LIBERTY GLOBAL PLC
10-Ks and 10-Qs
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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 (Amendment No. )
Filed by the Registrant
x
Filed by a Party other than the Registrant
¨
Check the appropriate box:
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¨
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Preliminary Proxy Statement
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¨
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to § 240.14a-12
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LIBERTY GLOBAL PLC
(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):
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x
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of 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):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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¨ Fee paid previously with preliminary materials.
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¨
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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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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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April 27, 2015
Dear Shareholder:
You are invited to attend the
2015
Annual General Meeting of Shareholders of Liberty Global plc to be held at 4:00 p.m. BST (11:00 a.m. Eastern time), on Thursday,
June 25, 2015
, at Broadgate West, 9 Appold Street, London EC2A 2AP, telephone number +44 (0)20 7655 5000. In addition, we will have a live video-conference of the meeting at the Denver Marriott South at Park Meadows, 10345 Park Meadows Drive, Lone Tree, Colorado 80124. The accompanying notice of the annual general meeting of shareholders and proxy statement describes the meeting, the resolutions you will be asked to consider and vote upon and related matters.
Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the annual general meeting, please vote as soon as possible to make sure that your shares are represented. You may vote via the internet or, if you receive a printed copy of your proxy materials, you may vote by mail by signing, dating and returning your proxy card in the envelope provided.
Thank you for your continued support and interest in our company.
Sincerely,
Michael T. Fries
Chief Executive Officer and President
Liberty Global plc
38 Hans Crescent, London SW1X 0LZ, United Kingdom, Registered in England Nr 8379990, www.libertyglobal.com
LIBERTY GLOBAL PLC
Notice of Annual General Meeting of Shareholders
to be Held
June 25, 2015
The
2015
Annual General Meeting of Shareholders (the
AGM
) of Liberty Global plc (
Liberty Global
) will be held at 4:00 p.m. BST (11:00 a.m. Eastern time), on Thursday,
June 25, 2015
, at Broadgate West, 9 Appold Street, London EC2A 2AP, telephone number +44 (0)20 7655 5000, for the following purposes:
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1.
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To elect
Michael T. Fries
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
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2.
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To elect
Paul A. Gould
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
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3.
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To elect
John C. Malone
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
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4.
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To elect
Larry E. Romrell
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
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5.
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To approve on an advisory basis the annual report on the implementation of the directors’ compensation policy for the year ended
December 31, 2014
, contained in Appendix A of the proxy statement (in accordance with requirements applicable to
U.K.
companies).
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6.
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To ratify the appointment of KPMG LLP (
U.S.
) as
Liberty Global
’s independent auditor for the year ending
December 31, 2015
.
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7.
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To appoint KPMG LLP (
U.K.
) as
Liberty Global
’s
U.K.
statutory auditor under the
U.K.
Companies Act 2006 (to hold office until the conclusion of the next annual general meeting at which accounts are laid before
Liberty Global
).
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8.
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To authorize the audit committee of
Liberty Global
’s board of directors to determine the
U.K.
statutory auditor’s compensation.
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Please refer to the proxy statement for detailed information on each of these resolutions. We encourage you to read the proxy statement in its entirety before voting. Our board of directors has approved each resolution and recommends that the shareholders entitled to vote at the
AGM
vote
“FOR”
each of the resolutions. No shareholder has proposed, in accordance with sections 100 through 102 of our articles of association, any additional resolutions to be brought before the
AGM
.
All of the resolutions will be proposed as ordinary resolutions, which means that, assuming a quorum is present, each resolution will be approved if a simple majority of votes cast are cast in favor thereof. With respect to the advisory vote on resolution 5 regarding approving our
U.K.
statutory implementation report for the year ended
December 31, 2014
, the result of the vote on such resolution will not require our board of directors or any committee thereof to take any action. Our board of directors will, however, consider the outcome of the advisory vote as it values the opinions of our shareholders.
During the
AGM
, our board of directors will lay before our company our
U.K.
annual report and accounts for the year ended
December 31, 2014
, which report includes our statutory accounts, the U.K. Statutory Directors’ Report and the statutory Auditors’ Report for the year ended
December 31, 2014
(the
U.K. Report and Accounts
).
All shareholders of
Liberty Global
are cordially invited to attend the
AGM
. All shareholders of record of
Liberty Global
Class A ordinary shares, nominal value $.01 per share,
Liberty Global
Class B ordinary shares, nominal value $.01 per share, and
Liberty Global
Class C ordinary shares, nominal value $.01 per share, as of 10:00 p.m. BST (5:00 p.m. Eastern time), on
April 30, 2015
, the record date for the
AGM
, are entitled to notice of the
AGM
or any adjournment thereof, but only shareholders
38 Hans Crescent, London SW1X 0LZ, United Kingdom, Registered in England Nr 8379990, www.libertyglobal.com
of record of Class A ordinary shares or Class B ordinary shares as of the record date are entitled to vote at the
AGM
or any adjournment thereof. The holders of our Class A ordinary shares and our Class B ordinary shares will vote together as a single class on each of the above resolutions. A list of shareholders entitled to vote at the
AGM
will be available at our offices at 38 Hans Crescent, London SW1X 0LZ, United Kingdom, and at 12300 Liberty Boulevard, Englewood, Colorado 80112, USA, for review by any shareholder, for any purpose germane to the
AGM
, for at least 10 days prior to the
AGM
.
Your vote is important, regardless of the number of shares you own. To make sure your shares are represented at the
AGM
, please vote as soon as possible, whether or not you plan to attend the
AGM
. You may vote by proxy either over the internet or by requesting a proxy card to complete, sign and promptly return in the postage-paid envelope (if mailed in the United States).
If you vote via the internet, your vote must be received by 6:00 a.m. BST (1:00 a.m. Eastern time), on
June 25, 2015
. You may revoke your proxy in the manner described in the accompanying proxy statement.
By Order of the Board of Directors,
Bryan H. Hall
Secretary
April 27, 2015
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL GENERAL MEETING, PLEASE VOTE VIA THE INTERNET AS PROMPTLY AS POSSIBLE. ALTERNATIVELY, REQUEST A PAPER PROXY CARD TO COMPLETE, SIGN AND RETURN BY MAIL.
38 Hans Crescent, London SW1X 0LZ, United Kingdom, Registered in England Nr 8379990, www.libertyglobal.com
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TABLE OF CONTENTS
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Page
Number
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PROXY STATEMENT
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Voting Matters and Board Recommendations
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QUESTIONS AND ANSWERS ABOUT THE AGM AND VOTING
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CORPORATE GOVERNANCE
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Governance Guidelines
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Director Independence
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Board Leadership Structure
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Risk Oversight
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Risk Assessment of Compensation Programs
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Code of Business Conduct and Code of Ethics
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Political Contributions
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Shareholder Communication with Directors
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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Security Ownership of Certain Beneficial Owners
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Security Ownership of Management
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Change in Control
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Section 16(a) Beneficial Ownership Reporting Compliance
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RESOLUTIONS 1, 2, 3 AND 4
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Vote and Recommendation
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Nominees for Election of Directors
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Directors Whose Term Expires 2016
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Directors Whose Term Expires 2017
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COMMITTEES OF THE BOARD OF DIRECTORS AND ATTENDANCE
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Board Meetings
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Director Attendance at AGMs
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Executive Sessions
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MANAGEMENT OF LIBERTY GLOBAL PLC
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Executive Officers
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Involvement in Certain Proceedings
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EXECUTIVE OFFICERS AND DIRECTORS COMPENSATION
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Executive Summary
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Compensation Discussion and Analysis
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Compensation Committee Report
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Summary Compensation
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Grants of Plan-Based Awards
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Narrative to Summary Compensation and Grants of Plan-Based Awards Tables
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Outstanding Equity Awards at Fiscal Year-End
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Option Exercises and Shares Vested
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Deferred Compensation Plan
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Employment and Other Agreements
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Aircraft Policy
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Potential Payments upon Termination or Change in Control
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Director Compensation
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2014 Compensation of Liberty Global Directors
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RESOLUTION 5
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Vote and Recommendation
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i
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RESOLUTIONS 6, 7 AND 8
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Vote and Recommendation
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Audit Fees and All Other Fees
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Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor
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Audit Committee Report
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INCENTIVE PLANS
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CERTAIN TRANSACTIONS
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Certain Relationships
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SHAREHOLDER RESOLUTIONS
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SHAREHOLDER RIGHTS
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ADOPTION OF NEW FINANCIAL REPORTING STANDARDS
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APPENDIX A: DIRECTORS’ REMUNERATION REPORT
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Annual Statement of the Chairman of the Compensation Committee
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Consideration of Shareholder Views
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Annual Compensation Report
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ii
LIBERTY GLOBAL PLC
38 Hans Crescent
London SW1X 0LZ, United Kingdom,
Registered in England Nr 8379990
_________________________________________________________
PROXY STATEMENT FOR THE
2015 ANNUAL GENERAL MEETING OF SHAREHOLDERS
2015 ANNUAL GENERAL MEETING OF SHAREHOLDERS
_________________________________________________________
We are furnishing this proxy statement to holders of record as of 10:00 p.m. BST (5:00 p.m. Eastern time) on
April 30, 2015
, of Class A ordinary shares or Class B ordinary shares, each with nominal value $.01 per share, of Liberty Global plc, a public limited company organized under the laws of England and Wales (
Liberty Global
), in connection with our board of directors soliciting your proxy to vote at our
2015
annual general meeting of shareholders (the
AGM
) or at any adjournment thereof, for the purposes set forth in the accompanying Notice of Annual General Meeting of Shareholders (the
Meeting Notice
). This proxy statement is also being furnished to holders of our non-voting Class C ordinary shares, nominal value $.01 per share, for informational purposes only. Under English law, holders of a company’s ordinary shares are referred to as “members”, but for convenience, they are referred to in this proxy statement as “shareholders”.
