 

Director

 

2021

Alan G. Spoon*

  

68

  

2015

  

II

  

Director

  

2020

Wallace R. Weitz*

  

70

  

2015

  

II

  

Director

  

2020

Katharine B. Weymouth*

  

53

  

2015

  

I

  

Director

  

2022

                     

* Independent Director

 

10 | Cable One, Inc. ▪ 2020 Proxy Statement


 

In addition to the information presented below regarding each nominee’s specific qualifications, skills, attributes and experience that led the Board to conclude that he or she should serve as a director, the Board believes that each nominee has demonstrated established records of accomplishment in areas relevant to our strategy and operations and share characteristics identified in our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the Policy Statement as essential to a well-functioning deliberative body, including honesty, integrity, judgment, acumen, ethics, financial literacy, independence, competence, diligence and commitment to the interests of all stockholders to build long-term stockholder value.

 

All of the directors and nominees have held senior positions as leaders of complex organizations and gained expertise in core management skills, such as strategy and business development, innovation, line operations, brand management, finance, legal, compensation, leadership development, compliance and risk management. They have significant experience in corporate governance and oversight through their positions as senior executives and as directors of public companies and other institutions. These skills and experience are pertinent to our current and evolving business strategies, as well as to the Board’s oversight role, and enable the directors to provide diverse perspectives about the complex issues facing the Company.

 

The following matrix and biographies highlight significant qualifications, skills, attributes and experience of each of our directors who is a nominee for election as a director or whose term of office will continue after the Annual Meeting. The matrix is a summary only; therefore, it does not include all of the qualifications, skills, attributes and experience that each director offers, and the fact that a particular qualification, skill, attribute or experience is not listed does not mean that a director does not possess it.

 

  

  

Data, Video, Voice /

Communications /

Media Industry

Experience

  

Leadership

Experience

  

Governance /

Outside Board

Experience

  

Financial /

Accounting

Expertise

  

Legal

Expertise

  

Diversity

Brad D. Brian

  

  

  

  

  

  

  

  

  

Thomas S. Gayner

  

  

  

  

  

  

  

  

Deborah J. Kissire

  

  

  

  

  

  

  

Julia M. Laulis

  

  

  

  

  

  

  

  

Mary E. Meduski

 

 

 

 

     

Thomas O. Might

  

  

  

  

  

  

  

  

  

Kristine E. Miller

     

 

         

Alan G. Spoon

  

  

  

  

  

  

  

  

Wallace R. Weitz

  

  

  

  

  

  

  

  

  

Katharine B. Weymouth

  

  

  

  

  

  

  

 

Nominees for Election for a Term Expiring at the 2023 Annual Meeting of Stockholders

 

Mary E. Meduski

 

Ms. Meduski has served as President and Chief Financial Officer and a director of TierPoint, LLC, a leading national provider of information technology and data center services, since December 2015. She also serves as President and Chief Financial Officer of Cequel III, LLC, TierPoint’s management company. Prior to joining TierPoint, Ms. Meduski served as Executive Vice President and Chief Financial Officer of Suddenlink Communications from 2006 until 2015. Before joining Suddenlink Communications, Ms. Meduski served as Executive Vice President and Chief Financial Officer of AAT Communications Corp., the largest privately owned wireless tower company in the United States at the time. Prior to joining AAT Communications, she was a Managing Director in the Media and Communications Investment Banking Groups of TD Securities and BankBoston Securities. Ms. Meduski is a member of the Cornell University Board of Trustees.

 

Ms. Meduski brings to the Board her significant leadership, financial, and operating experience in the communications, media, and technology industries.

 

Alan G. Spoon

 

Mr. Spoon served as a partner at Polaris Partners, a private investment firm that provides venture capital to development-stage companies, between May 2000 and December 2018, including as Partner Emeritus from 2015 to 2018 and Managing General Partner from 2000 to 2010. Mr. Spoon was Chief Operating Officer and a director of The Washington Post Company (now named Graham Holdings Company (“GHC”) and our former corporate parent) from March 1991 through May 2000 and served as President of The Washington Post Company from September 1993 through May 2000. Prior to that, he held a wide variety of positions at The Washington Post Company, including President of Newsweek from September 1989 to May 1991. Mr. Spoon began his career at, and later became a partner of, The Boston Consulting Group.

 

Cable One, Inc. ▪ 2020 Proxy Statement | 11


 

Mr. Spoon serves on the boards of Danaher Corporation, Fortive Corporation, IAC/InterActiveCorp and Match Group, Inc. and previously served as a director of Cable One from 1991 to 2000. Additionally, he has served on the boards of Getty Images, TechTarget, Inc., Human Genome Sciences, Ticketmaster and American Management Systems. Previously, Mr. Spoon was a member of the Board of Regents at the Smithsonian Institution (formerly Vice Chairman). He is a member of the MIT Corporation (member of the Executive Committee), where he also serves on the board of edX.org (an online education platform).

 

Mr. Spoon’s public company leadership experience gives him insight into business strategy, leadership and executive compensation; and his public company and private equity experience give him insight into technology trends, acquisition strategy and financing. With more than 18 years of experience at The Washington Post Company, including nine years as a director of Cable One, he also has knowledge of Cable One’s business.

 

Wallace R. Weitz

 

Mr. Weitz founded the investment management firm Weitz Investment Management, Inc. in 1983 as Wallace R. Weitz & Company and has since served in various roles at Weitz Investment Management, including Chief Investment Officer, President and Portfolio Manager. Mr. Weitz manages the Partners III Opportunity Fund and co-manages the Partners Value Fund and Hickory Fund, each of which is managed by Weitz Investment Management. Mr. Weitz has served as a Trustee of the Weitz Funds since 1986. Mr. Weitz began his career in New York as a securities analyst before joining Chiles, Heider & Co. in Omaha, Nebraska in 1973. There, he spent 10 years as an analyst and portfolio manager. Mr. Weitz is on the board of trustees for Carleton College and serves on various other non-profit boards.

 

Mr. Weitz brings to the Board his substantial finance experience as an investor in public companies.

  

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINATED DIRECTORS.

 

Directors Continuing in Office

 

Brad D. Brian

 

Mr. Brian is a national trial lawyer and Chair of the law firm Munger, Tolles & Olson LLP, having practiced there for more than 38 years. A complex civil and criminal litigator, Mr. Brian is a Fellow in the American College of Trial Lawyers and the International Academy of Trial Lawyers. Mr. Brian has represented numerous Fortune 500 corporations in lawsuits and government investigations. This work has included trials, regulatory investigations and internal corporate investigations. He also has defended companies against more than 40 lawsuits filed under the qui tam provisions of the False Claims Act. Mr. Brian is the co-editor of Internal Corporate Investigations (ABA 4th Ed. 2017). Mr. Brian was named a “Litigator of the Year” by The American Lawyer in 2016. He serves on several non-profit boards, including the board of trustees of the UC Berkeley Foundation.

