COMM DEF 14A Report ended May 4, 2018

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Preliminary Proxy Statement.

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

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Definitive Proxy Statement.

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Definitive Additional Materials.

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Soliciting Material Pursuant to §240.14a-12.

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No fee required.

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

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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.

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Date Filed:

Sincerely,

Marvin S. Edwards, Jr.

President and Chief Executive Officer

Time and Date:

1:00 p.m., local time, on Friday, May 4, 2018

Place:

JPMorgan Chase

383 Madison Avenue

New York, NY 10017

Who Can Vote:

Only holders of our common stock at the close of business on March 6, 2018 will be entitled to receive notice of, and to vote at, the Annual Meeting.

Annual Report:

Our 2017 Annual Report to Stockholders accompanies but is not part of these proxy materials.

Proxy Voting:

Your Vote is Important . Please vote your shares at your earliest convenience. This will ensure the presence of a quorum at the meeting. Promptly voting your shares via the Internet, by telephone, or, if you request printed copies of the proxy materials by mail, by signing, dating and returning the enclosed proxy card or voting instruction form will save the expenses and extra work of additional solicitation. If you request printed copies of the proxy materials by mail and you wish to vote by mail, we have enclosed an envelope, postage prepaid if mailed in the United States. Submitting your proxy now will not prevent you from voting your shares at the meeting, as your proxy is revocable at your option. You may revoke your proxy at any time before it is voted by delivering to the Company a subsequently executed proxy or a written notice of revocation or by voting in person at the Annual Meeting.

Items of Business:

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To elect three Class II directors for terms ending at the 2021 Annual Meeting of Stockholders;

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To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2018;

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To approve, on a non-binding advisory basis, the compensation paid to our named executive officers; and

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To transact any other business that may properly come before the Annual Meeting.

Date of Mailing:

A Notice of Internet Availability of Proxy Materials or this Proxy Statement are first being mailed to stockholders on or about March 20, 2018.

BY ORDER OF THE BOARD OF DIRECTORS,

Sincerely,

Frank B. Wyatt, II

Secretary

March 20, 2018

PROXY SUMMARY

1

AUDIT MATTERS

32

PROXY STATEMENT

6

PROPOSAL No. 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

32

Questions and Answers About the Annual Meeting and Voting

6

Audit Committee Report

34

CORPORATE GOVERNANCE MATTERS AND COMMITTEES OF THE BOARD OF DIRECTORS

11

EXECUTIVE COMPENSATION

36

PROPOSAL NO. 3: ADVISORY VOTE ON EXECUTIVE COMPENSATION

36

PROPOSAL No. 1: ELECTION OF DIRECTORS

11

Compensation Discussion and Analysis

37

Policies on Corporate Governance

17

Key 2017 Financial Performance Highlights

38

Board Leadership Structure

17

Executive Compensation Objectives and Elements

39

The Board’s Role in Management’s Succession Planning

17

2017 Compensation Analysis

41

Employment, Severance and Change in Control Arrangements

47

The Board’s Role in Risk Oversight

18

Director Independence

18

Hedging and Pledging Policies

47

Nominations for Directors

18

Stock Ownership Guidelines

48

Director Qualifications

19

Summary Compensation Table for 2017

49

Board Composition

19

Grants of Plan-Based Awards in 2017

50

Board and Committee Evaluations

20

Narrative Supplement to Summary Compensation Table for 2017 and Grants of Plan-Based Awards in 2017 Table

50

Stockholder Communications with Board of Directors

Directors

20

Board Meetings, Attendance and Executive Sessions

20

Outstanding Equity Awards at December 31, 2017

51

Board Committees

20

Option Exercises and Stock Vested for 2017

52

Compensation Committee Interlocks and Insider

22

Nonqualified Deferred Compensation for 2017

52

Participation

Nonqualified Deferred Compensation

53

Director Compensation

22

Potential Payments upon Termination or Change in Control

54

Director Compensation Table for 2017

23

Director Stock Vested for 2017

24

Compensation-Related Risk Assessment

60

CEO Pay Ratio

60

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

25

Equity Compensation Plan Information

61

Compensation Committee Report

62

Indemnification Agreements

26

OTHER INFORMATION

63

Employment Agreements

26

EXECUTIVE OFFICERS

27

Stockholder Proposals for the Company’s 2019 Annual Meeting

63

Available Information

64

BENEFICIAL OWNERSHIP

29

Incorporation by Reference

65

Notice of Internet Availability of Proxy Materials

66

Beneficial Ownership of our Common Stock

29

ANNEX A – RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

A-1

Section 16(a) Beneficial Ownership Reporting Compliance

31

Date and Time:

Friday, May 4, 2018

1:00 pm, local time

Place:

JPMorgan Chase

383 Madison Avenue

New York, NY 10017

Record Date:

March 6, 2018

Board’s

Recommendation

Page Reference

(for more detail)

Item 1.

To elect three Class II directors for terms ending at the 2021 Annual Meeting of Stockholders

✓

FOR Each

Nominee

11

Item 2.

To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2018

✓

FOR

32

Item 3.

To approve, on a non-binding advisory basis, the compensation paid to our named executive officers

✓

FOR

36

Internet at

calling 1-800-PROXIES

mail

www.voteproxy.com

toll-free from the

return the signed

U.S. or Canada

proxy card

2018 Proxy Statement

1

Name

Age

Director Since

Professional Background

Independent

Committee Memberships

Board Service

Austin A. Adams

74

2014

Former: Executive VP and Corporate CIO, JPMorgan Chase; CIO, First Union Corporation

Yes

Audit

Current: KeyCorp, Enbridge Inc.

Former: The Dun & Bradstreet Corporation, Community One Bancorp, and First Niagara Financial Group, Inc.

Stephen (Steve) C. Gray

59

2011

Former: President and CEO, Syniverse Holdings, Inc.; Senior Advisor, The Carlyle Group; Founder and Chairman, Gray Venture Partners, LLC; President, McLeodUSA Inc.; VP of Business Services, MCI Inc.; Senior VP of National Accounts and Carrier Services, TelecomUSA; Sales management, WilTel Network Services and Clayton W. Williams Companies

Yes

Compensation

Current: ImOn Communications, LLC, SecurityCoverage, Inc., Involta, LLC, HH Ventures, LLC, and Syniverse Holdings, Inc.

Former: Insight Communications, Inc.

L. William (Bill) Krause

75

2011

Current: President, LWK Ventures; Senior Advisor, The Carlyle Group; Board Partner, Andreessen Horowitz

Former: Chairman, President and CEO, 3Com Corporation

Yes

Compensation

Nominating and Corporate Governance

Current: Coherent, Inc., Veritas Holding, Ltd.