As permitted by the Securities and Exchange Commission (
SEC
) rules and regulations in the United States (
U.S.
) and the United Kingdom Companies Act 2006 (the
Companies Act
), instead of mailing a printed copy of our proxy materials, including the form of proxy card and our annual report to each shareholder of record, we are furnishing our proxy materials and annual report to our shareholders over the internet. It is anticipated that the Notice of Internet Availability of Proxy Materials (the
Internet Notice
) will be first mailed to our shareholders on or about
May 7, 2015
. If you received the
Internet Notice
by mail, you will not receive a printed copy of the proxy materials or annual report, unless specifically requested. In addition to the annual report accompanying our proxy materials as required by the rules and regulations of the
SEC
, we are also providing our United Kingdom (
U.K.
) annual report and accounts for the year ended
December 31, 2014
(the
U.K. Report and Accounts
) as required by the
Companies Act
. The
U.K. Report and Accounts
includes the
U.K.
statutory accounts, the
U.K.
statutory Directors’ Report and the U.K. Auditors’ Report and is being made available at the same time and by the same methods as our proxy materials and annual report. If you would like to receive a printed copy of our
U.K. Report and Accounts
, please follow the instructions for requesting such report included in the
Internet Notice
.
As a result of a series of mergers that were completed on June 7, 2013,
Liberty Global
became the publicly-held parent company of the successors by merger of Liberty Global, Inc. (
LGI
) (the predecessor to
Liberty Global
) and Virgin Media Inc. (
Virgin Media
). In this proxy statement, the terms “we”, “our”, “our company”, and “us” or similar references may refer, as the context requires, to
Liberty Global
or its predecessor
LGI
. In this proxy statement, we refer to the transaction with
Virgin Media
as the
Virgin Media Acquisition
.
In this proxy statement, the terms
Class A shares
,
Class B shares
and
Class C shares
, as the case may be, refer to the ordinary shares of
Liberty Global
or the common stock of its predecessor
LGI
. Also, on March 3, 2014,
Liberty Global
effected a share split in the form of a share dividend (the
Dividend
) of its Class C shares to holders of record of its Class A shares, Class B shares and Class C shares as of 5:00 p.m., Eastern time on February 14, 2014, which was the record date for the
Dividend
. In the
Dividend
, holders received one Class C share for each Class A share, Class B share and Class C share held of record as of such record date. Unless otherwise indicated, all
Liberty Global
shares and per share amounts presented herein have been retroactively adjusted to give effect to the
Dividend
, notwithstanding the fact that no Class C shares issued for the
Dividend
were issued and outstanding prior to March 3, 2014. Because we are a
U.K.
company, the
Dividend
constituted a bonus issue under our articles of association and English law. For convenience, we refer to such bonus issue as a dividend.
1
Voting Matters and Board Recommendations
The board of directors recommend that the holders of our Class A shares and Class B shares vote “
FOR
” each of the following resolutions:
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1.
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To elect
Michael T. Fries
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
|
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2.
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To elect
Paul A. Gould
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
|
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3.
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To elect
John C. Malone
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
|
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4.
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To elect
Larry E. Romrell
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
|
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5.
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To approve on an advisory basis the annual report on the implementation of the directors’ compensation policy for the year ended
December 31, 2014
, contained in Appendix A of this proxy statement (in accordance with requirements applicable to
U.K.
companies).
|
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6.
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To ratify the appointment of KPMG LLP (
U.S.
) as our independent auditor for the year ending
December 31, 2015
.
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7.
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To appoint KPMG LLP (
U.K.
) as
Liberty Global
’s
U.K.
statutory auditor under the
Companies Act
(to hold office until the conclusion of the next annual general meeting at which accounts are laid before our company).
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8.
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To authorize the audit committee of our board of directors to determine the
U.K.
statutory auditor’s compensation.
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No shareholder has proposed, in accordance with sections 100 through 102 of our articles of association, any additional resolutions to be brought before the
AGM
.
The
AGM
may be adjourned to another date, time or place for proper purposes, including for the purpose of soliciting additional proxies to vote on the resolutions.
2
QUESTIONS AND ANSWERS ABOUT THE AGM AND VOTING
The questions and answers below highlight only selected information about the
AGM
and how to vote your shares. You should read carefully the entire proxy statement, including the Appendix, before voting.
When and where is the
AGM
?
The
AGM
will be held at 4:00 p.m. BST (11:00 a.m. Eastern time), on
June 25, 2015
at Broadgate West, 9 Appold Street, London EC2A 2AP, telephone number +44 (0)20 7655 5000. In addition, we will have a live video-conference of the
AGM
at the Denver Marriott South at Park Meadows, 10345 Park Meadows Drive, Lone Tree, Colorado 80124.
What is the record date for the
AGM
?
The record date for the
AGM
is 10:00 p.m. BST (5:00 p.m. Eastern time), on
April 30, 2015
.
What is the purpose of the
AGM
?
The purpose of the
AGM
is to consider and vote on each of the resolutions listed in the
Meeting Notice
and more fully described in this proxy statement. The resolutions in the
Meeting Notice
are the only items to be acted upon at the
AGM
. In the event there is a resolution to adjourn or postpone the
AGM
, the officers designated as proxies will have discretion to vote on such resolution, unless the resolution is to adjourn or postpone the
AGM
for the purpose of soliciting additional proxies.
What are the requirements to elect the directors and approve each of the other resolutions?
You may cast your vote for or against resolutions 1 through 8 or abstain from voting your shares on one or more of these resolutions.
The affirmative vote of a simple majority of the votes cast by the holders of our Class A shares and Class B shares (voting together as a single class) is required to approve each of the resolutions. For example, in regard to the election of directors at the
AGM
, a nominee for director will be elected to our board if the votes cast “For” such nominee exceed the votes cast “Against” such nominee’s election.
Resolution 5 regarding the annual report on the implementation of the directors’ compensation policy as reported in this proxy statement (in accordance with requirements applicable to
U.K.
companies) is advisory in nature. Accordingly, the outcome of this advisory vote is not binding on
Liberty Global
, our board of directors or our compensation committee. Our board, however, values the opinions of our shareholders and will consider the outcome of the advisory vote in respect of resolution 5.
How many votes do shareholders have at the
AGM
?
Only holders of record of our Class A shares or our Class B shares as of the record date are entitled to vote at our
AGM
. As of the most recent practicable date, April 15, 2015, we had outstanding and entitled to vote at the meeting 252,040,859 Class A shares and 10,472,517 Class B shares. Our Class A shares and Class B shares are our only voting ordinary shares and vote together as a single class on all matters. Each Class A share has one vote and each Class B share has ten votes on each matter on which holders of ordinary shares of such classes are entitled to vote at the
AGM
. We also had outstanding as of the most recent practicable date, April 15, 2015, 621,214,746 Class C shares, which are non-voting, except where otherwise required by the
Companies Act
and our articles of association.
As of the most recent practicable date, April 15, 2015, we had 361 record holders of Class A shares and 44 record holders of Class B shares. Such amounts do not include the number of shareholders whose ordinary shares are held of record by banks, brokers or other nominees, but include each such institution as one holder.
3
What is the difference between a shareholder of record and a beneficial owner?
These terms describe how your shares are held. If your shares are registered directly in your name with Computershare, our transfer agent, you are a shareholder of record and the proxy materials or the
Internet Notice
are being sent directly to you by
Liberty Global
. If your shares are held in the name of a broker, bank, or other nominee, you are a beneficial owner of the shares held in street name and the proxy materials or the
Internet Notice
are being made available or forwarded to you by your broker, bank, or other nominee, who is treated as the shareholder of record. As the beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote your shares by following the instructions on the proxy card or
Internet Notice
.
What do shareholders need to do to vote on the resolutions?
Voting on the resolutions will be by a poll. If you are a shareholder of record, then, after carefully reading and considering the information contained in this proxy statement, you may appoint a proxy to vote on your behalf. The
Internet Notice
will instruct you as to how you may access and review the information in the proxy materials and how you may submit your proxy to vote over the internet. When you log onto the internet website address, you will receive instructions on how to vote your shares. The internet voting procedures are designed to authenticate votes cast by use of a personal identification number, which will be provided to each voting shareholder separately. Voting through the internet will be voting by proxy. If you receive a paper copy of the proxy materials, you may also follow the instructions contained therein to submit a proxy and to vote either by submitting a paper proxy or over the internet.
If you are a beneficial owner,
you should follow the directions provided by your broker, bank or other nominee as to how to vote your shares or when granting or revoking a proxy.
To be valid, the submission of a proxy via the internet must be received by 6:00 a.m. BST (1:00 a.m. Eastern time) on
June 25, 2015
.
How do I vote my shares that are held in our 401(k) Plans?
If you hold Class A shares through your account in the Liberty Global 401(k) Savings and Stock Ownership Plan (the
401(k) Plan
), which plan is for employees of our subsidiary,
LGI
, the trustee is required to vote your Class A shares as you specify. To allow sufficient time for the trustee to vote your Class A shares, your voting instructions must be received by 10:00 p.m. BST (5:00 p.m. Eastern time) on
June 22, 2015
. If you hold Class A shares through your account in the Liberty Puerto Rico 401(k) Savings Plan, which plan is for employees of our indirect subsidiary Liberty Cablevision of Puerto Rico, LLC, your Class A shares will be voted as you specify. To vote such Class A shares, please follow the instructions provided by the trustee for such plan. The voting instructions for the Puerto Rico plan must be received by the trustee for such plan by 10:00 p.m. BST (5:00 p.m. Eastern time) on
June 22, 2015
.