 

Mr. Brian brings to the Board his experience as a litigator and corporate advisor and his understanding of legal matters that may arise at Cable One.

 

Thomas S. Gayner

 

Mr. Gayner has served as Co-Chief Executive Officer of Markel Corporation, a publicly traded financial holding company headquartered in Glen Allen, Virginia, since January 2016 and as a director since August 2016. He also served as President and Chief Investment Officer of Markel Corporation from May 2010 until December 2015 and as a director of Markel Corporation from 1998 to 2003. Since 1990, he has served as President of Markel-Gayner Asset Management Corporation. Previously, he was a certified public accountant at PwC and a Vice President of Davenport & Company LLC in Virginia. Mr. Gayner serves on the boards of Colfax Corporation, GHC and The Davis Series Mutual Funds. He also serves on the board of the Community Foundation of Richmond, a non-profit entity.

 

12 | Cable One, Inc. ▪ 2020 Proxy Statement


 

Mr. Gayner brings to the Board the leadership, management oversight and financial skills gained in his role as a senior manager and director of Markel Corporation as well as other public company boards.

 

Deborah J. Kissire

 

Ms. Kissire retired as a partner of Ernst & Young LLP, an independent registered public accounting firm, in July 2015 after a 36-year career. At the time of her retirement, Ms. Kissire served as Ernst & Young’s Vice Chair and East Central Managing Partner as well as a member of the Americas Executive Board. Ms. Kissire serves on the boards of Axalta Coating Systems Ltd. and Omnicom Group Inc., and she has served on the boards of Goodwill Industries of Greater Washington and Junior Achievement USA.

 

Ms. Kissire brings to the Board her significant experience in public company financial reporting, accounting and internal control matters.

 

Julia M. Laulis

 

Ms. Laulis has been Chair of the Board since January 2018, Chief Executive Officer and a member of the Board since January 2017 and President of Cable One since January 2015.

 

Ms. Laulis joined Cable One in 1999 as Director of Marketing – Northwest Division. In 2001, she was named Vice President of Operations for the Southwest Division. In 2004, she became responsible for starting Cable One’s Phoenix Customer Care Center. In 2008, she was named Chief Operations Officer, and in 2012, she was named Chief Operating Officer. In January 2015, she was promoted to President and Chief Operating Officer.

 

Prior to joining Cable One, Ms. Laulis served in various marketing management positions with Jones Communications. Ms. Laulis began her 35-plus-year career in the cable industry with Hauser Communications.

 

Ms. Laulis serves on the boards of C-SPAN, CableLabs and The Cable Center, and she is a trustee of the C-SPAN Education Foundation. Ms. Laulis was nominated for election as a director of The AES Corporation at its annual meeting of stockholders scheduled on April 23, 2020.

 

In addition to being the Company’s President and Chief Executive Officer, Ms. Laulis brings to the Board her significant operational and leadership experience as well as intimate knowledge and perspective about the strategic and operational opportunities and challenges, economic and industry trends, and competitive and financial positioning of the Company based on her various executive roles at Cable One.

 

Thomas O. Might

 

Mr. Might has been a member of the Board of Cable One since 1995. Prior to his retirement from Cable One in December 2017, Mr. Might served as Executive Chairman in 2017, as Chairman of the Board from 2015 to 2017, as Chief Executive Officer from 1994 to 2016 and as President from 1994 to 2014.

 

Mr. Might joined The Washington Post Company in 1978 as assistant to publisher Donald E. Graham after serving a summer internship at the newspaper in 1977. He was promoted to Vice President-Production in 1982 and served in that position until 1987, when he became Vice President-Production and Marketing. In 1991, Mr. Might was named Vice President-Advertising Sales.

 

In 1993, Mr. Might was promoted to President and Chief Operating Officer of Cable One. He became President and Chief Executive Officer of Cable One in 1994 and was elected to the Board in 1995.

 

Mr. Might was a Combat Engineer Officer in the U.S. Army from 1972 to 1976.

 

Mr. Might brings to the Board leadership and management oversight skills as well as intimate knowledge and perspective about the Company’s history, strategic and operational opportunities and challenges, economic and industry trends, and the competitive and financial positioning of the Company based on his various executive roles at Cable One.

 

Cable One, Inc. ▪ 2020 Proxy Statement | 13


 

Kristine E. Miller

 

Ms. Miller served as Senior Vice President, Chief Strategy Officer for eBay, a global ecommerce marketplace, from September 2014 until February 2020. Prior to joining eBay, Ms. Miller was a Partner and Director at Bain & Company, a global management consulting firm, from 1990 until 2014. At Bain, Ms. Miller served in numerous leadership roles, including Chair of Bain’s Compensation and Promotion Committee. Ms. Miller currently serves on the board of Reflect, a privately held mental health platform, and she has served on the boards of the eBay Foundation, Bain & Company, the California Chamber of Commerce and Junior Achievement of the Bay Area.

 

Ms. Miller brings to the Board her extensive experience, including working with company management and boards, on matters related to strategic leadership, marketing, technology, operations and organizational effectiveness across various industries as well as expertise related to acquisition and integration activities.

 

Katharine B. Weymouth

 

Ms. Weymouth is the Chief Operating Officer and President of dineXpert, a group buying service for independent restaurants that launched in 2018. She was the Chief Executive Officer of Washington Post Media and Publisher of The Washington Post newspaper from February 2008 until October 2014. Ms. Weymouth joined The Washington Post Company in 1996 as Assistant General Counsel of The Washington Post newspaper and held various positions within that organization over the course of 18 years. She held several positions within The Washington Post’s advertising department, including Director of the department’s jobs unit, Director of Advertising Sales and Vice President of Advertising. She also served as Associate Counsel of Washingtonpost.Newsweek Interactive, then the online publishing subsidiary of The Washington Post Company. Ms. Weymouth serves on the boards of GHC and Republic Services, Inc. She also serves as a trustee of the Philip L. Graham Fund and as a director of the Community Foundation for the Greater Capital Region.

 

Ms. Weymouth brings to the Board public company leadership, management oversight and operational expertise gained through her various senior roles with and directorships at public and private companies as well as historical knowledge of our business from her time as a director of GHC.

 

There are no family relationships among any of our directors and executive officers.

 

14 | Cable One, Inc. ▪ 2020 Proxy Statement


 

CORPORATE GOVERNANCE

 

Board Committees and Meeting Attendance

 

The standing committees of the Board consist of the Audit Committee, Compensation Committee, Executive Committee and Nominating and Governance Committee. As discussed in more detail below, each of the Audit, Compensation and Nominating and Governance Committees is comprised entirely of independent directors, consistent with the definition of “independent” under NYSE listing standards applicable to boards of directors generally and board committees in particular.

 

Each committee of the Board operates under a written charter that is maintained on our website, ir.cableone.net/govdocs, and has the authority to hire at the expense of the Company independent legal, accounting, compensation, financial or other advisors as it deems necessary or appropriate.

 

The following table summarizes the current membership of the Board and each of its committees, as well as the number of times the Board and each committee met during 2019.