Former:  Brocade Communications Systems, Inc., Core-Mark Holding Company, Inc., Sybase, Inc.

2018 Proxy Statement

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Achieved a gold rating from EcoVadis (a leading provider of sustainability ratings for global supply chains), the highest CSR rating available for sustainable procurement, ethical and responsible business practices, and environmental management.

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Reduced greenhouse gas emissions by 77% over the 2008 baseline levels (exceeding our 2020 reduction goal of 65%). We voluntarily report greenhouse gas emissions in our public filings and to the CDP (formerly the Carbon Disclosure Project).

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Established new 2020 goal (now measured against the 2016 baseline) seeking to reduce greenhouse gas emissions by an additional 25%.

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Diverted 95% of non-hazardous waste generated in our manufacturing plants away from landfills during 2017.

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Maintained an award-winning ReelSmart® recycling program, which helps our customers reduce their waste and saves over 20,000 trees annually.

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Developed a product design process that prioritizes sustainability through all stages of the product lifestyle, further reducing resource consumption.

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Heavily focused on a robust ethics and compliance program, including an independent audit function and corporate ethics and compliance officer, a strong Code of Ethics and Business Conduct, policies on anti-corruption and anti-bribery, and a well-publicized whistleblower and investigation program with a strict policy prohibiting retaliation.

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Chairman received the Bresnan Ethics in Business award in 2017. This award honors men and women in the cable TV industry that exemplify outstanding commitment to business ethics.

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Conducted an Employee Engagement Survey that is part of our efforts targeted at building on our past success. In response to the survey, we are enhancing career development and growth opportunities for employees. We also intend to increase the speed of our business processes and decisions. By increasing agility and reducing complexity, we will serve our customers better.

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Strong, independent Board with a Lead Independent Director

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Risk oversight provided by both the appropriate committees and the full Board

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Regular Board and committee self-evaluations

2018 Proxy Statement

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Significant portion of executive pay is at risk

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Blend of equity awards, including some that are performance based with multi-year vesting

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Regular shareholder engagement facilitated by the annual say on pay vote

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A compensation approach that seeks to eliminate incentives for excessive risk taking, and prohibits margin accounts and pledging of Company shares

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Competitive pay - allows us to attract top talent and to retain those employees by rewarding outstanding achievement

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Pay for performance – by rewarding the results that will enhance near-term performance and drive long-term sustainable returns

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Alignment with stockholders – through performance goals and by setting meaningful equity ownership guidelines

(1)

Compensation that varies based on company performance and/or changes in our stock price is considered at-risk.

2018 Proxy Statement

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Compensation Element

Purpose

Link to Performance

2017 Results

Base Salary

Recognize performance of job responsibilities as well as attract and retain individuals with superior talent.

Determined based on job scope, experience and market competitiveness.

Our CEO’s base salary increased by 3.4% in 2017. Base salaries for our named executive officers also increased an average of 3.4% in 2017.

Annual Incentive Plan (AIP) Bonus Awards

Provide short-term incentives linked directly to achievement of financial objectives.

Value earned is based on the level of achievement against predetermined Adjusted Operating Income (AOI), Adjusted Free Cash Flow and Corporate Revenue goals.

We did not attain threshold performance for the AOI and Corporate Revenue performance metrics for 2017. Performance of the Adjusted Free Cash Flow metric was slightly higher than the threshold level, resulting in AIP payouts equal to 16.33% of AIP overall target opportunity.

Stock Options

Directly link senior management’s and stockholders’ interests by tying long-term incentive to stock price appreciation.

The realized value of stock options is based on stock price performance for up to 10 years.

2017 stock options vest in equal installments over three years, beginning on the first anniversary of the grant date.

Restricted Stock Units (RSUs)

Provide a strong retention element of compensation while providing alignment of executive and stockholders’ interests.

The realized value of RSUs is based on stock price performance over the vesting period.

2017 RSUs vest in equal installments over three years, beginning on the first anniversary of the grant date.

Performance Share Units (PSUs)

Provide a strong retention element along with aligning compensation with our business strategy and the long-term creation of stockholder value.

The number of PSUs earned is based on the level of achievement of AOI goals for a one-year performance period. Value realized also varies based on stock price performance over the vesting period.

We did not attain threshold AOI goals for 2017. As a result, the PSUs granted in 2017 were forfeited.

2018 Proxy Statement

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2018 Proxy Statement

6

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Proposal No. 1—Election of three Class II directors to serve until the 2021 Annual Meeting of Stockholders;

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Proposal No. 2—Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2018;

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Proposal No. 3—Advisory vote to approve the compensation paid to our named executive officers.

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Proposal No. 1— FOR the election of each of the three nominees to the Board;

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Proposal No. 2— FOR ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2018;

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Proposal No. 3— FOR the advisory vote to approve the compensation paid to our named executive officers.

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Through the Internet. You may vote by proxy through the Internet by following the instructions on the Notice or the instructions on the proxy card (if you request printed copies of the proxy materials by mail).

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By Telephone. You may vote by proxy by calling the toll-free telephone number shown on the proxy card and following the recorded instructions.

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By Mail. If you request printed copies of the proxy materials by mail, you may vote by proxy by completing, signing and dating the proxy card and sending it back to the Company in the envelope provided.

2018 Proxy Statement

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In Person at the Annual Meeting. If you attend the Annual Meeting, you may vote your shares in person. We encourage you, however, to vote through the Internet, by telephone or by mailing us your proxy c ard even if you plan to attend the Annual Meeting so that your shares will be voted in the event you later decide not to attend the Annual Meeting.

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Through the Internet. You may vote by proxy through the Internet by following the instructions provided in the Notice and the voting instruction form provided by your broker, bank or other holder of record.

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By Telephone. You may vote by proxy by calling the toll-free number found on the voting instruction form and following the recorded instructions.

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By Mail. If you request printed copies of the proxy materials by mail, you may vote by proxy by completing, signing and dating the voting instruction form and sending it back to the record holder in the envelope provided.

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In Person at the Annual Meeting. If you are a beneficial owner of shares held in street name and you wish to vote in person at the Annual Meeting, you must obtain a legal proxy from your broker, bank or other holder of record and present it at the Annual Meeting. Please contact that organization for instructions regarding obtaining a legal proxy.

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delivering to our Corporate Secretary an instrument revoking the proxy;

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delivering a new proxy in writing, through the Internet, by telephone or by mail, dated after the date of the proxy being revoked; or

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attending the Annual Meeting and voting in person (attendance without casting a ballot will not, by itself, constitute revocation of a proxy).

2018 Proxy Statement

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Proposal

Vote Required

Impact of Abstentions and Broker
Non-Votes, if any

No. 1—Election of directors

Each director will be elected by a vote of a majority of the votes cast with respect to that director, meaning the number of shares voted “for” a director must exceed the number of votes cast “against” that director.