What if I do not specify a choice for a resolution in my proxy?
All Class A shares and Class B shares properly voted via the internet at or prior to 6:00 a.m. BST (1:00 a.m. Eastern time) on
June 25, 2015
, and all ordinary shares represented by properly executed paper proxies received prior to or at the
AGM
and, in each case, not revoked, will be voted in accordance with the instructions so provided. If you are a shareholder of record and no specific instructions are given, the Class A shares and Class B shares represented by a properly executed proxy will be voted in favor of each of resolutions 1-8.
If you are a beneficial owner, your broker, bank and other nominee may exercise discretion in voting on routine matters, but may not exercise discretion and vote on non-routine matters. Resolutions 6, 7, and 8 are considered routine and your broker, bank or other nominee may, at their discretion, vote on these resolutions without instructions from you. The remaining resolutions 1-5 are considered non-routine matters and thus your broker, bank or other nominee may not vote on these resolutions without instructions from you.
4
What if I respond and indicate that I am abstaining from voting?
A properly submitted proxy marked
“ABSTAIN”
, although counted for purposes of determining whether there is a quorum and for purposes of determining the aggregate voting power and number of ordinary shares represented and entitled to vote at the meeting, will not be treated as votes cast at the
AGM
. Accordingly, an abstention will not be taken into account in determining the outcome on any of the resolutions.
Can I change my vote?
You may revoke (i.e., terminate) your paper proxy at any time prior to its use by delivering a signed notice of revocation or a later dated signed paper proxy or by attending the meeting and voting in person. Attendance at the
AGM
will not in itself constitute the revocation of a proxy. Any written notice of revocation or subsequent proxy should be sent or hand delivered so as to be received at Liberty Global plc, Attention: Secretary, 38 Hans Crescent, London SW1X 0LZ, United Kingdom, at or before the start of the
AGM
. Any revocation of votes submitted via the internet must be submitted by the same method as the corresponding votes, not later than 6:00 a.m. BST (1:00 a.m. Eastern time), on
June 25, 2015
. If your ordinary shares are held in the name of a bank, broker or other nominee, you should contact them to change your vote.
All Class A shares and Class B shares that have been properly voted and not revoked will be voted at the
AGM
.
What are “broker non-votes” and how are they treated?
A broker non-vote occurs when ordinary shares held by a broker, bank or other nominee are represented at the meeting, but the nominee has not received voting instructions from the beneficial owner and does not have the discretion to direct the voting of the ordinary shares on a particular resolution. Ordinary shares represented by broker non-votes will be counted for purposes of determining whether there is a quorum at the meeting but will be deemed ordinary shares not entitled to vote and will not be included for purposes of determining the aggregate voting power and number of ordinary shares represented and entitled to vote on a particular matter.
Who may attend, and who may vote at, the
AGM
?
All shareholders of
Liberty Global
may attend the
AGM
. Only holders of record of our Class A shares and Class B shares, as of 10:00 p.m. BST (5:00 p.m. Eastern time), on
April 30, 2015
, the “record date” for the
AGM
, are entitled to vote at the
AGM
or any adjournment thereof. Holders of Class C shares will not be entitled to vote on any of the resolutions.
If you are a shareholder of record of our Class A shares or Class B shares, you have the right to attend, speak and vote in person at the meeting. If you are a beneficial owner, you may also attend and speak at the meeting. You may not, however, vote your shares held in street name unless you obtain a “proxy” from your broker, bank or other nominee that holds the shares, which gives you the right to vote the shares at the meeting.
Notwithstanding the foregoing, we recommend that you vote by proxy in advance of the
AGM
even if you plan to attend the
AGM
(note that you may change your vote at the
AGM
).
A list of shareholders entitled to vote at the
AGM
will be available at our offices at 38 Hans Crescent, London SW1X 0LZ and at 12300 Liberty Boulevard, Englewood, Colorado 80112, for review by any shareholder, for any purpose germane to the
AGM
, for at least 10 days prior to the
AGM
.
What constitutes a quorum at the
AGM
?
The presence, in person or by proxy, of the holders of a simple majority of the combined voting power of our outstanding Class A shares and Class B shares entitled to vote at the
AGM
is necessary to constitute a quorum at the
AGM
.
5
What is a proxy statement and what is a proxy?
A proxy statement is a document that
SEC
regulations require us to provide you when we ask you to sign a proxy designating individuals to vote on your behalf. A proxy is your legal designation of another person to vote the shares you own in accordance with your instructions. That other person is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. We have designated the following officers as proxies for the
AGM
: Charles H.R. Bracken, Jeremy Evans and John M. Winter.
How can I access the proxy materials over the internet?
Shareholders can access the
Meeting Notice
, proxy statement, the annual report and the
U.K. Report and Accounts
via our website at
www.libertyglobal.com
or as directed in the
Internet Notice
for voting via the website at
www.evisionreports.com/LGP.
The
Internet Notice
will instruct you as to how you may access and review the information in the proxy materials over the internet. The proxy materials, including the form of proxy, relating to the
AGM
will be first made available to shareholders on or about
May 7, 2015
.
A copy of our annual report for the year ended
December 31, 2014
, including our consolidated financial statements for the fiscal year ended
December 31, 2014
, and a copy of our
U.K. Report and Accounts
are available to all holders of our Class A shares and Class B shares entitled to vote at the meeting and to all holders of our Class C shares as of the record date for informational purposes. These reports do not form any part of the material for solicitation of proxies. The annual report and the
U.K. Report and Accounts
are posted at the following website addresses:
www.libertyglobal.com
and
www.envisionreports.com/LGP.
If you received the
Internet Notice
, you will not receive a printed copy of the annual report or the
U.K. Report and Accounts
(unless you request copies of these reports).
What if I receive more than one
Internet Notice
?
If you received multiple
Internet Notice
s, it means you hold your shares in different ways (e.g., trust, custodial accounts, joint tenancy) or in multiple accounts. To ensure that all of your shares are voted, each
Internet Notice
you receive should be voted.
Why did I not receive an
Internet Notice
?
If you elected to receive proxy materials by mail or e-mail for any of your holdings in the past, you were automatically enrolled in the same process for all of your share holdings this year. If you would like to change the method of delivery, please follow the instructions in the
Internet Notice
or in the question “May I choose the method in which I receive future proxy materials?” below.
How can I request paper copies of the proxy materials?
If you received the
Internet Notice
by mail and would like to receive a printed copy of our proxy materials, our annual report and our
U.K. Report and Accounts
please follow the instructions for requesting such materials included in the
Internet Notice
.
May I choose the method in which I receive future proxy materials?
If you are a shareholder of record, you may receive future notices, annual reports and proxy materials electronically. To sign up for electronic delivery, go to
www.computershare-na.com/green
. You may also sign up when you vote by internet at
www.evisionreports.com/LGP
and follow the prompts. Once you sign up, you will no longer receive a printed copy of the notices, annual reports and proxy materials, unless you request them. You may suspend electronic delivery of the notices, annual reports and proxy materials at any time by contacting our transfer agent, Computershare, phone +1(888) 218-4391 if in the
U.S.
and +1(781) 575-3919 if outside the
U.S.
If you are a beneficial owner, you may request electronic access by contacting your broker, bank, or other nominee.
6
What is “householding”?
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” the
Internet Notice
or the proxy materials, as the case may be. This means that only one copy each of the
Internet Notice
or the proxy materials, as the case may be, may have been sent to multiple shareholders in your household. We will promptly deliver a separate copy of these documents to you if you call or email our Investor Relations Department, phone +1(303) 220-6600 or
ir@libertyglobal.com.
If you prefer to receive separate copies of such documents in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee holder, or you may contact us at the above phone number or email address.
Who will pay for the cost of this proxy solicitation?
We will solicit the proxies and will pay the entire cost, if any, for such solicitation. Our directors, officers and employees may solicit proxies by mail, email, telephone or in person. These persons will receive no additional compensation for such services. We have also retained Innisfree M&A Incorporated to assist in the solicitation of proxies at a cost of $20,000, plus reasonable out of pocket expenses. Brokerage houses, nominees, fiduciaries and other custodians will be requested to forward soliciting material to the beneficial owners of ordinary shares held of record by them and will be reimbursed for their reasonable expenses in connection therewith.
When will
Liberty Global
announce the voting results?
We will announce the preliminary voting results at the
AGM
. We will report the final results in a Current Report on Form 8-K that we will file with the
SEC
. We will also post the final results of voting at the
AGM
on our website promptly after the
AGM
.
What do I do if I have additional questions?
If you have any further questions about voting or attending the
AGM
, please call Liberty Global Investor Relations at +1(303) 220-6600 or contact Innisfree M&A Incorporated, who is acting as proxy solicitation agent for the
AGM
, at +1 (877) 825-8906 (within the
U.S.
and Canada) or +1(412) 232-3651. Banks and brokers may call collect at +1(212) 750-5833.
7
CORPORATE GOVERNANCE
Governance Guidelines
Our board has adopted corporate governance guidelines, which are available on our website at
www.libertyglobal.com
. Under the guidelines, our independent directors meet privately at least twice a year in executive session. These executive sessions are generally held in conjunction with a regularly scheduled board meeting. The presiding director for these meetings is currently David E. Rapley, the chairman of the Nominating and Corporate Governance committee. The role of presiding director rotates annually among our nominating and corporate governance committee chair, our audit committee chair and our compensation committee chair.