 

Director

  

Board

  

Audit

Committee

  

Compensation

Committee

  

Executive

Committee

  

Nominating

and

Governance

Committee

Brad D. Brian*

  

  

  

  

  

  

  

Thomas S. Gayner*

  

Lead Independent Director

  

  

  

  

  

Chair

 

Chair

Deborah J. Kissire*

  

  

Chair

  

  

  

  

  

  

Julia M. Laulis

  

Chair

  

  

  

  

  

  

  

Mary E. Meduski*

 

 

           

Thomas O. Might

  

  

  

  

  

  

 

  

  

Kristine E. Miller*

 

     

       

Alan G. Spoon*

  

  

  

 

  

  

  

Wallace R. Weitz*

  

  

  

  

Chair

  

  

Katharine B. Weymouth*

  

  

  

  

  

  

  

Number of Meetings

  

5

  

6

  

4

  

4

  

4

                      

* Independent Director

 

Each director attended at least 75% of the total number of meetings of the Board and the committees of the Board on which the director served during his or her term of service in 2019.

 

Audit Committee

 

The functions of the Audit Committee include, among other duties, overseeing:

 

 

management’s conduct of our financial reporting process (including the development and maintenance of systems of internal accounting and financial controls);

 

 

the integrity of our financial statements;

 

 

our compliance with legal and regulatory requirements;

 

 

the qualifications and independence of our independent registered public accounting firm;

 

 

the performance of our internal audit function;

 

Cable One, Inc. ▪ 2020 Proxy Statement | 15


 

 

the independent registered public accounting firm’s annual audit of our financial statements; and

 

 

the preparation of certain reports required by the rules and regulations of the SEC.

 

The Board has determined that all members of the Audit Committee are non-employee, “financially literate,” “independent” directors within the meaning of the listing standards of the NYSE. None of the members of the Audit Committee has accepted, other than in such person’s capacity as a Board or Board committee member, any consulting, advisory or other compensatory fee from the Company or its affiliates.

 

The Board has determined that each of Mses. Kissire and Meduski and Mr. Spoon has the requisite background and experience to be (and is) designated an “audit committee financial expert” within the meaning of Item 407(d)(5)(ii) of Regulation S-K due to his or her extensive experience, as discussed under “Proposal 1: Election of Directors.” In addition, the Board has determined that all of the members of the Audit Committee are well grounded in financial matters and are familiar with GAAP. All of the members of the Audit Committee have a general understanding of internal controls and procedures for financial reporting, as well as an understanding of audit committee functions. To the extent that matters come before the Audit Committee that involve accounting issues, the members of the Audit Committee consult with and rely on management, in addition to consulting with external experts, such as the Company’s independent registered public accounting firm, PwC. In addition, the Audit Committee has authority to obtain advice from internal or external legal or other advisors.

 

Compensation Committee

 

The functions of the Compensation Committee include, among other duties:

 

 

determining and approving the compensation of our Chief Executive Officer;

 

 

reviewing and approving the compensation of other members of our senior management;

 

 

overseeing the administration and determination of awards under our compensation plans; and

 

 

preparing any report on executive compensation required by the rules and regulations of the SEC.

 

All members of the Compensation Committee are non-employee directors and have been determined to be “independent” within the meaning of the listing standards of the NYSE 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”).

 

Executive Committee

 

The functions of the Executive Committee include, among other duties:

 

 

reviewing and providing guidance to the Board and to senior management of the Company regarding the Company’s strategy, operating plans and operating performance; and

 

 

performing such other duties or responsibilities as may be delegated to the Committee from time to time by the Board.

 

Nominating and Governance Committee

 

The functions of the Nominating and Governance Committee include, among other duties:

 

 

overseeing our corporate governance practices;

 

 

reviewing and recommending to our Board amendments to our By-laws, Charter, committee charters and other governance policies;

 

 

reviewing and making recommendations to our Board regarding the structure of our various board committees;

 

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.

 

All members of the Nominating and Governance Committee are non-employee directors and have been determined to be “independent” within the meaning of the listing standards of the NYSE.

 

Corporate Governance Guidelines and Code of Business Conduct and Ethics

 

In order to help assure the highest levels of business ethics at Cable One, our Board has adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics, which are maintained on our website, ir.cableone.net/govdocs.

 

Corporate Governance Guidelines

 

Our Corporate Governance Guidelines provide a framework for the governance of the Company. Among other things, our Corporate Governance Guidelines address: director qualifications; Board operations, structure and leadership; director compensation; management review and succession; and director orientation and continuing education. The Corporate Governance Guidelines also provide for annual self-evaluations by the Board and its committees.

 

The Board has not established limits on the number of terms a director may serve prior to his or her 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; accuracy of books, records and financial statements; political activities and solicitations; anti-bribery and anti-corruption laws; conflicts of interest and corporate opportunities; employee conduct in the workplace; fairness in business practices; antitrust laws; electronic communications and information security; confidential information; securities trading; government investigations; and accountability for adherence to the Code of Business Conduct and Ethics and prompt internal reporting of any possible violations thereof.

 

Director Nomination Process

 

Under our By-laws, stockholders of record are able to nominate persons for election to our Board only by providing proper notice to our Secretary. Proper notice must be timely, generally between 90 and 120 days prior to the relevant meeting (or, in the case of annual meetings, prior to the first anniversary of the prior year’s annual meeting), and must include, among other information, the name and address of the stockholder giving the notice, a representation that such stockholder is a holder of record of our common stock as of the date of the notice, certain information regarding such stockholder’s beneficial ownership of our securities and any derivative instruments based on or linked to the value of or return on our securities as of the date of the notice, certain information relating to each person whom such stockholder proposes to nominate for election as a director and a representation as to whether such stockholder intends to solicit proxies. In addition, in the event a stockholder of record desires to bring any other business before the meeting, proper notice must include a brief description of such other business the stockholder proposes to bring before the meeting and the reason for conducting such business.

 

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.

 

Majority Voting for Directors

 

Our By-laws provide for majority voting in uncontested director elections, and any incumbent director who fails to receive a majority of the votes cast must submit an offer to resign from the Board no later than two weeks after the Company certifies the voting results. In that case, the remaining members of the Board would consider the resignation offer and may either (i) accept the offer or (ii) reject the offer and seek to address the underlying cause(s) of the majority-against vote. The Board must decide whether to accept or reject the resignation offer within 90 days following the certification of the stockholder vote, and, once the Board makes its decision, the Company must promptly make a public announcement of the Board’s decision (including a statement regarding the reasons for its decision in the event the Board rejects the offer of resignation).

 

Director Independence

 

As set forth in our Corporate Governance Guidelines, the majority of directors must be “independent” according to the criteria for independence established by the NYSE. Our Corporate Governance Guidelines also require that all members of each of the standing committees (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, Ms. Miller, Mr. Spoon, Mr. Weitz and Ms. Weymouth.

 

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, 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 2020 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.