Abstentions and broker non-votes will not affect the outcome of the vote.

No. 2—Ratification of appointment of independent registered public accounting firm

Approval by a majority of the voting power of the shares entitled to vote and represented in person or by proxy.

Abstentions will count as votes against the proposal.

No. 3—Advisory vote to approve compensation paid to our named executive officers

Approval by a majority of the voting power of the shares entitled to vote and represented in person or by proxy.

Abstentions will count as votes against the proposal; broker non-votes will not affect the outcome of the vote.

2018 Proxy Statement

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•

a brokerage statement or letter from a bank or broker that is a record holder indicating your ownership of CommScope stock as of the close of business on March 6, 2018;

•

a printout of the proxy distribution email (if you received your materials electronically);

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a proxy card;

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a voting instruction form; or

•

a legal proxy provided by your broker, bank or nominee.

2018 Proxy Statement

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Austin A. Adams

Age: 74

Director Since: 2014

Committees:

Audit

Mr. Adams became a member of our Board of Directors in 2014 and serves on our Audit Committee. He served as Executive Vice President and Corporate Chief Information Officer of JPMorgan Chase from 2004 (upon the merger of JPMorgan Chase and Bank One Corporation) until his retirement in 2006. Prior to the merger, Mr. Adams served as Executive Vice President and Chief Information Officer of Bank One from 2001 to 2004. Prior to joining Bank One, he was Chief Information Officer at First Union Corporation (now Wells Fargo & Co.) from 1985 to 2001. Mr. Adams is also a director of the following public companies: KeyCorp and Enbridge Inc. (formerly Spectra Energy, Inc). He formerly served as a director of the following public companies: The Dun & Bradstreet Corporation, CommunityOne Bancorp, and First Niagara Financial Group, Inc.

Skills and Qualifications:

The Board has concluded that Mr. Adams should serve as a director because he brings significant experience in information technology, has significant public company directorship and committee experience and has significant core business skills, including technology and strategic planning.

2018 Proxy Statement

11

Stephen (Steve) C. Gray

Age: 59

Director Since: 2011

Committees:

Compensation (Chair)

Mr. Gray became a member of our Board of Directors in 2011 and serves as the Chair of our Compensation Committee. Mr. Gray was President and CEO of Syniverse Holdings, Inc., from 2015 to 2018, a position he also held on an interim basis from August 2014 to February 2015. From 2007 to 2015, he served as a Senior Advisor to The Carlyle Group. Mr. Gray is the Founder and Chairman of Gray Venture Partners, LLC a private investment company and previously served as President of McLeodUSA Incorporated from 1992 to 2004. Prior to joining McLeodUSA, he served from 1990 to 1992 as Vice President of Business Services at MCI Inc. and before that, from 1988 to 1990, he served as Senior Vice President of National Accounts and Carrier Services for TelecomUSA. From 1986 to 1988, Mr. Gray held a variety of sales management positions with WilTel Network Services and the Clayton W. Williams Companies, including ClayDesta Communications Inc. Mr. Gray serves as the Chairman of the following private companies: ImOn Communications, LLC, SecurityCoverage, Inc., Involta, LLC and HH Ventures, LLC. He also serves on the board of directors of Syniverse Holdings, Inc. and previously served on the board of directors of Insight Communications, Inc.

Skills and Qualifications:

The Board of Directors has concluded that Mr. Gray should serve as a director because he has significant core business skills, including financial and strategic planning for entrepreneurial to large businesses, and has extensive experience as a director.

L. William (Bill) Krause

Age: 75

Director Since: 2011

Committees:

Compensation

Nominating and Corporate Governance

Mr. Krause became a member of our Board of Directors in 2011 and serves as a member of our Compensation Committee and Nominating and Corporate Governance Committee. Mr. Krause has been President of LWK Ventures, a private advisory and investment firm, since 1991. He also currently serves as a Senior Advisor to The Carlyle Group and a Board Partner at Andreessen Horowitz. In addition, Mr. Krause served as President and Chief Executive Officer of 3Com Corporation, a global data networking company, from 1981 to 1990, and as its Chairman from 1987 to 1993 when he retired. Mr. Krause currently serves on the board of directors of Coherent, Inc., a leading supplier of Photonic-based systems. He also serves as Chairman of the Board of Veritas Holding, Ltd., an information management leader which is privately held. Mr. Krause previously served as a director of the following public companies: Brocade Communication Systems, Inc., Core-Mark Holding Company, Inc., and Sybase, Inc.

Skills and Qualifications:

The Board of Directors has determined that Mr. Krause should serve as a director because of his years of executive leadership and management experience in the high technology industry and his service on the boards of other public companies and committees thereof.

2018 Proxy Statement

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Marvin (Eddie) S.

Edwards, Jr.

Age: 69

Director Since: 2011

Committees:

None

Mr. Edwards became our President and Chief Executive Officer and a member of our Board of Directors in 2011. From 2010 to 2011, Mr. Edwards was our President and Chief Operating Officer. Prior to that, Mr. Edwards served as our Executive Vice President of Business Development and General Manager, Wireless Network Solutions from 2007 to 2010. From 2005 to 2007, he served as our Executive Vice President of Business Development and the Chairman of the Board of Directors of our wholly-owned subsidiary, Connectivity Solutions Manufacturing LLC. Mr. Edwards also served as Director, President and Chief Executive Officer of OFS Fitel, LLC and OFS BrightWave, LLC, a joint venture between our Company and The Furukawa Electric Co. Mr. Edwards has also served in various capacities with Alcatel, including President of Alcatel North America Cable Systems and President of Radio Frequency Systems.

Skills and Qualifications:

The Board of Directors has concluded that Mr. Edwards should serve as a director because he brings extensive experience regarding our business, the management of public and private companies and the telecommunications industry.

Claudius (Bud) E.

Watts IV

Age: 56

Director Since: 2011

Committees:

Compensation

Nominating and Corporate Governance

Mr. Watts joined our Board of Directors in 2011, became our Lead Independent Director in November 2017 and is a member of our Compensation Committee and our Nominating and Corporate Governance Committee. He is a private investor and serves as a Senior Advisor to the Carlyle Group, where he was a partner until 2017. Mr. Watts established Carlyle’s Technology Buyout business in 2004 and led it until 2014. Prior to joining Carlyle in 2000, Mr. Watts was a Managing Director in the M&A group of First Union Securities, Inc. which he joined when it acquired Bowles Hollowell Conner & Co., where he was a principal. Mr. Watts also serves as Chairman of the Board of Carolina Financial Corporation (NASDAQ: CARO) and has previously served on the boards of directors of numerous other Carlyle portfolio companies over the past 17 years.