Director Independence
It is our policy that a majority of the members of our board of directors be independent of our management. For a director to be deemed independent, our board of directors must affirmatively determine that the director has no direct or indirect material relationship with our company other than in his or her capacity as a board member. To assist our board of directors in determining which of our directors qualify as independent for purposes of the NASDAQ Stock Market (the
NASDAQ
) rules, as well as applicable rules and regulations adopted by the
SEC
, the nominating and corporate governance committee of our board follows the Corporate Governance Rules of the
NASDAQ
on the criteria for director independence.
In accordance with these criteria, our board of directors has determined that each of Andrew J. Cole, John P. Cole, Jr., Miranda Curtis, John W. Dick,
Paul A. Gould
, Richard R. Green, David E. Rapley,
Larry E. Romrell
, JC Sparkman and J. David Wargo qualifies as an independent director of our company. In making its determination with respect to Mr. A. Cole, our board noted that until July 2014 he was the Chief Executive Director of the European division of Asurion Corp., which provides services to one of our operations. These services have been provided at market rates and are believed to not be material to Asurion Corp. Also, Mr. A. Cole was not actively involved in that relationship. Based on this review, our board determined Mr. A. Cole is independent of our company.
Our board of directors has appointed
John C. Malone
and
Michael T. Fries
, neither of whom is an independent director, to an executive committee of the board, which is empowered to exercise all the powers and authority of the full board in managing our company between board meetings, except as specifically prohibited by the
Companies Act
or limited by our board of directors.
Board Leadership Structure
Our board of directors has the authority to determine whether the offices of chairman of the board and chief executive officer should be held by the same or different persons. Since June 2005, these offices have been divided between
John C. Malone
and
Michael T. Fries
, respectively, and our board believes that this division continues to be appropriate for our company and its shareholders at this time. The separation of these two roles allows Mr. Fries, our chief executive officer and president (
CEO
), to focus his energies on actively directing the management of our global operations, including the development and execution of approved strategies and business plans, providing leadership to our executives and employees and representing our company to business partners, investors and the media. Our chairman of the board, with his extensive industry background and public company board experience, provides guidance to our
CEO
and strong leadership to our board in its consideration of strategic objectives and associated risks, oversight of our management’s and company’s performance, and monitoring of our corporate governance processes. We have no policy that requires the positions of chairman and
CEO
to be separate or combined and we may reconsider our leadership structure from time to time based on the situation at that time.
Risk Oversight
Our management team is responsible for identifying and managing risk related to our company and its significant business activities. Our board of directors has oversight responsibility for the risk management process implemented by management. Our board, as a whole and through its committees, actively performs this role through regular briefings from and discussions with senior management and periodic in-depth sessions on specific topics. For certain risk topics as discussed below, a board committee will have initial responsibility for exercising this oversight role, with the chair of the relevant committee reporting to the full board as necessary or appropriate.
8
Full Board
At each regularly scheduled board meeting, our board receives reports from our
CEO
and other members of senior management with respect to their business unit or functional area, which include information relating to general and specific risks facing our company. For our business units, these reports will address, among other things, material business-specific risks, such as competitive challenges, regulatory initiatives and risks related to operational execution, as well as macro-economic and political risks. Functional area reports cover our capital structure, liquidity, foreign currency exposure, credit and equity market conditions, developments in technology, legal and regulatory compliance, and talent management and compensation programs. In-depth presentations are made by senior management in connection with our board’s consideration of acquisition opportunities and new strategic initiatives, which include a discussion of material risks to achieving the business case for the proposed transaction or project. Periodically, a more detailed review of a specific country of operation will be provided by the local management team or a specific topic of interest, such as technology developments, will be explored in greater depth, at a regularly scheduled or a special board meeting or during an off-site visit. Our board of directors also makes annual site visits to different countries in which we operate and has periodic strategy retreats with invited members of senior management. Our senior management’s attendance at board meetings, the site visits and strategy retreats provide frequent opportunities for our directors to interact with members of our management team individually to understand and provide input on relevant risk exposures. Also, through its review of our strategies and objectives, budgets and business plans, our board of directors sets the direction for appropriate risk taking within our operations.
Committees
Each board committee considers and addresses risk as it performs its committee responsibilities, and the individual committee chairpersons provide reports to the full board that may include a discussion of risks initially overseen by the committees.
Our audit committee has oversight responsibility for the qualifications and independence of our independent auditor, the performance of our internal audit function and the operation of our ethics compliance reporting process. In addition, our audit committee has oversight responsibility with respect to management’s processes and activities relating to the reliability and integrity of our accounting policies, financial reporting practices and financial statements. The senior officer of our internal audit and compliance group reports to the audit committee and assists the committee with its review of relevant risks within its oversight responsibility and of our internal controls. In particular, such group has the primary responsibility for evaluating management’s internal control over financial reporting, as well as responsibility for monitoring and testing our company-wide policies, procedures and internal controls for other compliance and operational risks included in the annual internal audit plan reviewed and approved by the audit committee. Senior officers of our finance and accounting groups attend all regularly scheduled audit committee meetings and either they or members of their teams provide in-depth reports on a periodic basis and when requested by the audit committee. Such reports include changes in accounting rules that may have a significant effect on our financial statements, tax planning and risks, and risks associated with liquidity, covenant compliance, currency and interest rate hedging positions and stability of counterparties. On an annual basis, such senior officers present to the committee a report on key financial statement risks, the level of such risks and how such risks are being monitored. The audit committee also receives reports on complaints received through our ethics compliance reporting process and the status of investigations into such complaints. Additional functions of the audit committee are described under
Committees of the Board of Directors and Attendance—Audit Committee
below.
Our compensation committee reviews and either approves or recommends to the full board for its approval the compensation programs for members of our senior management, including our executive officers. It also administers, and approves equity grants and performance award programs to certain of our employees under various incentive plans of our company. Until March 1, 2014, at which time the Liberty Global 2014 Incentive Plan (the
2014 Incentive Plan
) became effective, these plans consisted of the Liberty Global Inc. 2005 Incentive Plan (as amended and restated effective June 7, 2013) (the
2005 Incentive Plan
) and the Virgin Media 2010 Incentive Plan (as amended and restated effective June 7, 2013) (the
Virgin Media 2010 Incentive Plan
). As the
2014 Incentive Plan
has now been approved by our shareholders, no further awards will be granted under the
2005 Incentive Plan
or the
Virgin Media 2010 Incentive Plan
. In fulfilling these duties, the compensation committee also has oversight responsibility with respect to risks related to the design and implementation of these programs and awards. To assist the compensation committee in discharging this responsibility, our global human resources group provides reports on the design and administration of incentive programs and the safeguards in effect to avoid encouraging unnecessary or excessive risk taking.
9
Our nominating and corporate governance committee has oversight responsibility with respect to risks related to our governance, including board and director performance and governance guidelines. It supervises annual evaluations of the performance of our board of directors and our individual director nominees. Each of our committees completes its own periodic self-evaluation on performance and reports its findings to our full board when appropriate. Our nominating and corporate governance committee also conducts periodic reviews of our governance guidelines.
Risk Assessment of Compensation Programs
Consistent with
SEC
requirements, we assess annually our company’s compensation programs and have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on our company taken as a whole. Our global human resources group reviewed the performance-based compensation programs for all corporate-level employees in our corporate offices in the
U.K.
, the
U.S.
and the Netherlands and in our European Operations and Latin America divisions and for our country-level managing directors and chief financial officers in our European Operations division. It also reviewed over 100 annual bonus and sales/commission plans in place at our operating companies to identify the presence or lack of certain features that would impact organizational risk. Further, it analyzed total compensation costs (including salaries, commissions, bonuses, severance, fringe benefits and employee training and development costs) for each country of operation as a percentage of that country’s revenue. Finally, it reviewed its own policies and procedures for the administration and governance of these programs for corporate-level employees and for managing directors and chief financial officers in the European Operations division, and related entity-level controls. The scope and results of this review were presented to the compensation committee of our board.
Code of Business Conduct and Code of Ethics
We have adopted a code of business conduct that applies to all of our employees, directors and officers. In addition, we have adopted a code of ethics for our
CEO
and senior financial officers and the chief executive officers and senior financial officers at our operating companies, which constitutes our “code of ethics” within the meaning of Section 406 of the
Sarbanes-Oxley Act
of 2002. Both codes are available on our website at
www.libertyglobal.com
.
Political Contributions
We did not make any political contributions during
2014
. Our code of business conduct prohibits the use of company funds and assets for political contributions to political parties, political party officials and candidates for office, unless approved by our general counsel. Additionally, our charitable giving programs available to employees prohibit political contributions by our company.
Shareholder Communication with Directors
Our shareholders may send communications to our board of directors or to individual directors by mail addressed to the board of directors or to an individual director c/o Liberty Global plc, 38 Hans Crescent, London SW1X 0LZ, United Kingdom, Attn: General Counsel. Communications from our shareholders will be forwarded to our directors on a timely basis.
10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth information, to the extent known by us or ascertainable from public filings, concerning our ordinary shares beneficially owned by each person or entity known by us to own more than 5% of our outstanding Class A shares or our Class B shares.