 

Classified Board Structure

 

We currently have a classified Board. As discussed in greater detail in Proposal 4, at the Annual Meeting we are asking our stockholders to approve amending and restating our Charter to declassify the Board beginning with the 2021 Annual Meeting of Stockholders. 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 would have the following effects:

 

 

the nominees elected as Class II directors at the Annual Meeting will be elected for a three-year term;

 

 

the nominees elected at the 2021 Annual Meeting of Stockholders (and at each subsequent annual meeting) will be 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’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 cybersecurity matters; the Compensation Committee addresses the risk profile of the Company’s compensation program and arrangements; and the Nominating and Governance Committee oversees corporate governance-related risk associated with our governance practices and profile.

 

Risk oversight activities are supported by internal reporting structures that aim to surface directly to the Board key matters that can affect the Company’s risk exposures as well as by our leadership structure as described above. The Company has a Disclosure Controls Committee that reports directly to the Audit Committee on certain matters relating to the Company’s public disclosures. The Company also has an enterprise risk management (“ERM”) program designed to identify, assess, prioritize, manage and mitigate major risk exposures that could affect our ability to execute on our corporate strategy and fulfill our business objectives. Our ERM program is administered by a risk council made up of members of our senior management supported by subject matter experts within our organization. Representatives of the risk council report directly to the Audit Committee to establish a mutual understanding with management of the effectiveness of the Company’s risk management practices and capabilities, to review the Company’s risk exposure and tolerance and to elevate certain key risks for oversight at the Board level.

 

Communicating with Directors

 

In accordance with the Policy Statement, stockholders and other interested persons seeking to communicate with the Board may submit any communications in writing to the Company’s 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. All of our directors, except for Mr. Might, attended our 2019 Annual Meeting of Stockholders.

 

Compensation Committee Interlocks and Insider Participation

 

Messrs. Brian and Weitz and Mses. Miller and Weymouth served as members of the Compensation Committee in 2019. None of these individuals has ever been an employee of the Company. During 2019, none of our executive officers served on the board of directors or compensation committee of any other entity for which a member of our Board or Compensation Committee served as an executive officer.

 

Corporate Governance Policies Related to Compensation and Equity

 

Please refer to the section entitled “Compensation Discussion and Analysis—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. 

 

20 | Cable One, Inc. ▪ 2020 Proxy Statement


 

PROPOSAL 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, 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, 2020 and recommends that stockholders vote in favor of the ratification of such appointment. Although ratification is not required by our By‑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, 2019 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 her view, the request or application is consistent with the SEC’s rules on auditor independence.

 

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 2019 and 2018.

 

   

2019

   

2018

 

Audit Fees (1)

  $ 2,675,539     $ 2,017,035  

Audit-Related Fees (2)

    16,000       120,969  

Tax Fees

           

All Other Fees (3)

    4,000       3,000  

Total

  $ 2,695,539     $ 2,141,004  

                             

(1)

Audit fees for 2019 and 2018 related to the annual audit and reviews of financial statements included in the Company’s quarterly filings, including reimbursable expenses. Audit fees for 2019 also related to the review of financial statements and other financial information of Clearwave and Fidelity as well as services related to the new lease accounting standard, Accounting Standards Codification Topic 842 – Leases.

   

(2)

Audit-related fees for 2019 and 2018 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)

All other fees for 2019 and 2018 related to software licensing for finance and accounting research tools provided by PwC.

 

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “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.

 

22 | Cable One, Inc. ▪ 2020 Proxy Statement


 

EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

 

Executive Summary

 

Named Executive Officers

 

This Compensation Discussion and Analysis describes the compensation of our NEOs named in the 2019 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”)

Eric M. Lardy

 

Senior Vice President

Peter N. Witty

 

Senior Vice President, General Counsel and Secretary

 

2019 Highlights

 

We delivered another year of strong operational and financial performance in 2019, which resulted in significant value creation for our stockholders, highlighted by the following actions and metrics.

 

Operational Highlights

 

 

We rebranded 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.

 

 

We continued our work 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.

 

 

We completed virtually all integration activities following our May 2017 acquisition of NewWave by the close of 2019, ahead of our original schedule. We expect to realize additional Adjusted EBITDA growth and margin expansion in those markets as we fully capture the run-rate synergies from the acquisition.

 

 

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.

 

Financial Highlights

 

 

Net income was $178.6 million in 2019, an increase of 8.4% year-over-year.

 

 

Adjusted EBITDA was $569.0 million, an increase of 13.6% year-over-year.

 

 

Net cash provided by operating activities was $491.7 million, an increase of 20.6% year-over-year.

 

 

Adjusted EBITDA less capital expenditures was $306.6 million, an increase of 8.3% year-over-year.

 

 

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. ▪ 2020 Proxy Statement | 23


 

Executive Compensation and Governance “Best Practices”

 

Below is a summary of best practices that we have implemented with respect to the compensation of our NEOs, which we believe support our compensation philosophy and are in the best interests of our Company and our stockholders.

 

 

Our compensation is aligned with a pay-for-performance philosophy where a substantial portion of executive officer compensation is at-risk and tied to objective performance goals.

 

 

Both annual bonuses and the majority of annual equity incentive awards for continuing executives are based on financial operating performance against pre-defined objective goals (with no discretion to increase payouts).

 

 

The Compensation Committee engages an independent compensation consultant.

 

 

We maintain robust executive and non-employee director stock ownership guidelines.

 

 

Our Clawback Policy allows for the forfeiture and recoupment of incentive compensation in the event of financial restatements, legal or compliance violations and various forms of misconduct.

 

 

We prohibit all executives and directors from hedging and pledging our securities.

 

 

The Compensation 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 do not provide gross-up payments on excise taxes under Section 280G of the Code.

 

 

We provide only limited perquisites to our NEOs.

 

 

The Cable One, Inc. 2015 Omnibus Incentive Compensation Plan, as amended and restated (the “2015 Plan”) does not allow for the repricing of options or SARs without stockholder approval.

 

Our Board and the Compensation Committee greatly value the benefits of maintaining a dialogue with our stockholders to understand their views on our executive compensation program and practices. The Compensation Committee considers the outcome of say-on-pay votes and is devoted to consistently reviewing and enhancing our compensation programs. At our 2019 Annual Meeting of Stockholders, more than 98% of the votes cast were in favor of our say-on-pay proposal. After evaluating the outcome of the 2019 say-on-pay vote and based upon input from the Compensation Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), the Compensation Committee determined that our executive compensation program is aligned with our compensation philosophy and our business strategy.

 

Our Executive Compensation Program and Practices

 

The Compensation Committee believes that our executive compensation program is appropriately designed to advance stockholder interests through effective performance-based incentives with retention features. The primary components and associated purposes of our compensation program are as follows:

 

 

Base Salary — Provide the security of a competitive fixed cash payment for services rendered.

 

 

Annual Cash Incentives — Motivate superior annual performance and support our objectives by tying any payout to achievement against pre-established operating goals.