Skills and Qualifications:

The Board of Directors has concluded that Mr. Watts should serve as a director because he brings extensive experience regarding the governance of public and private companies and the technology industry, as well as his financial expertise.

2018 Proxy Statement

13

Timothy T. Yates

Age: 70

Director Since: 2013

Committees:

Audit (Chair)

Mr. Yates became a member of our Board of Directors following our initial public offering in 2013 (our IPO) and serves as the Chair of our Audit Committee. He served as Monster Worldwide’s Executive Vice President from 2007 until 2013, Chief Financial Officer from 2007 until 2011 and CEO from 2014 to 2016. In addition, he served as a director of Monster Worldwide, Inc., a publicly traded company, from 2007 to 2016. Prior to that, Mr. Yates served as Senior Vice President, Chief Financial Officer and a director of Symbol Technologies, Inc. from 2006 to 2007. From January 2007 to June 2007, he was responsible for the integration of Symbol into Motorola, Inc.’s Enterprise Mobility business. From August 2005 to February 2006, Mr. Yates served as an independent consultant to Symbol. Prior to this, from 2002 to 2005, Mr. Yates served as a partner and Chief Financial Officer of Saguenay Capital, a boutique investment firm. Prior to that, he served as a founding partner of Cove Harbor Partners, a private investment and consulting firm, which he helped establish in 1996. From 1971 through 1995, Mr. Yates held a number of senior leadership roles at Bankers Trust New York Corporation, including serving as Chief Financial and Administrative Officer from 1990 through 1995.

Skills and Qualifications:

The Board of Directors has concluded that Mr. Yates should serve as a director because he has significant core business skills, including financial and strategic planning, and he has significant management experience and financial expertise.

2018 Proxy Statement

14

Frank M. Drendel

Age: 73

Director Since: 2011

Committees:

None

Mr. Drendel has been our Chairman of the Board since 2011. He served as our Chairman of the Board and Chief Executive Officer from 1976 until 2011. Mr. Drendel is a director of the National Cable & Telecommunications Association, the principal trade association of the cable industry in the United States, and was inducted into the Cable Television Hall of Fame in 2002. Mr. Drendel served on the board of directors of Tyco International, Ltd., which was acquired by Johnson Controls International, from 2012 to September 2016. He served as a director of General Instrument Corporation and its predecessors/successors from 1987 to 2000, as a director of Sprint Nextel Corporation from 2005 to 2008 and as a director of Nextel Communications, Inc. from 1997 to 2005.

Skills and Qualifications:

The Board of Directors has concluded that Mr. Drendel should serve as a director because he brings extensive experience regarding our business, the management of public and private companies and the telecommunications industry. See “Compensation Discussion and Analysis—Employment, Severance and Change in Control Arrangements” for more information regarding the employment agreement we have entered into with Mr. Drendel.

Joanne M. Maguire

Age: 64

Director Since: 2016

Committees:

Nominating and Corporate Governance (Chair)

Ms. Maguire became a director in 2016 and serves as the Chair of our Nominating and Corporate Governance Committee. She served as executive vice president of Lockheed Martin Space Systems Company (SSC), a provider of advanced-technology systems for national security, civil and commercial customers, from 2006 until she retired in 2013. Ms. Maguire joined Lockheed Martin in 2003 and assumed leadership of SSC in 2006. Prior to joining Lockheed Martin, Ms. Maguire was with TRW’s Space & Electronics sector (now part of Northrop Grumman) filling a range of progressively responsible positions from engineering analyst to Vice President and Deputy to the sector’s CEO, serving in leadership roles over programs as well as engineering, advanced technology, manufacturing and business development organizations. Ms. Maguire is on the boards of directors of Visteon Corporation, Charles Stark Draper Laboratory, Tetra Tech, Inc. and previously served on the board of directors of Freescale Semiconductor, Ltd.

Skills and Qualifications:

The Board has concluded that Ms. Maguire should serve as a director because she brings experience gained from holding senior leadership positions within a publicly traded company in the technology sector. The senior leadership positions she has held provide her with experience, including strategic planning, operations, risk management and corporate governance experience, which is particularly valuable to her service on our Board of Directors.

2018 Proxy Statement

15

Thomas J. Manning

Age: 62

Director Since: 2014

Committees:

Audit

Mr. Manning became a member of our Board in 2014 and serves on our Audit Committee. He was appointed Chairman and Chief Executive Officer (Interim) of Dun & Bradstreet in February 2018 after previously serving as Lead Director and Chair of the Nominating and Corporate Governance Committee. Mr. Manning has been a Lecturer in Law at The University of Chicago Law School, teaching courses on corporate governance, private equity and U.S.-China relations, and innovative solutions, since 2012. Mr. Manning is also a Senior Advisor to The Demand Institute, a joint venture of The Conference Board and The Nielsen Company, and an Affiliated Partner of Waterstone Management Group. Previously, he served as the Chief Executive Officer of Cerberus Asia Operations & Advisory Limited, a subsidiary of Cerberus Capital Management, a global private equity firm, from 2010 to 2012, Chief Executive Officer of Indachin Limited from 2005 to 2009, Chairman of China Board of Directors Limited from 2005 to 2010, and a senior partner with Bain & Company and a member of Bain’s China board and head of Bain’s information technology strategy practice in the Silicon Valley and Asia from 2003 to 2005. Prior to that, Mr. Manning served as Global Managing Director of the Strategy & Technology Business of Capgemini, Chief Executive Officer of Capgemini Asia Pacific, and Chief Executive Officer of Ernst & Young Consulting Asia Pacific, where he led the development of consulting and IT service and outsourcing businesses across Asia from 1996 to 2003. Early in his career, Mr. Manning was with McKinsey & Company, Buddy Systems, Inc. and CSC Index. Mr. Manning is also a director of Clear Media Limited (where he is Chair of the Remuneration Committee). He previously served as a director of iSoftStone Holdings Limited, GOME Electrical Appliances Company, AsiaInfo-Linkage, Inc. and Bank of Communications Co., Ltd.

Skills and Qualifications:

The Board has concluded that Mr. Manning should serve as a director because he brings significant expertise in technology and business operations and innovation on a global scale, has significant public company directorship and committee experience and has significant core business skills, including strategic planning, regulatory matters, partnerships and alliances, and general corporate governance.

2018 Proxy Statement

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2018 Proxy Statement

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2018 Proxy Statement

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•

Integrity :  reputation for integrity, honesty and adherence to high ethical standards;

•

Sound business judgment :  demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to our current and long-term objectives and a willingness to contribute positively to the decision-making process;

•

Ability and willingness to commit sufficient time to the Board :  commitment to understand us and our industry and to regularly attend and participate in meetings of the Board of Directors and its committees; and

•

Ethics and independence :  ability to understand the sometimes conflicting interests of our various constituencies, which include stockholders, employees, customers, governmental units, creditors and the general public, and to act in the interests of all stockholders.