Except as otherwise indicated in the notes to the table, the security ownership information is given as of
March 31, 2015
, and, in the case of percentage ownership information, is based upon (1) 252,025,447 Class A shares, (2) 10,472,517 Class B shares and (3) 622,180,578 Class C shares, in each case, outstanding on that date. Beneficial ownership of our Class C shares is set forth below only to the extent known by us or ascertainable from public filings. Our Class C shares are, however, non-voting and, therefore, in the case of voting power, are not included.
Ordinary shares issuable on or within 60 days after
March 31, 2015
, upon exercise of options or stock appreciation rights (
SAR
s
), vesting of restricted share units (
RSU
s
), conversion of convertible securities or exchange of exchangeable securities, are deemed to be outstanding and to be beneficially owned by the person holding the options,
SAR
s,
RSU
s or convertible or exchangeable securities for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Also, for purposes of the following presentation, beneficial ownership of our Class B shares, although convertible on a one-for-one basis into our Class A shares, is reported as beneficial ownership of our Class B shares only, and not as beneficial ownership of our Class A shares. The percentage of voting power is presented on an aggregate basis for each person or entity named below.
|
Name and Address of Beneficial Owner
|
Title of Class
|
Amount and Nature of Beneficial Ownership
|
Percent of Class
|
Voting Power
|
||||||||
|
John C. Malone
|
Class A
|
1,186,077
|
|
(1)(2)(3)
|
*
|
|
25.0
|
%
|
||||
|
c/o Liberty Global plc
|
Class B
|
8,787,373
|
|
(2)(4)
|
83.9
|
%
|
||||||
|
38 Hans Crescent
|
Class C
|
13,858,538
|
|
(1)(2)(3)(5)
|
2.2
|
%
|
||||||
|
London SW1X 0LZ U.K.
|
||||||||||||
|
Robert R. Bennett
|
Class A
|
208
|
|
(6)
|
*
|
|
2.8
|
%
|
||||
|
c/o Liberty Media Corporation
|
Class B
|
981,873
|
|
(6)
|
9.4
|
%
|
||||||
|
12300 Liberty Boulevard
|
||||||||||||
|
Englewood, CO 80112
|
||||||||||||
|
BlackRock, Inc.
|
Class A
|
17,214,446
|
|
(7)
|
6.8
|
%
|
4.8
|
%
|
||||
|
55 East 52nd Street
|
Class B
|
—
|
|
—
|
|
|||||||
|
New York, NY 10022
|
||||||||||||
|
Capital World Investors
|
Class A
|
13,858,300
|
|
(8)
|
5.5
|
%
|
3.9
|
%
|
||||
|
A division of Capital Research and
|
Class B
|
—
|
|
—
|
|
|||||||
|
Management Company
|
||||||||||||
|
333 South Hope Street
|
||||||||||||
|
Los Angeles, CA 90071
|
||||||||||||
|
FMR LLC
|
Class A
|
14,220,601
|
|
(9)
|
5.6
|
%
|
4.0
|
%
|
||||
|
245 Summer Street
|
Class B
|
—
|
|
—
|
|
|||||||
|
Boston, MA 02210
|
||||||||||||
___________________
* Less than one percent.
|
(1)
|
Includes
90,303
Class A shares and
680,041
Class C shares held by Mr. Malone’s spouse, as to which shares Mr. Malone has disclaimed beneficial ownership.
|
|
(2)
|
Includes
48,000
Class A shares,
110,148
Class B shares and
369,444
Class C shares held by two trusts managed by an independent trustee, of which the beneficiaries are Mr. Malone’s adult children. Mr. Malone has no pecuniary interest in the trusts, but he retains the right to substitute the assets held by the trusts. Mr. Malone has disclaimed beneficial ownership of the shares held in the trusts. Also, includes
8,677,225
Class B shares and
7,727,225
Class C shares held by a trust with
|
11
respect to which Mr. Malone is the sole trustee and, with his spouse, retains a unitrust interest in the trust (the
Malone Trust
).
|
(3)
|
Includes
95,597
Class A shares and
285,633
Class C shares that are subject to options or
SAR
s, which were exercisable as of, or will be exercisable within 60 days of,
March 31, 2015
.
|
|
(4)
|
Based on the Schedule 13D/A (Amendment No. 7) of Mr. Malone filed with the
SEC
on February 18, 2014, pursuant to a letter agreement dated as of February 13, 2014, among
Michael T. Fries
, our
CEO
and one of our directors, Mr. Malone and the
Malone Trust
have agreed that, for so long as Mr. Fries is employed as a principal executive officer by us or serving on our board of directors, (a) in the event the
Malone Trust
or any permitted transferee (as defined in the letter agreement) is not voting the Class B shares owned by the
Malone Trust
, Mr. Fries will have the right to vote such Class B shares and (b) in the event the
Malone Trust
or any permitted transferee determines to sell such Class B shares, Mr. Fries (individually or through an entity he controls) will have an exclusive right to negotiate to purchase such shares, and if the parties fail to come to an agreement and the
Malone Trust
or any permitted transferee subsequently intends to enter into a sale transaction with a third party, Mr. Fries (or an entity controlled by him) will have a right to match the offer made by such third party.
|
|
(5)
|
Includes
2,200,000
Class C shares subject to a long-dated post-paid variable forward sale contract with an unaffiliated counterparty, divided into
20
components of
110,000
shares each. The components mature on sequential trading days beginning on August 17, 2017 and ending on September 14, 2017.
|
|
(6)
|
The number of Class A shares and the number of Class B shares are based upon the Schedule 13D/A (Amendment No. 1) dated March 6, 2014, filed by Mr. Bennett with the
SEC
on April 3, 2014. The Schedule 13D/A reflects that Mr. Bennett has sole voting and dispositive power over the Class A shares and Class B shares reported. Of the shares reported, the Schedule 13D/A shows Mr. Bennett and his spouse jointly owning
749,539
Class B shares and Hilltop Investments, LLC, which is jointly owned by Mr. Bennett and his spouse, owning
232,334
Class B shares.
|
|
(7)
|
The number of Class A shares is based upon the Schedule 13G/A (Amendment No. 1) for the year ended
December 31, 2014
, filed with the
SEC
on February 9, 2015, by BlackRock, Inc. as a parent holding company of various subsidiaries, which together beneficially own the shares. The Schedule 13G/A reflects that BlackRock, Inc. has sole voting power over
13,829,525
of the Class A shares. It has sole dispositive power over all of the Class A shares.
|
|
(8)
|
The number of Class A shares is based upon the Schedule 13G/A (Amendment No. 1) for the year ended
December 31, 2014
, filed with the
SEC
on February 6, 2015, by Capital World Investors as a result of Capital Research and Management Company acting as investment advisor to various investment companies, including EuroPacific Growth Fund. The Schedule 13G/A reflects that Capital World Investors has sole voting and dispositive power over the Class A shares. EuroPacific Growth Fund filed a Schedule 13G/A for the year ended
December 31, 2014
on February 9, 2015, reporting sole voting and dispositive power over 13,481,000 of the Class A shares reported by Capital World Investors and states under certain circumstances it may vote these shares.
|
|
(9)
|
The number of Class A shares is based upon the Schedule 13G for the year ended
December 31, 2014
, filed with the
SEC
on February 13, 2015, by FMR LLC, as a parent holding company of various subsidiaries, Edward C. Johnson III and Abigail P. Johnson, which together beneficially own the shares. The Schedule 13G reflects that FMR Co. Inc. owns at least 5% of the shares. The family of Edward C. Johnson III, including Abigail P. Johnson, hold 49% of the voting power of FMR LLC. The Schedule 13G reflects that FMR LLC has sole voting power over 409,802 of the Class A shares and sole dispositive power over all of the Class A shares.
|
12
Security Ownership of Management
The following table sets forth information with respect to the beneficial ownership by each of our directors and each of our named executive officers as described below, and by all of our directors and executive officers as a group, of (1) our Class A shares, (2) our Class B shares and (3) our Class C shares.
The security ownership information is given as of
March 31, 2015
, and, in the case of percentage ownership information, is based upon (1) 252,025,447 Class A shares, (2) 10,472,517 Class B shares and (3) 622,180,578 Class C shares, in each case, outstanding on that date. Although beneficial ownership of our Class C shares is set forth below, our Class C shares are non-voting and, therefore, in the case of voting power, are not included. The percentage of voting power is presented on an aggregate basis for each person or group listed below.
Ordinary shares issuable on or within 60 days after
March 31, 2015
, upon exercise of options or
SAR
s, vesting of
RSU
s, conversion of convertible securities or exchange of exchangeable securities, are deemed to be outstanding and to be beneficially owned by the person holding the options,
SAR
s,
RSU
s or convertible or exchangeable securities for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. For purposes of the following presentation, beneficial ownership of our Class B shares, although convertible on a one-for-one basis into our Class A shares, is reported as beneficial ownership of our Class B shares only, and not as beneficial ownership of our Class A shares.
So far as is known to us, the persons indicated below have sole voting power with respect to the ordinary shares indicated as owned by them, except as otherwise stated in the notes to the table. With respect to certain of our executive officers and directors, the number of shares indicated as owned by them includes shares held by the
401(k) Plan
as of
March 31, 2015
, for their respective accounts.