 

24 | Cable One, Inc. ▪ 2020 Proxy Statement


 

 

Long-Term Equity Incentives — Support the retention of executives and align their interests 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 the majority of long-term equity incentives to achievement against pre-established long-term operating goals (through performance-based restricted stock awards (“PSAs”)) or the appreciation of our common stock (through stock appreciation rights (“SARs”)). Newly hired or promoted executives typically receive an initial long-term equity incentive in the form of time-based restricted stock awards (“RSAs”), 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.

 

Under our executive compensation program, performance-based incentive compensation comprises a substantial portion of target annual compensation, and more than 70% of target total compensation for each of our NEOs is at-risk. The Compensation Committee considers each component of compensation collectively with other components when establishing the various forms and levels of compensation for our NEOs. In determining the appropriate mix of compensation elements for each NEO, our compensation program seeks to provide a balance between rewarding performance through annual performance-based cash incentive compensation that encourages achieving and exceeding annual goals and milestones and through long-term equity incentive compensation that is designed to advance our long-term growth strategy and align our NEOs’ interests with those of our stockholders.

 

The following charts show an overview of the components of 2019 target total direct compensation for our CEO and our other NEOs and the percentage that is at-risk.

 

 

Objectives of Our Executive Compensation Program

 

Our performance-based compensation philosophy for executive officers provides incentives to achieve both short- and long-term business objectives, align the interests of our executive officers and long-term stockholders and ensure that we can hire and retain talented individuals in a competitive marketplace.

 

Key objectives of our executive compensation program are as follows:

 

 

Attract and retain highly qualified and productive executives.

 

 

Motivate executives to enhance our overall performance and profitability through the successful execution of our short- and long-term business strategies, with an emphasis on the long-term.

 

 

Align the long-term interests of our executives and stockholders through meaningful ownership of our stock 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 Compensation Committee and the CEO

 

The Board has delegated to the Compensation Committee the responsibility of overseeing the administration of our compensation plans and the preparation of all related reports and documents required by the rules and regulations of the SEC. The Compensation Committee annually reviews and approves the corporate goals and objectives upon which the executive compensation program is based. The Compensation Committee evaluates the CEO’s performance in light of these goals and objectives. Furthermore, the Compensation Committee reviews and makes recommendations to the Board with respect to any incentive compensation plans, including equity-based plans, to be adopted or submitted to our stockholders for approval.

 

The Compensation Committee generally meets at least quarterly throughout the year and may meet more often, as required, to address ongoing events. In 2019, the Compensation Committee met four times. Meeting agendas are determined by the Chair of the Compensation Committee with the assistance of our CEO. Our CEO attended all Compensation Committee meetings held during 2019. At the Compensation Committee meetings, our CEO made recommendations to the Compensation Committee regarding the annual base salary, annual cash incentive compensation and equity compensation of our NEOs (other than our CEO). In general, a representative from the Compensation Committee’s independent compensation consultant, FW Cook, and legal counsel also attends Compensation Committee meetings.

 

Compensation Setting Process

 

The Compensation Committee determined the compensation of each of our NEOs for 2019. Determinations for our CEO were made after consideration of individual and Company performance for the year, along with an examination of external market data of our industry peer group. For our NEOs other than our CEO, the Compensation Committee’s determinations of compensation were based on the recommendations of our CEO, which reflected consideration of individual and Company performance as well as industry peer group practice. In making its executive compensation decisions, the Compensation Committee does not target a specific percentile for pay, but instead examines external market data of our industry peer group (described in the section entitled “Use of Peer Companies” below) as a guide for making its pay decisions with respect to all pay elements. The factors that influence the amount of compensation awarded include market competition for a particular position; an individual’s experience and past performance inside or outside the Company; compensation history, role and responsibilities within the Company; past and future performance objectives; value of the position within the Company; succession planning; the Company’s financial performance; and the relative cost of living in the Phoenix, Arizona market.

 

Independent Compensation Consultant

 

The Compensation Committee has the sole authority to retain and dismiss an independent compensation consultant. In 2019, the Compensation Committee engaged FW Cook, a national executive compensation consulting firm, as its independent consultant. FW Cook reviewed and provided recommendations concerning all of the elements of the Company’s executive compensation programs for 2019. FW Cook performs services solely on behalf of the Compensation Committee and has no relationship with the Company or management except as it may relate to performing such services. The Compensation Committee assessed the independence of FW Cook pursuant to the rules of the SEC and the NYSE and concluded that FW Cook is independent and no conflict of interest exists with respect to the services it provided to the Compensation Committee.

 

Use of Peer Companies

 

In determining our NEOs’ 2019 compensation, the Compensation Committee, with the help of FW Cook, compared each element of compensation to that of a related industry peer group. The peer group was primarily comprised of publicly traded cable, internet and telecommunications companies of similar size and was supplemented by technology companies with broadly comparable gross margins and capital expenditures as a percentage of revenues. At the time of the FW Cook compensation study, across key size metrics, we were generally in a 40th-to-75th percentile range versus our peers. Our trailing four quarter revenues and employee headcount were near the 40th percentile, EBITDA was near the 65th percentile and market capitalization value (current and 12-month average) approximated the 75th percentile.

 

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 of our peer group in 2019: two companies in our industry were added — Altice USA and WideOpenWest; General Communications was acquired by Liberty Interactive, and the combined entity — GCI Liberty — was added as a replacement; and SBA Communications was removed following its conversion into a real estate investment trust. The following chart shows the peer group developed by us for determining our NEOs’ 2019 compensation.

 

2019 NEO Compensation Peer Group

Akamai Technologies

COGECO

Gogo

ViaSat

Altice USA

Cogent Communications

NII Holdings

Vonage Holdings

ATN International

Consolidated Communications

Shenandoah Telecommunications

WideOpenWest

Cincinnati Bell

GCI Liberty

Telephone and Data Systems

Zayo Group Holdings

 

In determining the structure of our 2019 executive compensation program, as well as the individual pay levels of our NEOs, the Compensation Committee reviewed competitive market data provided by FW Cook, which 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.

 

Elements of Our Compensation Program

 

Base Salary

 

The Compensation Committee reviews executive officer base salaries each year (or otherwise at the time of a new hire or promotion) and makes any adjustments it deems necessary. In setting annual base salary levels, the Compensation Committee takes into account competitive considerations, changes in responsibilities, individual performance, tenure in position, internal pay equity, Company performance, market data for individuals in similar positions, retention, relative cost of living and advice from our independent compensation consultant. The Compensation Committee gives no specific weighting to any one factor in setting the level of base salary and the process ultimately relies on the subjective exercise of the Compensation Committee’s judgment.

 

As part of the annual review process, Mr. 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 2019 base salary amounts as reported in the 2019 Summary Compensation Table, annualized 2018 base salary amounts and the dollar and percent change from 2018 base salary amounts for all NEOs.