2018 Proxy Statement

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2018 Proxy Statement

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Committee

Primary Responsibilities

Audit ⁽¹⁾

Members: Messrs. Yates (Chair), Adams and Manning

Number of Meetings in 2017: 4

• Assists the Board of Directors in its oversight of (i) our accounting and financial reporting processes and other internal control processes, (ii) the audits and integrity of our financial statements, and (iii) our compliance with legal and regulatory requirements.

• Approves the independent registered public accounting firm’s appointment, compensation, retention and provides oversight of their work as well as annually assesses their qualifications and independence.

• Considers and reviews the adequacy and effectiveness of our internal controls over financial reporting and any related significant findings of our independent auditor and internal audit.

• Reviews our Code of Ethics and recommends changes as well as reviews and assesses any violations.

• Reviews and approves any proposed related person transactions.

• Reviews our financial and risk management policies, including approval of decisions to enter swaps or other derivatives.

Compensation ⁽²⁾

Members: Messrs. Gray (Chair), Krause and Watts

Number of Meetings in 2017: 5

• Reviews and approves the compensation philosophy for our chief executive officer.

• Reviews and approves all forms of compensation and benefits provided to our other executive officers.

• Reviews and oversees the administration of our equity incentive plans.

• May engage independent compensation advisors to provide advice regarding our executive compensation program.

Nominating and Corporate Governance ⁽³⁾

Members: Ms. Maguire (Chair) and Messrs. Krause and Watts

Number of Meetings in 2017: 3

• Identifies, screens and recommends candidates to the Board of Directors for election to our Board of Directors.

• Reviews the composition of the Board of Directors and its committees.

• Reviews and determines appropriate Board leadership structure.

• Develops and recommends appropriate Corporate Governance Guidelines.

• Oversees overall compliance with and execution of the Company’s Corporate Governance Guidelines.

(1)

The Board of Directors has determined that each of Messrs. Yates, Adams and Manning is an “audit committee financial expert” as such term is defined under the applicable regulations of the Commission and has the requisite accounting or related financial management expertise and financial sophistication under the applicable rules and regulations of Nasdaq. The Board of Directors has also determined that Messrs. Yates, Adams and Manning are each independent under Rule 10A-3 under the Exchange Act and the Nasdaq standard, for purposes of Audit Committee independence. All members of the Audit Committee can read and understand fundamental financial statements, are familiar with finance and accounting practices and principles and are financially literate.

(2)

The Compensation Committee’s processes for fulfilling its responsibilities and duties with respect to executive compensation and the role of executive officers and management in the compensation process are each described under the heading “Determination of Compensation Awards” in this Proxy Statement. The Board of Directors has determined that each member of the Compensation Committee satisfies the enhanced independence standards for compensation committee members as defined in the rules of Nasdaq and the Commission.

(3)

The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is independent as defined in the Nasdaq rules.

2018 Proxy Statement

21

2018 Proxy Statement

22

Annual Non-Employee Director Compensation Prior to April 1, 2017

Basic Cash Retainer

$             85,000

Supplemental Cash Retainers:

Audit Committee Chair(1)

$             25,000

Audit Committee Member

$             15,000

Compensation Committee Chair(1)

$             17,500

Compensation Committee Member

$             10,000

Nominating and Corporate Governance Committee Chair(1)

$             15,000

Nominating and Corporate Governance Committee Member

$             10,000

Annual Stock Retainer(2)

$           125,000

Annual Non-Employee Director Compensation Effective April 1, 2017

Basic Cash Retainer

$             80,000

Supplemental Cash Retainers:

Lead Independent Director (appointed Nov 2017)

$             30,000

Audit Committee Chair(1)

$             30,000

Audit Committee Member

$             15,000

Compensation Committee Chair(1)

$             20,000

Compensation Committee Member

$             10,000

Nominating and Corporate Governance Committee Chair(1)

$             15,000

Nominating and Corporate Governance Committee Member

$             10,000

Annual Stock Retainer(2)

$           160,000

(1)

Amount includes both the supplemental cash retainer for serving as the committee chair and the supplemental cash retainer for serving as a member of such Committee.

(2)

The number of RSUs granted as the annual stock retainer is determined based upon closing price of the underlying shares of our common stock on the date of grant.

Name

Fees Earned or

Paid in Cash ($)

Stock

Awards ($)(1)

Total ($)(1)

Austin A. Adams

96,250

159,981

256,231

Stephen C. Gray

89,583

159,981

249,564

L. William Krause

101,250

159,981

261,231

Joanne M. Maguire

93,750

159,981

253,731

Thomas J. Manning

96,250

159,981

256,231

Claudius E. Watts IV

115,814

201,639

317,453

Timothy T. Yates

110,000

159,981

269,981

(1)

We granted Mr. Watts 1,153 RSUs in 2017 which vested January 23, 2018. We granted Messrs. Adams, Gray, Krause, Manning, Watts and Yates and Ms. Maguire each 4,470 RSUs in 2017 which will vest May 5, 2018. As of December 31, 2017, Messrs. Gray and Krause each held fully vested options to purchase 28,575 shares of our common stock at $5.74 per share.

2018 Proxy Statement

23

Stock Awards

Name

Number of

Shares

Acquired on

Vesting (#)

Value

Realized

on

Vesting ($)

Austin A. Adams

4,230

151,392

Stephen C. Gray

4,230

151,392

L. William Krause

4,230

151,392

Joanne M. Maguire

5,839

211,247

Thomas J. Manning

4,230

151,392

Claudius E. Watts IV

—

—

Timothy T. Yates

4,230

151,392

2018 Proxy Statement

24

•

review the relevant facts and circumstances of each related person transaction, including the financial terms of such transaction, the benefits to us, the availability of other sources for comparable products or services, if the transaction is on terms no less favorable to us than those that could be obtained in arm’s-length dealings with an unrelated third party or employees generally and the extent of the related person’s interest in the transaction; and

•

consider the impact on the independence of any independent director and the actual or apparent conflicts of interest.

•

certain employment and compensation arrangements;

•

transactions where the related person’s interest is only as an employee (other than an executive officer), director or owner of less than ten percent (10%) of the equity in another entity;

•

transactions where the related person is an executive officer of another company and the aggregate amount involved does not exceed the greater of $200,000 or five percent (5%) of the total annual revenues of the other company;

•

charitable contributions to an organization, foundation or university at which the related person’s only relationship is as an employee, trustee or director, if the contribution is made pursuant to the Company’s policies and approved by someone other than the related person;

•

transactions where the interest of the related person arises solely from the ownership of a class of equity securities in our Company where all holders of such class of equity securities will receive the same benefit on a pro rata basis;

•

transactions determined by competitive bids;

•

certain regulated transactions involving the rendering of services at rates or charges fixed by law or governmental authority; and

•

certain transactions involving banking-related services such as services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture or similar services.