13
|
Name and Address of Beneficial Owner
|
Title of Class
|
Amount and Nature of Beneficial Ownership
|
Percent of Class
|
Voting Power
|
|||||||||
|
John C. Malone
|
Class A
|
1,186,077
|
|
(1)(2)(4)(5)
|
*
|
|
25.0
|
%
|
|||||
|
Chairman of the Board
|
Class B
|
8,787,373
|
|
(2)(3)
|
83.9
|
%
|
|||||||
|
Class C
|
13,858,538
|
|
(1)(2)(4)(5)(6)
|
2.2
|
%
|
||||||||
|
Andrew J. Cole
|
Class A
|
20,447
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
51,305
|
|
(5)
|
*
|
|
||||||||
|
John P. Cole, Jr.
|
Class A
|
60,271
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
179,583
|
|
(5)
|
*
|
|
||||||||
|
Miranda Curtis
|
Class A
|
132,897
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
391,919
|
|
(5)
|
*
|
|
||||||||
|
John W. Dick
|
Class A
|
72,906
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
162,578
|
|
(5)
|
*
|
|
||||||||
|
Michael T. Fries
|
Class A
|
638,233
|
|
(5)(7)(8)
|
*
|
|
1.1
|
%
|
|||||
|
Director, Chief Executive Officer &
|
Class B
|
333,333
|
|
(3)
|
3.2
|
%
|
|||||||
|
President
|
Class C
|
1,879,072
|
|
(4)(5)(7)(8)
|
*
|
|
|||||||
|
Paul A. Gould
|
Class A
|
243,927
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
51,429
|
|
*
|
|
||||||||
|
Class C
|
1,051,065
|
|
(5)
|
*
|
|
||||||||
|
Richard R. Green
|
Class A
|
30,862
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
89,047
|
|
(5)
|
*
|
|
||||||||
|
David E. Rapley
|
Class A
|
10,049
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
42,593
|
|
(5)
|
*
|
|
||||||||
|
Larry E. Romrell
|
Class A
|
30,154
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
73,347
|
|
(5)
|
*
|
|
||||||||
|
JC Sparkman
|
Class A
|
48,466
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
136,756
|
|
(5)
|
*
|
|
||||||||
|
J. David Wargo
|
Class A
|
59,454
|
|
(4)(5)(9)
|
*
|
|
*
|
|
|||||
|
Director
|
Class B
|
—
|
|
—
|
|
||||||||
|
Class C
|
179,156
|
|
(4)(5)(9)
|
*
|
|
||||||||
|
Charles H.R. Bracken
|
Class A
|
107,672
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Executive Vice President & Co-Chief
|
Class B
|
—
|
|
—
|
|
||||||||
|
Financial Officer
|
Class C
|
307,017
|
|
(5)
|
*
|
|
|||||||
|
Bernard G. Dvorak
|
Class A
|
224,501
|
|
(4)(5)(7)(10)
|
*
|
|
*
|
|
|||||
|
Executive Vice President, & Co-Chief
|
Class B
|
—
|
|
—
|
|
||||||||
|
Financial Officer
|
Class C
|
942,589
|
|
(4)(5)(7)(10)
|
*
|
|
|||||||
|
Diederik Karsten
|
Class A
|
154,361
|
|
(5)
|
*
|
|
*
|
|
|||||
|
Executive Vice President, European
|
Class B
|
—
|
|
—
|
|
||||||||
|
Broadband Operations
|
Class C
|
447,084
|
|
(5)
|
*
|
|
|||||||
|
Balan Nair
|
Class A
|
219,153
|
|
(4)(5)(7)
|
*
|
|
*
|
|
|||||
|
Executive Vice President & Chief
|
Class B
|
—
|
|
—
|
|
||||||||
|
Technology Officer
|
Class C
|
648,335
|
|
(4)(5)(7)
|
*
|
|
|||||||
|
All directors and executive officers as a
|
Class A
|
3,312,625
|
|
(11)(12)
|
1.3
|
%
|
26.6
|
%
|
|||||
|
group (17 persons)
|
Class B
|
9,172,135
|
|
(11)
|
87.6
|
%
|
|||||||
|
Class C
|
20,653,715
|
|
(11)(12)
|
3.3
|
%
|
||||||||
___________________
* Less than one percent.
|
(1)
|
Includes
90,303
Class A shares and
680,041
Class C shares held by Mr. Malone’s spouse, as to which shares Mr. Malone has disclaimed beneficial ownership.
|
14
|
(2)
|
Includes
48,000
Class A shares,
110,148
Class B shares and
369,444
Class C shares held by two trusts managed by an independent trustee, of which the beneficiaries are Mr. Malone’s adult children. Mr. Malone has no pecuniary interest in the trusts, but he retains the right to substitute the assets held by the trusts. Mr. Malone has disclaimed beneficial ownership of the shares held in the trusts. Also, includes 8,677,225 Class B shares and 7,727,225 Class C shares held by the
Malone Trust
.
|
|
(3)
|
Based on the Schedule 13D/A (Amendment No. 7) of Mr. Malone, pursuant to a letter agreement dated as of February 13, 2014, among
Michael T. Fries
, our
CEO
and one of our directors, Mr. Malone and the
Malone Trust
agreed that, for so long as Mr. Fries is employed as a principal executive officer by us or serving on our board of directors, (a) in the event the
Malone Trust
or any permitted transferee (as defined in the letter agreement) is not voting the Class B shares owned by the
Malone Trust
, Mr. Fries will have the right to vote such Class B shares and (b) in the event the
Malone Trust
or any permitted transferee determines to sell such Class B shares, Mr. Fries (individually or through an entity he controls) will have an exclusive right to negotiate to purchase such shares, and if the parties fail to come to an agreement and the
Malone Trust
or any permitted transferee subsequently intends to enter into a sale transaction with a third party, Mr. Fries (or an entity controlled by him) will have a right to match the offer made by such third party.
|
|
(4)
|
Includes shares pledged to the indicated entities in support of one or more lines of credit or margin accounts extended by such entities:
|
|
No. of Shares Pledged
|
||||||||
|
Owner
|
Class A
|
Class C
|
Entity Holding the Shares
|
|||||
|
John C. Malone
|
90,303
|
|
2,066,241
|
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated
|
|||
|
John C. Malone
|
952,177
|
|
1,210,195
|
|
Fidelity Brokerage Services, LLC
|
|||
|
Michael T. Fries
|
—
|
|
193,145
|
|
Morgan Stanley Inc.
|
|||
|
J. David Wargo
|
4,135
|
|
12,703
|
|
UBS Financial Services, Inc.
|
|||
|
Bernard G. Dvorak
|
4,216
|
|
264,496
|
|
UBS Financial Services, Inc.
|
|||
|
Balan Nair
|
80,933
|
|
277,980
|
|
UBS Financial Services, Inc.
|
|||
|
(5)
|
Includes shares that are subject to options or
SAR
s, which were exercisable as of, or will be exercisable within 60 days of,
March 31, 2015
, as follows:
|
|
Owner
|
Class A
|
Class C
|
||||
|
John C. Malone
|
95,597
|
|
285,633
|
|
||
|
Andrew J. Cole
|
17,963
|
|
45,763
|
|
||
|
John P. Cole, Jr.
|
50,136
|
|
150,816
|
|
||
|
Miranda Curtis
|
6,542
|
|
20,030
|
|
||
|
John W. Dick
|
56,542
|
|
120,030
|
|
||
|
Michael T. Fries
|
214,874
|
|
596,618
|
|
||
|
Paul A. Gould
|
45,136
|
|
135,816
|
|
||
|
Richard R. Green
|
26,542
|
|
80,030
|
|
||
|
David E. Rapley
|
8,000
|
|
24,408
|
|
||
|
Larry E. Romrell
|
3,867
|
|
11,981
|
|
||
|
JC Sparkman
|
30,136
|
|
90,816
|
|
||
|
J. David Wargo
|
55,136
|
|
165,816
|
|
||
|
Charles H.R. Bracken
|
102,532
|
|
291,596
|
|
||
|
Bernard G. Dvorak
|
162,004
|
|
470,012
|
|
||
|
Diederik Karsten
|
135,814
|
|
391,442
|
|
||
|
Balan Nair
|
128,020
|
|
368,060
|
|
||
|
(6)
|
Includes
2,200,000
Class C shares subject to a long-dated post-paid variable forward sale contract with an unaffiliated counterparty, divided into
20
components of
110,000
shares each. The components mature on sequential trading days beginning on August 17, 2017 and ending on September 14, 2017.
|
15
|
(7)
|
Includes shares held in the
401(k) Plan
as follows:
|
|
Owner
|
Class A
|
Class C
|
||||
|
Michael T. Fries
|
1,977
|
|
13,063
|
|
||
|
Bernard G. Dvorak
|
510
|
|
11,005
|
|
||
|
Balan Nair
|
—
|
|
6,205
|
|
||
|
(8)
|
Includes
46,200
Class A shares and
283,360
Class C shares held by a trust managed by an independent trustee, of which the beneficiaries are Mr. Fries’ minor children. Mr. Fries has no pecuniary interest in the trust, but he retains the right to substitute the assets held by the trust.
|
|
(9)
|
Includes
158
Class A shares and
556
Class C shares held in various accounts managed by Mr. Wargo, as to which shares Mr. Wargo has disclaimed beneficial ownership. Also includes
32
Class C shares held by Mr. Wargo’s spouse, as to which Mr. Wargo has disclaimed beneficial ownership.
|
|
(10)
|
Includes the following securities held by Mr. Dvorak’s spouse, as to which Mr. Dvorak has disclaimed beneficial ownership: (a)
3,418
Class A shares and
91,272
Class C shares; (b)
46,524
Class A shares and
134,772
Class C shares that are subject to options or
SAR
s, which were exercisable as of, or will be exercisable within 60 days of,
March 31, 2015
; and (c)
1,551
Class A shares and
14,076
Class C shares held in the
401(k) Plan
.
|
|
(11)
|
Includes
188,079
Class A shares,
110,148
Class B shares and
1,424,705
Class C shares held by relatives of certain directors and executive officers or held pursuant to certain trust arrangements or in managed accounts, as to which shares beneficial ownership has been disclaimed.
|
|
(12)
|
Includes
1,236,095
Class A shares and
3,523,299
Class C shares that are subject to options or
SAR
s, which were exercisable as of, or will be exercisable or vest within 60 days of,
March 31, 2015
;
4,038
Class A shares and
46,014
Class C shares held by the
401(k) Plan
; and
1,132,676
Class A shares and
4,036,509
Class C shares pledged in support of various lines of credit or margin accounts.
|
Change in Control
We know of no arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of our company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
Exchange Act
), requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the
SEC
. Officers, directors and greater than 10% beneficial owners are required by
SEC
regulation to furnish us with copies of all Section 16 forms they file.