 

Name

 

2019 Base Salary

 

Annualized 2018 Base Salary

 

$ Change

 

% Change

Julia M. Laulis

 

$575,000

 

$575,000

 

 

Michael E. Bowker

 

$360,000

 

$360,000

 

 

Steven S. Cochran

 

$325,000

 

$325,000

 

 

Eric M. Lardy

 

$253,000

 

$220,000

 

$33,000

 

15.0%

Peter N. Witty

 

$315,000

 

$315,000

 

 

 

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, expressed as a percentage of such executive’s base salary, pursuant to the 2019 Bonus Plan. The 2019 Bonus Plan provided for payouts based on our financial performance compared to goals set immediately prior to the beginning of 2019. 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 2018 for all NEOs.

 

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%

 

Payouts are capped at 200% of target, and the Compensation Committee retains negative 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 2019 Bonus Plan were subject to the attainment of goals related to Adjusted EBITDA growth and adjusted capital expenditures as a percentage of total revenues. In order to determine Adjusted EBITDA, we begin with our net income (as defined under GAAP and described in our 2019 Annual Report on Form 10-K, filed on February 28, 2020 (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 2019 Bonus Plan, the Compensation Committee adjusted the calculation of Adjusted EBITDA growth and capital expenditures as a percentage of total revenues pursuant to a pre-established list of adjustments, which in 2019 related to acquired businesses or assets (i.e., Clearwave, Fidelity and NewWave operations, as applicable) and designated fiber expansion projects, as summarized in the charts showing our performance results under the 2019 Bonus Plan below.

 

We believe that the combination of Adjusted EBITDA growth and adjusted capital expenditures as a percentage of total revenues reflect our performance across several key dimensions, including profitability, cash outflows for capital expenditures and our ability to fund operations and make additional investments with internally generated funds. As such, performance on these measures was the basis for determining earned bonuses under the 2019 Bonus Plan, using the following table (with any values between points on the table determined based on linear interpolation):

 

 

2019 Adjusted EBITDA growth over 2018 Adjusted EBITDA (subject to adjustment as provided above, to the extent applicable); and

 

 

2019 adjusted capital expenditures as a percentage of total revenues (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%

 

 

    = Range including actual 2019 performance factor.

 

28 | Cable One, Inc. ▪ 2020 Proxy Statement


 

On March 6, 2020, the Compensation Committee certified the results of the performance goals and approved a performance factor of 144.1% for the 2019 Bonus Plan based on Adjusted EBITDA growth of 6.8% and adjusted capital expenditures as a percentage of total revenues of 18.2%. The Compensation Committee applied the following pre-established adjustments described above to the performance results under the 2019 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 %

                

Note: All totals were calculated using exact values. Minor differences may exist due to rounding.

(1)

Publicly reported amounts for 2019 include Clearwave and Fidelity operations for the periods beginning January 8, 2019 and October 1, 2019, respectively, the dates on which each was acquired.

   
  The Compensation Committee approved the following bonus payments under the 2019 Bonus Plan based on the 2019 performance results and performance factor for our NEOs:

 

Name

 

Target Bonus

Percentage

 

Target

Bonus

 

Performance Factor

(as a Percentage of Target)

 

Bonus Payout

Julia M. Laulis

 

100%

 

$575,000

 

144.1%

 

$828,459

Michael E. Bowker

 

75%

 

$270,000

 

144.1%

 

$389,015

Steven S. Cochran

 

70%

 

$227,500

 

144.1%

 

$327,782

Eric M. Lardy

 

50%

 

$126,500

 

144.1%

 

$182,261

Peter N. Witty

 

50%

 

$157,500

 

144.1%

 

$226,926

 

Long-Term Annual Equity Incentive

 

The Compensation Committee considers its long-term equity incentive program to be a critical component of the executive officer compensation program as it motivates and rewards executive officers over the long-term and further aligns the interests of our executives with those of our stockholders. Our historical practice is to grant our annual equity awards in the form of PSAs in early January each year. In addition, the Compensation Committee approves 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. Equity grants to our NEOs are described in greater detail in the 2019 Grants of Plan-Based Awards and the Outstanding Equity Awards at Fiscal Year-End tables beginning on pages 39 and 40, respectively, of this Proxy Statement.

 

2019 PSA Grants

 

For 2019, the Compensation Committee granted our NEOs PSAs under the 2015 Plan. The PSAs granted in 2019 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 revenues as bonuses under the 2019 Bonus Plan because the Compensation Committee viewed these metrics as key indicators of our performance, as further described in the section entitled “Annual Cash Incentive Program” above. The decision to use the same performance measures for the annual cash bonus plan and PSAs was based on: (1) the belief that these metrics are the best 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 Clearwave and Fidelity in 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


 

Ms. Laulis received a 2019 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 taking 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). 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 2019 are scheduled to cliff-vest on January 3, 2022, generally subject to continued service with the Company through such date.

 

On March 6, 2020, the Compensation Committee certified the results of the performance goals and approved a performance factor of 144.1% for the 2019 PSA grants based on Adjusted EBITDA growth of 6.8% and adjusted capital expenditures as a percentage of total revenues of 18.2%. The Compensation Committee applied the pre-established adjustments described in the section entitled “Annual Cash Incentive Program” above to the performance results for the 2019 PSAs. The Compensation Committee approved the following 2019 PSA performance results and performance factor for our 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)

Julia M. Laulis

 

$580,551

 

715

 

1,430

 

144.1%

 

1,030

Michael E. Bowker

 

$181,879

 

224

 

448

 

144.1%

 

322

Steven S. Cochran

 

$164,016

 

202

 

404

 

144.1%

 

291

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)

Earned PSAs are subject to service-based vesting conditions through January 3, 2022.

 

2019 RSA Grants

 

For 2019, the Compensation Committee approved RSA grants of 350 shares to Ms. Laulis and 200 shares each to Messrs. Bowker, Cochran, Lardy and Witty, which vest in equal annual installments over four years. The grant date fair value of each RSA grant (computed in accordance with Topic 718) was as follows: Ms. Laulis, $284,186, and Messrs. Bowker, Cochran, Lardy and Witty, $162,392. These grants were awarded in order to recognize strong individual performance and encourage retention.

 

2019 SAR Grants

 

For 2019, the Compensation Committee approved grants of 2,000 SARs to Ms. Laulis and 1,500 SARs each to Messrs. Bowker, Cochran, Lardy and Witty in order to recognize strong individual performance, encourage retention and support alignment with long-term stockholder interests. The 2019 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’s continued employment with us through the applicable vesting date). The grant date fair value of each SAR grant (computed in accordance with Topic 718) was as follows: Ms. Laulis, $382,840, and Messrs. Bowker, Cochran, Lardy and Witty, $287,132.

 

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.

 

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 “Retirement Benefits.”

 

Cable One, Inc. ▪ 2020 Proxy Statement | 31


 

Perquisites

 

We provide our NEOs with very limited perquisites. In 2019, we paid certain costs in connection with Ms. Laulis’ spouse’s travel to and participation in a sales incentive trip and an industry conference and we 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, 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 2019 Summary Compensation Table on page 37 of this Proxy Statement. We did not provide any other perquisites to our NEOs.