2018 Proxy Statement

25

2018 Proxy Statement

26

Name

Age

Position

Marvin (Eddie) S. Edwards, Jr.

69

President, Chief Executive Officer and Director

Mark A. Olson

59

Executive Vice President and Chief Financial Officer

Randall W. Crenshaw

60

Former Executive Vice President and Chief Operating Officer

Morgan C.S. Kurk

48

Executive Vice President and Chief Operating Officer

Peter U. Karlsson

54

Senior Vice President, Global Sales

Frank (Burk) B. Wyatt, II

55

Senior Vice President, General Counsel and Secretary

Philip M. Armstrong, Jr.

56

Senior Vice President, Corporate Finance

Robert W. Granow

60

Senior Vice President, Corporate Controller and Principal Accounting Officer

Robyn T. Mingle

52

Senior Vice President, Human Resources

2018 Proxy Statement

27

2018 Proxy Statement

28

•

each of our named executive officers;

•

each of our directors;

•

all our directors and executive officers as a group; and

•

each individual or entity known to own beneficially more than 5% of the capital stock.

Name of Beneficial Owner

Common Stock

Options to Purchase Common Stock (1)

RSUs (2)

Total Shares of Common Stock Beneficially Owned

Percentage of Class

Executive Officers and Directors:

Marvin S. Edwards, Jr.

President, Chief Executive Officer and

Director

143,048

1,745,664

—

1,888,712

*

Mark A. Olson

Executive Vice President and Chief

Financial Officer

39,253

66,072

—

105,325

*

Randall W. Crenshaw

Former Executive Vice President and Chief

Operating Officer

40,239

83,679

—

123,918

*

Morgan C.S. Kurk

Executive Vice President and Chief Operating

Officer

17,946

27,451

—

45,397

*

Peter U. Karlsson

Senior Vice President, Global Sales

13,135

41,361

—

54,496

*

Frank B. Wyatt, II

Senior Vice President, General Counsel and

Secretary

41,336

37,551

—

78,887

*

Frank M. Drendel

Chairman of the Board

2,416,482

(3)

1,565,897

—

3,982,379

2.06%

2018 Proxy Statement

29

Name of Beneficial Owner

Common

Stock

Options to Purchase Common Stock (1)

RSUs (2)

Total Shares of Common Stock Beneficially Owned

Percentage of Class

Austin A. Adams

Director

12,676

—

4,470

17,146

*

Stephen C. Gray

Director

9,594

—

4,470

14,064

*

L. William Krause

Director

9,594

28,575

4,470

42,639

*

Joanne M. Maguire

Director

5,839

—

4,470

10,309

*

Thomas J. Manning

Director

9,836

—

4,470

14,306

*

Claudius E. Watts IV

Director

31,153

—

4,470

35,623

*

Timothy T. Yates

Director

31,597

—

4,470

36,067

*

Directors and executive officers as a

group (17 persons)

2,852,174

3,673,328

31,290

6,556,792

3.35%

Large Stockholders:

Capital Research Global Investors(4)

333 South Hope Street

Los Angeles, CA  90071

23,681,494

—

—

23,681,494

12.34%

The Vanguard Group(5)

100 Vanguard Blvd.

Malvern, PA  19355

16,087,816

—

—

16,087,816

8.38%

FPR Partners, LLC(6)

199 Fremont Street, Suite 2500

San Francisco, CA  94105

12,006,165

—

—

12,006,165

6.26%

JPMorgan Chase & Co.(7)

270 Park Avenue

New York, NY  10017

11,395,112

—

—

11,395,112

5.94%

*

Denotes less than 1%

(1)

Includes options to purchase shares of common stock that are currently exercisable or will become exercisable within 60 days of March 6, 2018.

(2)

Includes restricted stock units that will vest and become exercisable within 60 days of March 6, 2018.

(3)

Includes 97,200 shares held in three separate guarantor retained annuity trusts established by Mr. Drendel and 152,383 shares held by the trusts of the deceased spouse of Mr. Drendel.

(4)

According to a Schedule 13G filed on February 14, 2018 by Capital Research Global Investors (a division of Capital Research and Management Company), reporting beneficial ownership of our common stock as of December 29, 2017.

(5)

According to a Schedule 13G filed by The Vanguard Group on February 9, 2018, reporting beneficial ownership of our common stock as of December 31, 2017. The shares listed in the table are beneficially owned by the following subsidiaries of The Vanguard Group: Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd. The Vanguard Group has sole voting power with respect to 143,154 of the shares, shared voting power with respect to 42,977 of the shares, sole dispositive power with respect to 15,908,163 of the shares, and shared dispositive power over 179,653 of the shares.

(6)

According to a Schedule 13G filed jointly by FPR Partners, LLC, Andrew Raab and Bob Peck on February 14, 2018, reporting beneficial ownership of our common stock as of December 31, 2017. According to the Schedule 13G, FPR Partners, LLC is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940 and, as such, may be deemed to have beneficial ownership of 12,006,165 shares of our common stock through the investment discretion it exercises over its clients’ accounts. Andrew Raab and Bob Peck are the Senior Managing Members of FPR Partners, LLC. FPR Partners, LLC, Andrew Raab and Bob Peck each have shared voting and dispositive power over the 12,006,165 shares reported on the Schedule 13G.

(7)

According to a Schedule 13G filed by JPMorgan Chase & Co. on January 9, 2018, reporting beneficial ownership of our common stock as of December 29, 2017.  According to the Schedule 13G, JPMorgan Chase & Co. is a parent holding company or control person with the sole power to vote 11,200,188 of the shares, sole power to direct the disposition of 11,392,856 of the shares and shared power to direct the disposition of 2,256 of the shares. The shares listed in the table are beneficially owned by the following subsidiaries of JPMorgan Chase & Co.: J.P. Morgan Trust Company of Delaware; J.P. Morgan Investment Management Inc.; JPMorgan Chase Bank, National Association; JPMorgan Asset Management (UK) Limited; and J.P. Morgan Securities LLC.