Based solely on a review of the copies of the Forms 3, 4 and 5 and amendments to those forms furnished to us with respect to our most recent fiscal year, or representations that no Forms 5 were required, we believe that, during the year ended
December 31, 2014
, our executive officers, directors and greater than 10% beneficial owners have complied with all Section 16(a) filing requirements applicable to them.
16
RESOLUTIONS 1, 2, 3 AND 4
|
1.
|
To elect
Michael T. Fries
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
|
|
2.
|
To elect
Paul A. Gould
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
|
|
3.
|
To elect
John C. Malone
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
|
|
4.
|
To elect
Larry E. Romrell
as a director of
Liberty Global
for a term expiring at the annual general meeting to be held in
2018
.
|
Our board of directors currently consists of 12 directors, divided among three classes. Directors in each class serve staggered three-year terms. Our Class II directors, whose term will expire at the
AGM
, are Michael T. Fries,
Paul A. Gould
,
John C. Malone
and
Larry E. Romrell
. These directors are nominated for re-election to our board to continue to serve as Class II directors, and we have been informed that each of them is willing to serve as a director of our company. The term of the Class II directors who are elected at the
AGM
will expire at the annual general meeting of our shareholders in the year
2018
. Our Class III directors, whose term will expire at the annual general meeting of our shareholders in the year 2016, are Andrew J. Cole, John P. Cole, Jr., Richard R. Green and David E. Rapley. Our Class I directors, whose term will expire at the annual general meeting of our shareholders in the year 2017, are Miranda Curtis, John W. Dick, JC Sparkman and J. David Wargo.
If any nominee should decline re-election or should become unable to serve as a director of our company for any reason before re-election, a substitute nominee will be designated by our board of directors.
We provide below biographical information with respect to the four nominees for election as directors and the eight directors of our company whose term of office will continue after the
AGM
, including the age of each person, the positions with our company or principal occupation of each person, individual skills and experiences, certain other directorships held and the year each person became a director of our company. The number of our ordinary shares beneficially owned by each director, as of
March 31, 2015
, is set forth in this proxy statement under the caption
Security Ownership of Certain Beneficial Owners and Management—Security Ownership of Management
. As indicated in the biographies, our board believes the skills and experiences of each of our nominees, as well as our other directors, qualify them to serve as one of our directors.
Vote and Recommendation
We have majority voting for the election of directors. When a quorum is present, the affirmative vote of a simple majority of the votes cast by the holders of our Class A shares and Class B shares (voting together as a single class) is required to elect Messrs. Fries, Gould, Malone and Romrell as Class II members of our board of directors, as provided in resolutions 1, 2, 3 and 4, respectively.
Our board of directors recommends a vote “
FOR
” the election of each nominee to our board of directors.
Nominees for Election of Directors
Michael T. Fries
, 52, has served as our chief executive officer, president and vice chairman of our board since June 2005. He was chief executive officer of United Global Com, Inc. and its predecessors (now known as UnitedGlobalCom LLC) (
UGC
) from January 2004 until the businesses of
UGC
and LGI International, Inc. (
LGI International
) were combined under our predecessor
LGI
.
Mr. Fries has nearly 30 years of experience in the cable and media industry, starting with the investment banking division of PaineWebber Incorporated where he specialized in domestic and international transactions for media companies before joining the management team of
UGC
’s predecessor in 1990 shortly after its formation. As senior vice president, Business Development, of
UGC
’s predecessor from 1990 to 1995, Mr. Fries was responsible for managing its global acquisitions and new business development functions, which included investing in, acquiring or launching multichannel distribution or programming businesses in over 20 countries around the world. From 1995 to 1998, he was president of the Asia/Pacific division and, among other duties, managed the formation and operational launch of the business and subsequent flotation of the stock of Austar United Communications Ltd., then an Australia public company (
Austar
) and one of our subsidiaries. He was promoted to president
17
and chief operating officer in 1998 and chief executive officer of
UGC
in 2004. During this period, he oversaw
UGC
’s growth across all business units and geographic territories into a leading international broadband communications provider. He also managed
UGC
’s financial and strategic initiatives, including various transactions with Liberty Interactive Corporation, then known as Liberty Media Corporation (
LIC
), and
LGI International
from 1998 to 2005 that led up to and culminated in the formation of our predecessor
LGI
.
In addition to serving as a director of
UGC
and its predecessor from 1999 to 2005, Mr. Fries was chairman of the supervisory boards of two of its publicly held European subsidiaries, United Pan-Europe Communications N.V. (
UPC
) (1998 – 2003) and Priority Telecom N.V. (2002 – 2006). He also served as executive chairman of
Austar
from 1999 until 2003, and thereafter as non-executive chairman of
Austar
until its sale in May 2012. Mr. Fries is a director of Cable Television Laboratories, Inc., a non-profit cable television industry research and development consortium (
CableLabs
®
), The Cable Center, the non-profit educational arm of the
U.S.
cable industry, and various other non-profit and privately held corporate organizations. He serves as a Telecom Governor and Steering Committee member of the World Economic Forum. Mr. Fries received his B.A. from Wesleyan University (where he is a member of the President’s Advisory Council) and his M.B.A. from Columbia University.
Mr. Fries’ significant executive experience building and managing international distribution and programming businesses, in-depth knowledge of all aspects of our current global business and responsibility for setting the strategic, financial and operational direction for our company contribute an insider’s perspective to our board’s consideration of the strategic, operational and financial challenges and opportunities of our business, and strengthen our board’s collective qualifications, skills and attributes.
Paul A. Gould
, 69, has served as one of our directors since June 2005 and is the chair of the audit committee and a member of the nominating and corporate governance and the succession planning committees of our board. He was a director of
UGC
from January 2004 until
UGC
’s business combination with
LGI International
.
Mr. Gould has over 40 years of experience in the investment banking industry. He is a managing director of Allen & Company, LLC, a position that he has held for more than the last five years, and is a senior member of Allen & Company’s mergers and acquisitions advisory practice. In that capacity, he has served as a financial advisor to many Fortune 500 companies, principally in the media and entertainment industries. Mr. Gould joined Allen & Company in 1972. In 1975, he established Allen Investment Management, which manages capital for endowments, pension funds and family offices.
Mr. Gould is also an experienced board member, having served on the boards of several public companies, including DIRECTV (2009 – 2010),
LIC
(and its predecessor) (2001 – 2009), Discovery Holding Company (2005 – 2008), The DirecTV Group, Inc. (2009), On Command Corporation (2002 – 2003) and Sunburst Hospitality Corporation (1996 – 2001). Currently, he is a director of Ampco-Pittsburgh Corporation (since 2002), Discovery Communications, Inc. (since September 2008) and the private company O3B Networks Limited. His committee experience includes audit, executive, compensation, corporate governance and investment. In addition, Mr. Gould serves on the board of trustees of Cornell University, where he is the chair of its investment committee; serves as an overseer for Weill Cornell Medical College; and serves on the boards of the Wildlife Conservation Society, where he is the chair of its investment committee, and the New School University. He is also a member of the advisory committee to the International Monetary Fund’s investment committee. He attended Cornell University and received his B.S. (Biochemistry) from Fairleigh Dickinson University.
Mr. Gould’s extensive background in investment banking and as a public company board member and his particular knowledge and experience as a financial advisor for mergers and acquisitions and in accounting, finance and capital markets contribute to our board’s evaluation of acquisition, divestiture and financing opportunities and strategies and consideration of our capital structure, budgets and business plans, provide insight into other public company board practices and strengthen our board’s collective qualifications, skills and attributes.
John C. Malone
, 74, has served as our chairman of the board and as one of our directors since its inception and is a member of the executive and the succession planning committees of our board. He was president, chief executive officer and chairman of the board of
LGI International
, from March 2004 to June 2005. Mr. Malone served as a director of
UGC
and its predecessors from November 1999 to July 2013.
Mr. Malone is an experienced business executive, having served as the chief executive officer of Tele-Communications, Inc. (
TCI
) for over 25 years until its acquisition by AT&T Corporation in 1999. During that period, he successfully led
TCI
as it grew through acquisitions and construction into the largest multiple cable system operator in the
U.S.
, invested in and nurtured
18
the development of unique cable television programming, including the
Discovery Channel
,
QVC
and
Starz/Encore
, expanded through joint ventures into international cable operations in the
U.K.
(Telewest Communications plc), Japan (Jupiter Telecommunications Co. Ltd. (
J:COM
)) and other countries, and invested in new technologies, including high speed internet, alternative telephony providers, wireless personal communications services and direct-to-home satellite.