 

Severance Benefits

 

Consistent with our policy, we have not entered into any employment or severance agreements that provide for payments or benefits in the event of involuntary termination with any of our NEOs. As such, we do not have any agreements with any of our NEOs that provide cash payments upon a termination of employment or a change of control of the Company (except for the Cable One, Inc. Supplemental Executive Retirement Plan (the “Cable One SERP”) described below in the “Retirement Benefits” section beginning on page 41 of this Proxy Statement).

 

We do not provide any “single trigger” change of control benefits nor any gross-up payments on excise taxes under Section 280G of the Code. In order to encourage continuity of the executive officers in the event of a change of control and promote the successful execution of the Company’s short- and long-term business strategies, our outstanding equity awards contain a “double trigger” provision, which means the awards only vest upon a qualifying termination of employment that occurs within 18 months following a change of control, as described below in the “Potential Payments Upon Termination or Change of Control” section beginning on page 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 ($280,000 in 2019). Employees, including our NEOs, are eligible to receive matching contributions after one year of service, with matches fully vested when made.

 

Nonqualified Supplemental Executive Retirement Plan and Nonqualified Deferred Compensation Plans

 

We maintain a nonqualified supplemental executive retirement plan and a nonqualified deferred compensation plan. Contributions to or deferrals under these plans were not permitted after December 31, 2015.

 

Explanation and discussion of these frozen retirement plans can be found in the narratives accompanying the Pension Benefits and Nonqualified Deferred Compensation tables beginning on pages 42 and 43, respectively, of this Proxy Statement.

 

2020 Compensation Actions

 

2020 Base Salaries

 

As part of the annual review process, effective January 1, 2020, our NEOs received the base salary increases indicated in the table below based on individual and Company performance and to address shortfalls compared to competitive market salary levels. Ms. Laulis and Mr. Bowker 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

 

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 2020 base salary excluding the impact of the extra pay period.

 

2020 Annual Executive Bonus Plan

 

At the end of 2019, the Compensation Committee approved the 2020 Annual Executive Bonus Plan (the “2020 Bonus Plan”). Consistent with the 2019 Bonus Plan, each of our NEOs was awarded a cash incentive opportunity at the beginning of 2020 that provides for payouts based on our financial performance compared to goals set immediately prior to the beginning of 2020, with the 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% to 75% of base salary based on individual performance and to more closely align him with competitive market compensation levels. Bonus payouts under the 2020 Bonus Plan remain subject to the attainment of goals related to year-over-year Adjusted EBITDA growth and adjusted capital expenditures as a percentage of total revenues for 2020, each subject to certain pre-established adjustments as provided in the 2020 Bonus Plan.

 

2020 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, the Compensation Committee approved PSA and RSA grants to the NEOs with target grant date fair values as follows:

 

2020 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

Julia M. Laulis

 

$1,000,025

 

652

 

$500,012

 

326

Michael E. Bowker

 

$400,317

 

261

 

$250,006

 

163

Steven S. Cochran

 

$400,317

 

261

 

$250,006

 

163

Eric M. Lardy

 

$300,621

 

196

 

$250,006

 

163

Peter N. Witty

 

$300,621

 

196

 

$199,391

 

130

                

(1)

Amounts in this column represent the grant date fair value of the awards computed in accordance with Topic 718.

 

The PSAs are scheduled to cliff-vest on January 3, 2023 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 revenues as bonuses under the 2020 Bonus Plan described above. The maximum number of PSAs granted remains 200% of target.

 

Cable One, Inc. ▪ 2020 Proxy Statement | 33


 

Corporate Governance Policies

 

Stock Ownership Guidelines

 

The Board has adopted stock ownership guidelines applicable to our executives, including our NEOs, and our non-employee directors because we believe executives and directors will more effectively pursue the long-term interests of stockholders if they are stockholders themselves.

 

These guidelines generally require executives to hold shares of our common stock having a value equal to a multiple of the executives’ base salary and non-employee directors to hold shares of our common stock having a value equal to a multiple of the non-employee directors’ base cash retainer. RSAs, PSAs (only to the extent earned after the date the Compensation Committee certifies the achievement of the applicable performance goals) and fully owned shares all count towards the guidelines for executives and unvested and deferred restricted stock units (“RSUs”) count towards the guidelines for non-employee directors. SARs are not counted toward compliance with the guidelines nor are unearned PSAs. An executive or non-employee director is expected to achieve the applicable multiple set forth in the guidelines within five years of the later of the date of initial adoption of the guidelines, which was August 4, 2015, or the date of the executive’s initial election to such position or the non-employee director’s initial election to the Board, except as otherwise approved by the Compensation Committee (the “Compliance Period”). Compliance with these stock ownership guidelines is reviewed annually, and all of our NEOs and non-employee directors were in compliance with the stock ownership guidelines as of December 31, 2019. 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’s securities and prohibits them from (1) trading derivative securities, such as puts, calls, options and similar instruments; (2) entering into hedging or monetization transactions or similar arrangements, such as collars and forward-sale contracts; (3) engaging in short sale transactions in the Company’s securities; and (4) buying the Company’s 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 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 / 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).

  

The Board may seek recoupment in any manner it chooses to the extent permitted by law, including reducing current or future incentive compensation awards (except in violation of Section 409A of the Code); requiring reimbursement or repayment of cash-based incentive compensation awards paid (within the previous three-year period); cancelling all or a portion of unvested equity awards, vested equity awards (within the previous three-year period) and any dividends accrued or paid in respect of such equity awards; requiring the return of certain net shares and dividends paid from vested, exercised, settled and sold equity awards (within the previous three-year period); and any other method of reducing the total compensation granted, paid or otherwise provided (within the previous three-year period or any current or future period). For purposes of the policy, incentive compensation includes but is not limited to annual and discretionary bonuses, PSAs, RSAs and SARs.

 

Policy with Respect to Tax Deductibility of Compensation

 

As part of its role, the Compensation Committee considers the deductibility of executive compensation under Section 162(m) of the Code. Section 162(m), as in effect prior to 2018, provided that we could not deduct compensation of more than $1.0 million paid in any year to the CEO or any of the three other most highly compensated officers (excluding the CFO), unless the compensation qualified as “performance-based compensation” under Section 162(m). The 2017 Federal tax reform legislation, which was signed into law in December 2017, eliminated the exception for “performance-based compensation” with respect to 2018 and future years. As a result, we expect that, except to the extent that compensation is eligible for limited transition relief applicable to binding contracts in effect on November 2, 2017, compensation over $1.0 million per year paid to any NEO (and any person who was a named executive for any year beginning with 2017) will be nondeductible under Section 162(m).