2018 Proxy Statement

30

2018 Proxy Statement

31

2017

2016

(in thousands)

Audit Fees

$8,416

$7,667

Audit-Related Fees

182

72

Tax Fees

692

557

TOTAL

$9,290

$8,296

2018 Proxy Statement

32

2018 Proxy Statement

33

2018 Proxy Statement

34

2018 Proxy Statement

35

2018 Proxy Statement

36

Compensation Discussion and Analysis

37

Summary Compensation Table for 2017

49

Introduction

37

Grants of Plan-Based Awards in 2017

50

Key 2017 Financial Performance Highlights

38

Narrative Supplement to Summary Compensation Table for 2017 and Grants of Plan-Based Awards in 2017 Table

50

Executive Compensation Objectives and Elements

39

2017 Compensation Analysis

41

Outstanding Equity Awards at December 31, 2017

51

Say on Pay Results and Consideration of Stockholder Support

41

Option Exercises and Stock Vested for 2017

52

Determination of Compensation Awards

41

Nonqualified Deferred Compensation for 2017

52

Role of the Compensation Consultant

42

SERP

52

Compensation Peer Group

42

DCP

53

2017 Elements of Compensation

43

Nonqualified Deferred Compensation

53

Base Salary

43

Potential Payments Upon Termination or Change in Control

54

Annual Incentive Plan

44

Employment and Severance Protection Agreements

54

Equity Incentive Awards

46

280G Tax Gross Up Provisions

56

Supplemental Executive Retirement Plan

47

Restrictive Covenants

57

Employee Benefits and Perquisites

47

SERP

59

Deferred Compensation Plan

47

Equity Incentive Awards

59

Employment, Severance and Change in Control Arrangements

47

Compensation-Related Risk Assessment

60

CEO Pay Ratio

60

Hedging and Pledging Policies

47

Equity Compensation Plan Information

61

Stock Ownership Guidelines

48

Compensation Committee Report

62

Name

Title

Marvin S. Edwards, Jr.

President and Chief Executive Officer (principal executive officer)

Mark A. Olson

Executive Vice President and Chief Financial Officer (principal financial officer) (1)

Randall W. Crenshaw

Former Executive Vice President and Chief Operating Officer (2)

Peter U. Karlsson

Senior Vice President, Global Sales

Frank B. Wyatt, II

Senior Vice President, General Counsel and Secretary

Frank M. Drendel

Chairman of the Board

(1)

Mr. Olson has announced he will retire March 31, 2018. See our current report on Form 8-K, filed on September 18, 2017, for more information.

(2)

Mr. Crenshaw retired as Executive Vice President and Chief Operating Officer on December 31, 2017. See our current report on Form 8-K, filed March 17, 2017, for more information.

2018 Proxy Statement

37

•

Revenue down 7.4% year over year, driven by a slowdown in spending in the U.S. market

•

Operating Income of $477.6 million, down $97.1 million year over year and AOI(1) of $882.3 million, down $169.1 million year over year

•

EPS of $0.98, down $0.15 year over year and Adjusted EPS (1) of $2.14, down $0.50 year over year

•

Cash Flow from Operations of $586.3 million, down 8.4% year over year

•

Adjusted Free Cash Flow (1) of $568.2 million, down 11.6% year over year

(1)

See reconciliation of Non-GAAP financial measures included in Annex A hereto.

2018 Proxy Statement

38

•

Competitive pay - providing compensation opportunities that enable us to attract superior talent in a highly competitive industry and retain key employees by rewarding outstanding achievement.

•

Pay for performance – creating incentives that reward management for financial results that our Compensation Committee believes will enhance near-term performance and drive sustainable performance over the longer term.

•

Alignment with stockholders – aligning our executives’ interests with those of our stockholders through our pay for performance philosophy and by encouraging our executives to have a meaningful equity stake in the Company.

Name

2017 Base Salary ($)

2017 Annual Incentive Plan (Cash Bonus Earned) ($)

2017 Long-Term Incentive (Grant Date Value of Options, RSUs and PSUs) Award ($)

Marvin S. Edwards, Jr.

1,056,250

215,594

6,999,992

Mark A. Olson

634,995

88,135

1,499,964

Randall W. Crenshaw

743,765

103,232

1,699,988

Peter U. Karlsson

549,994

76,337

1,249,951

Frank B. Wyatt, II

516,249

59,009

899,924

Frank M. Drendel

590,000

48,171

1,119,974

2018 Proxy Statement

39

Compensation Element

Purpose

Link to Performance

2017 Results

Base Salary

Recognize performance of job responsibilities as well as attract and retain individuals with superior talent.

Determined based on job scope, experience and market competitiveness.

Our CEO’s base salary increased by 3.4% in 2017. Base salaries for our named executive officers also increased an average of 3.4% in 2017.

Annual Incentive Plan (AIP) Bonus Awards

Provide short-term incentives linked directly to achievement of financial objectives.

Value earned is based on the level of achievement against predetermined Adjusted Operating Income (AOI), Adjusted Free Cash Flow and Corporate Revenue goals.

We did not attain threshold performance for the AOI and Corporate Revenue performance metrics for 2017. Performance of the Adjusted Free Cash Flow metric was slightly higher than the threshold level, resulting in AIP payouts equal to 16.33% of AIP overall target opportunity.

Stock Options

Directly link senior management’s and stockholders’ interests by tying long-term incentive to stock price appreciation.

The realized value of stock options is based on stock price performance for up to 10 years.

2017 stock options vest in equal installments over three years, beginning on the first anniversary of the grant date.

Restricted Stock Units (RSUs)

Provide a strong retention element of compensation while providing alignment of executive and stockholders’ interests.

The realized value of RSUs is based on stock price performance over the vesting period.

2017 RSUs vest in equal installments over three years, beginning on the first anniversary of the grant date.

Performance Share Units (PSUs)

Provide a strong retention element along with aligning compensation with our business strategy and the long-term creation of stockholder value.

The number of PSUs earned is based on the level of achievement of AOI goals for a one-year performance period. Value realized also varies based on stock price performance over the vesting period.

We did not attain threshold AOI goals for 2017. As a result, the PSUs granted in 2017 were forfeited.

2018 Proxy Statement

40

(1)

Compensation that varies based on company performance and/or changes in our stock price is considered at-risk.

•

Their compensation levels from prior years

•

Individual and Company performance

•

Each executive’s scope of responsibility and experience

•

The judgment and general industry knowledge of its members obtained through years of service with comparably-sized companies in our industry and other similar industries

2018 Proxy Statement

41

•

Input about competitive market practices from our independent compensation consultant

•

Analyzed the compensation levels and practices of the companies in our compensation peer group

•

Reviewed the competitiveness of compensation paid to our NEOs including base salary, annual cash awards and long-term incentive awards

•

Reviewed and provided input on the design of the annual and long-term incentives provided to our NEOs and other executives

•

Reviewed the competitiveness of compensation paid to our non-employee directors

•

Reviewed and provided input on the Compensation Discussion and Analysis section of our Proxy Statement

•

Provided ad hoc advice and support

•

Companies with a status as an independent, publicly traded company

•

Companies with revenue between approximately 0.5 times to 2.0 times our revenue on a trailing twelve-month basis using publicly reported information available in 2016

•

Companies with a market capitalization between approximately 0.33 times to 3.0 times our market capitalization in 2016

•

Companies with a similar industry profile, prioritizing direct competitors and companies that operate in the Communications Equipment sector

2018 Proxy Statement

42

Peer Companies

Amphenol Corporation

Keysight Technologies

ARRIS International

Motorola Solutions, Inc.

Belden Inc.

NCR Corporation

Brocade Communications Systems, Inc.(1)

NetApp, Inc.

Ciena Corporation

Rockwell Automation, Inc.

Corning Inc.

TE Connectivity Limited

Harris Corporation

Trimble Navigation Limited

Hubbell Inc.

Zebra Technologies, Inc.

Juniper Networks, Inc.

(1)

Based on Brocade’s pending acquisition by Broadcom, the Compensation Committee removed Brocade from the peer group in September 2017 for analysis that will be used to support 2018 compensation decisions.

2018 Proxy Statement

43

Name

2016 Base Salary

2017 Base Salary

Percent

Increase

Marvin S. Edwards, Jr.

$

1,030,000

$

1,065,000

3.40

%

Mark A. Olson

$

619,980

$

640,000

3.23

%

Randall W. Crenshaw

$

725,060

$

750,000

3.44

%

Peter U. Karlsson

$

534,976

$

555,000

3.74

%

Frank B. Wyatt, II

$

504,994

$

520,000

2.97

%

Frank M. Drendel

$

575,000

$

595,000

3.48

%

2018 Proxy Statement

44

Performance Metric

Definition

Link to Performance

Adjusted Operating Income

Consists of operating income as reported on the Consolidated Statement of Operations and Comprehensive Income (Loss), increased or reduced by each of the following to the extent that any such item is used to determine operating income:

• amortization of intangible assets

• certain extraordinary, unusual or non-recurring charges, expenses or losses

• certain restructuring costs and integration costs

• equity-based compensation expenses

• transaction fees and expenses and purchase accounting adjustments

• income or gains corresponding to certain unusual or non-recurring items

Measures profitability

Adjusted Free Cash Flow

N et cash provided by operating activities, less additions to property, plant and equipment, both as reported in the Company’s Consolidated Statement of Cash Flows, increased or reduced for unusual cash items as approved by the Compensation Committee

Measures our ability to translate earnings into cash, indicating the health of our business and allowing the Company to invest for the future

Corporate Revenue

Net sales as reported on the Consolidated Statement of Operations and Comprehensive Income (Loss), adjusted for favorable or unfavorable foreign exchange (FX) variances to the FX impact included in the 2017 Business Plan, subject to equitable adjustments related to acquisitions or divestitures as the Committee may approve

Measures growth

Performance Metric

Weighting

Threshold

Target

Maximum

Achieved

Adjusted Operating Income

60%

$904.9

$1,131.1

$1,357.4

$882.3

Adjusted Free Cash Flow

30%

$498.0

$622.5

$747.0

$568.2

Corporate Revenue

10%

$4,949.9

$5,103.0

$5,256.1

$4,560.6

2018 Proxy Statement

45

Threshold Award

Target Award

Maximum Award

Actual 2017 Award

Name

(% of 2017

Base Salary) (1)

(% of 2017

Base Salary)

(% of 2017

Base Salary)

% of 2017

Base Salary

Payout

Amount

Marvin S. Edwards, Jr.

62.5%

125.0%

262.5%

20.41%

$215,594

Mark A. Olson

42.5%

85.0%

178.5%

13.88%

$88,135

Randall W. Crenshaw

42.5%

85.0%

178.5%

13.88%

$103,232

Peter U. Karlsson

42.5%

85.0%

178.5%

13.88%

$76,337

Frank B. Wyatt, II

35.0%

70.0%

147.0%

11.43%

$59,009

Frank M. Drendel

25.0%

50.0%

105.0%

8.16%

$48,171

(1)

The threshold award reflects minimum performance of all three performance metrics (AOI, Adjusted Free Cash Flow and Corporate Revenue).

Vehicle

Target Value
as a Percent
of Total
Equity Awards

Overview of Key Terms

Stock Options

33%

• Vest and become exercisable in equal installments annually over three years subject to continuous service of the NEO

• Stock options have a 10-year term and an exercise price equal to the closing price of our common stock on the grant date

• Pro rata vesting upon retirement

RSUs

33%

• Vest in equal installments annually over three years, subject to the continuous service of the NEO

• Convertible into shares of common stock upon vesting

PSUs

33%

• NEOs can earn between 0% and 150% of the granted units based on 2017 AOI

• Any PSUs that are earned based on performance will vest 50% on the second anniversary of the grant date and 50% on the third anniversary subject to the continuous service of the NEO

• Convertible into shares of common stock upon vesting

2018 Proxy Statement

46

2018 Proxy Statement

47

Multiple of Salary Target

CEO

5x annual base salary

Chairman, CFO & COO

3x annual base salary

Designated Executive Officers

2x annual base salary

Non-Employee Directors

5x base retainer (excluding committee fees)

2018 Proxy Statement

48

Name and Principal Position

Year

Salary

($)

Bonus

($)(1)

Stock

Awards

($)(2)

Option

Awards

($)(2)

Non-Equity

Incentive Plan

Compensation

($)(3)

Change in

Pension Value

and

Nonqualified

Deferred

Compensation

Earnings

($)(4)

All Other

Compensation

($)(5)

Total

($)

Marvin S. Edwards, Jr.

2017

1,056,250

—

4,666,664

2,333,328

215,594

47,318

180,211

8,499,365

President and Chief

2016

1,022,500

—

2,666,635

1,440,581

2,007,551

44,566

444,142

7,625,975

Executive Officer

2015

983,750

200

2,493,344

1,246,666

776,671

43,428

253,823

5,797,882

Mark A. Olson

2017

634,995

—

999,978

499,986

88,135

—

16,560

2,239,654

Executive VP and

2016

614,985

—

799,975

428,677

821,063

—

16,260

2,680,960

Chief Financial Officer(6)

2015

572,500

—

666,692

333,330

307,352

—

16,260

1,896,134

Randall W. Crenshaw

2017

743,765

—

1,133,328

566,660

103,232

36,038

116,610

2,699,633

Former Executive VP and

2016

718,795

—

933,305

503,939

959,660

35,716

241,528

3,392,943

Chief Operating Officer(7)

2015

690,000

800

866,694

433,328

370,433

35,961

148,825

2,546,041

Peter U. Karlsson

2017

549,994

—

833,290

416,661

76,337

15,915

83,510

1,975,707

Senior VP

2016

531,232

—

519,999

280,641