 

Compensation Program Risk Assessment

 

As part of its oversight role, the Compensation Committee considers the impact of our compensation program, policies and practices (both at the executive and below-executive levels), on the Company’s overall risk profile. Specifically, the Compensation Committee, with assistance from our CEO, reviews the compensation plans, incentive plan design, incentive payouts and factors that may affect the likelihood of excessive risk taking to determine whether they present a significant risk to the Company. We believe that our compensation program provides an effective balance in cash and equity mix and short- and longer-term performance periods, and also allows for the Compensation Committee’s application of discretion to override formulaic results. The Company also maintains policies to mitigate compensation-related risk such as stock ownership guidelines, caps on incentive payouts, vesting periods on equity, the Clawback Policy and insider-trading prohibitions as well as independent Compensation Committee oversight. Based on this review, the Compensation Committee determined that the risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

 

Cable One, Inc. ▪ 2020 Proxy Statement | 35


 

Compensation Committee Report

 

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with management. Based on its review and discussion with management, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the 2019 Form 10-K.

 

Wallace R. Weitz, Chairman

Brad D. Brian

Kristine E. Miller

Katharine B. Weymouth

 

 

36 | Cable One, Inc. ▪ 2020 Proxy Statement


 

2019 Summary Compensation Table

 

The following table shows the compensation paid by the Company during 2019, 2018 and 2017 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, 2019 based on 2019 total compensation (except in the cases of Messrs. Cochran, Lardy and Witty, who were NEOs in 2019 and 2018 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

                         

(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 14 of the Notes to the Consolidated Financial Statements contained in our 2019 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 2019 as follows:

 

Name

 

Stock Awards –

Grant Date Fair Value of PSAs

   

Stock Awards –

Grant Date Fair Value of RSAs

   

Total

 

Julia M. Laulis

  $ 580,551     $ 284,186     $ 864,737  

Michael E. Bowker

  $ 181,879     $ 162,392     $ 344,271  

Steven S. Cochran

  $ 164,016     $ 162,392     $ 326,408  

Eric M. Lardy

  $ 127,478     $ 162,392     $ 289,870  

Peter N. Witty

  $ 159,144     $ 162,392     $ 321,536  

 

Cable One, Inc. ▪ 2020 Proxy Statement | 37


 

 

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

 

Julia M. Laulis

 

$

1,161,103

 

Michael E. Bowker

 

$

363,758

 

Steven S. Cochran

 

$

328,032

 

Eric M. Lardy

 

$

254,955

 

Peter N. Witty

 

$

318,288

 

 

(2)

Amounts in this column for 2019, 2018 and 2017 represent payments under our bonus plan for each year. The 2019 Bonus Plan is described in further detail in the section entitled “Compensation Discussion and Analysis—Elements of Our Compensation Program—Annual Cash Incentive Program” above.

 

(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 were determined using 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.

 

See the Pension Benefits table and the “Retirement Benefits” section below for additional information regarding these benefits.

 

(4)

For 2019, the amounts presented consist of the following: 

 

All Other Compensation

 

Name

 

Perquisites (4a)

 

 

401(k) Company Contributions (4b)

 

 

PSA Dividends (4c)

 

 

Total

 

Julia M. Laulis

 

$

10,236

 

 

$

12,163

 

 

$

8,663

 

 

$

31,062

 

Michael E. Bowker

 

$

12,600

 

 

$

13,923

 

 

$

2,517

 

 

$

29,040

 

Steven S. Cochran

 

 

 

 

$

4,050

 

 

$

757

 

 

$

4,807

 

Eric M. Lardy

 

 

 

 

$

4,328

 

 

$

1,693

 

 

$

6,021

 

Peter N. Witty

 

 

 

 

$

9,800

 

 

$

731

 

 

$

10,531

 

                          

(4a)

Amounts in this column represents (i) 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) reimbursement to Ms. Laulis for an amount representing part of the cost of our 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.

 

(4b)

NEOs are immediately 100% vested in 401(k) Company contributions.

 

(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 2019 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.

 

38 | Cable One, Inc. ▪ 2020 Proxy Statement


 

2019 Grants of Plan-Based Awards

 

The following table shows information with respect to each plan-based award granted to our NEOs during 2019.

 

 

 

 

 

 

 

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

 

Name

 

Grant Date

 

Approval

Date (1)

 

Threshold
($)

 

Target
($)

 

Maximum
($)

 

Threshold
(#)

 

Target
(#)

 

Maximum
(#)

 

or Units (4)
(#)

 

Options (5)
(#)

 

Awards
($/Sh)

 

Option

Awards (6)

 

Julia M.

 

 

 

 

 

$

575,000

 

$

1,150,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Laulis

 

01/03/2019

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

715

 

 

1,430

 

 

 

 

 

 

$

580,551

 

   

01/03/2019

 

12/31/2018

   

 

 

 

 

 

 

   

   

   

350

 

 

 

 

$

284,186

 
   

01/03/2019

 

12/31/2018

   

 

 

 

 

 

 

   

   

   

 

468

 

$

811.96

 

$

382,840

 

Michael E.

 

 

 

 

 

$

270,000

 

$

540,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bowker

 

01/03/2019

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

224

 

 

448

 

 

 

 

 

 

$

181,879

 
   

01/03/2019

 

12/31/2018

   

   

   

   

   

   

   

200

 

   

 

$

162,392

 
   

01/03/2019

 

12/31/2018

   

 

 

 

 

 

 

   

   

   

 

352

 

$

811.96

 

$

287,132

 

Steven S.

 

 

 

 

 

$

227,500

 

$

455,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cochran

 

01/03/2019

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

202

 

 

404

 

 

 

 

 

 

$

164,016

 

   

01/03/2019

 

12/31/2018

   

 

 

 

 

 

 

   

   

   

200

 

   

 

$

162,392

 
   

01/03/2019

 

12/31/2018

   

 

 

 

 

 

 

   

   

   

 

352

 

811.96

 

$

287,132

 

Eric M.

 

 

 

 

 

$

126,500

 

$

253,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lardy

 

01/03/2019

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

157

 

 

314

 

 

 

 

 

 

$

127,478

 

 

 

01/03/2019

 

12/31/2018

 

 

 

 

 

 

 

 

 

 

   

 

 

200

 

 

 

 

$

162,392

 

   

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 Compensation Committee took action to approve the equity-based award.

 

(2)

Amounts in these columns represent the target and maximum payouts for the NEOs under the 2019 Bonus Plan. There is no threshold payout with respect to these awards under the 2019 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 2019 were earned at 144.1% 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, generally subject to continued service with the Company through such date. The terms of the PSAs are described in further detail in the section entitled “Compensation Discussion and Analysis—Elements of Our Compensation Program—Long-Term Annual Equity Incentive” above.

 

(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 entitled “Compensation Discussion and Analysis—Elements of Our Compensation Program—Long-Term Annual Equity Incentive” above.

 

(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) and the grant date closing stock price as reported by the NYSE ($811.96). 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 Compensation Committee.

 

(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 14 of the Notes to the Consolidated Financial Statements contained in the 2019 Form 10-K for a discussion of the assumptions used in the valuation of the SAR awards.

 

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.

 

 

 

 

 

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