Currently Mr. Malone is chairman of the board and a director of Liberty Media Corporation (formerly named Liberty Spinco, Inc.) (
LMC
), which owns interests in a broad range of media, communications and entertainment businesses, and of
LIC
, which owns interests in a broad range of video and online commerce businesses. He has held these positions with
LMC
,
LIC
and their predecessor companies since 1990 and was also chief executive officer of
LIC
(then known as Liberty Media Corporation) from August 2005 to February 2006. His other public directorships currently include Lions Gate Entertainment Corp. (since March 2015), Charter Communications, Inc. (since May 2013), Discovery Communications, Inc. (since September 2008), Expedia, Inc. (since December 2012, having previously served as a director from August 2005 to November 2012), Liberty TripAdvisor Holdings, Inc. (since August 2014) and Liberty Broadband Corporation (since November 2014). Mr. Malone has also been a director of Sirius XM Radio, Inc. (2009 – 2013), Ascent Capital Group, Inc. (2010 – 2012), Live Nation Entertainment, Inc., where he was also interim chairman of the board (2010 – 2011), DIRECTV, where he was also chairman of the board (2009 – 2010), IAC/InterActiveCorp. (2006 – 2010), Discovery Holding Company (2005 – 2008), The DirecTV Group, Inc. (2008 – 2009) and The Bank of New York Company, Inc. (2005 – 2007).
Mr. Malone is the chairman emeritus of
CableLabs
®
and an honorary board member of The Cable Center. He also served as a director of the National Cable Television Association from 1974 to 1977 and 1980 to 1993. Mr. Malone holds a Bachelor’s Degree in electrical engineering and economics from Yale University and a Master’s Degree in industrial management and a Ph.D. in operations research from Johns Hopkins University.
Mr. Malone’s proven business acumen as a long time chief executive of large, complex organizations and his extensive knowledge and experience in the cable television, telecommunications, media and programming industries are a valuable resource to our board in evaluating the challenges and opportunities of our global business and our strategic planning and strengthen our board’s collective qualifications, skills and attributes.
Larry E. Romrell
, 75, has served as one of our directors since June 2005 and is a member of the compensation and the nominating and corporate governance committees of our board. He was a director of
LGI International
from May 2004 to June 2005. Mr. Romrell has over 30 years of experience in the telecommunications industry. He was an executive vice president of
TCI
from January 1994 to March 1999, when it was acquired by AT&T Corporation, and a senior vice president of
TCI
from 1991 to 1994. Prior to becoming an executive officer at
TCI
, Mr. Romrell was president and chief executive officer of WestMarc Communications, Inc., a subsidiary of
TCI
engaged in the cable television and common carrier microwave communications businesses, and held various executive positions with that company (formerly known as Western Tele-Communications, Inc.) for almost 20 years, including when it was a separate public company. As an executive at
TCI
, Mr. Romrell oversaw
TCI
’s investments in and development of companies engaged in other telecommunications businesses, including At Home Corporation (
@Home
), a provider of high speed multimedia internet services, and Teleport Communications Group Inc. (
TCG
), a competitive local exchange carrier.
Mr. Romrell is an experienced public company board member, having served on the boards of Ascent Capital Group, Inc.’s predecessor (2000 – 2003), TV Guide, Inc. (and its predecessor) (1996 – 2000), Arris Group, Inc. (2000 – 2003), General Communication Inc. (1980 – 2001), as well as
@Home
and
TCG
. He currently is a director of
LMC
and
LIC
, positions he has held with
LMC
,
LIC
and their predecessors since 2001, and serves on the audit and nominating and governance committees of each of
LMC
’s and
LIC
’s boards. Mr. Romrell also serves as a director of Liberty TripAdvisor Holdings, Inc. (since August 2014) and serves on its compensation committee and its nominating and corporate governance committee. Formerly, he was a member of the compensation committee of
LIC
’s board. Mr. Romrell is involved in numerous philanthropic activities. Mr. Romrell’s extensive business background and his particular knowledge and experience in telecommunications technology and board practices of other public companies contribute to our board’s consideration of operational and technological developments and strategies, provide insight into other public company board practices and strengthen our board’s collective qualifications, skills and attributes.
19
Directors Whose Term Expires in 2016
Andrew J. Cole
, 48, became a director in June 2013 in connection with our acquisition of
Virgin Media
and is a member of the nominating and corporate governance committee of our board. Until June 2013, he was a director of
Virgin Media
, then a public company, for almost five years where he also served on the compensation and the nominating and corporate governance committees of the
Virgin Media
board.
Mr. Cole has served as the chief executive officer of Glow Financial Services Ltd., a private
U.K.
company, since July 2014. It is a full service provider of handset and home device financing for wireless carriers and cable companies. Until July 2014, he was the chief executive director of the European division of Asurion Corp., a private entity. He assumed that role in May 2009, after serving as chief marketing officer and senior vice president at Asurion Corp. from April 2007. Asurion Corp. is the world’s largest technology protection company. He is also a director of Arundel Capital, a New York based hedge fund focused on the health-care industry. Mr. Cole has over 20 years of experience working in the telecommunications and media industry with a particular depth of experience in the mobile sector. He has consulted with Orange, Google, Apple, Verizon, Slovakia Telecom and others when he was president of CSMG Advents, a strategic consultancy that focused on the telecommunications media and entertainment markets, from October 2005 to April 2007. Mr. Cole received his Bachelor’s and Master’s Degrees from Bristol University and Oxford University, respectively.
Mr. Cole’s extensive background in the telecommunication and media industry and his particular knowledge and experience in the mobile sector as well as his expertise in marketing and strategy contributes to our board’s evaluation of our mobile business and acquisition and divestiture opportunities and strategies and our capital structure and strengthens our board’s collective qualifications, skills and attributes.
John P. Cole, Jr.
, 85, has served as one of our directors since June 2005 and is a member of the compensation and the nominating and corporate governance committees of our board. He was a director of
UGC
, from March 1998 until
UGC
’s business combination with
LGI International
. From February 1999 to September 2003, he was also a member of the supervisory board of
UGC
’s publicly-held subsidiary,
UPC
. His prior public company board experience also includes serving as a director of Century Communications Corp., at the time a large
U.S.
multiple cable system operator, from October 1997 to October 1999 when it was acquired by another corporation.
Mr. Cole has over 40 years of experience in
U.S.
legal/regulatory and government affairs. In 1966, he co-founded the Washington, D.C. law firm of Cole, Raywid and Braverman LLP, which specialized in all aspects of communications and media law. As a senior partner in the firm, Mr. Cole focused his legal expertise in the area of cable television regulation. Mr. Cole retired as a partner in 2007 following his firm’s merger with the law firm of Davis Wright Tremaine LLP. Mr. Cole is a graduate of Auburn University (B.S. Industrial Management) and George Washington University School of Law.
Mr. Cole’s significant executive and legal experience as a founder and long-time senior partner of a law firm, his more than 10 years of service as a director or supervisory board member of
U.S.
and international cable television companies and his particular knowledge and experience in cable television regulation contribute to our board’s consideration of legal and regulatory developments and risks in the countries in which we operate and strengthen our board’s collective qualifications, skills and attributes.
Richard R. Green
, 77, has served as one of our directors since December 2008 and is a member of the nominating and corporate governance committee of our board. For over 20 years, Mr. Green served as president and chief executive officer of
CableLabs
®
before retiring in December 2009. While at
CableLabs
®
, Mr. Green oversaw the development of DOCSIS technology, the establishment of common specifications for digital voice and the deployment of interactive television, among other technologies for the cable industry. Prior to joining
CableLabs
®
, he was a senior vice president at PBS (1984 – 1988), where he was instrumental in establishing PBS as a leader in high definition television and digital audio transmission technology, and served as a director of CBS’s Advanced Television Technology Laboratory (1980 – 1983), where he managed and produced the first high definition television programs in December 1981, among other accomplishments. Mr. Green is the author of over 55 technical papers on a variety of topics. In 2012, Mr. Green received the Charles F. Jenkins Lifetime Achievement Award from the Academy of Television Arts & Sciences for the Primetime Emmy Engineering Awards.
Mr. Green is a professor and the director of the Center for Technology Innovation at the University of Denver. He is also a director of Shaw Communications, Inc. (
Shaw
), a telecommunications company based in Canada, where he is also a member of the audit committee, and a director of Jones/NCTI, a Jones Knowledge Company, which is a workforce performance solutions
20
company for individuals and broadband companies. He is also a member of the board of directors of Liberty Broadband Corporation (since November 2014), where he serves as chairman of its nominating and corporate governance committee and as a member of its audit committee and compensation committee. He is also a member of the boards of directors of several non-profit institutions and is an honorary board member of The Cable Center. In addition, he is a member of the Federal Communications Commission’s Technical Advisory Council and a fellow of the Society of Motion Picture and Television Engineers. He previously was a member of the International Telecommunication Union, a United Nations consultative committee charged with the responsibility for recommending worldwide standards for advanced television services and past chairman of Study Group 9 of such committee. Mr. Green received his B.S. (Physics) from Colorado College, his M.S. (Physics) from the State University of New York and a Ph.D. from the University of Washington, where he specialized in astrophysics.
Mr. Green’s extensive professional and executive background and his particular knowledge and experience in the complex and rapidly changing field of technology for broadband communications services contribute to our board’s evaluation of technological initiatives and challenges and strengthen our board’s collective qualifications, skills and attributes.
David E. Rapley
, 73, has served as one of our directors since June 2005 and is the chair of the nominating and corporate governance committee and a member of the succession planning committee of our board. He was a director of
LGI International
from May 2004 to June 2005.
Mr. Rapley has over 30 years of experience as a founder, executive, manager and as a director of various engineering firms. He founded Rapley Engineering in 1985 and, as its president and chief executive officer, oversaw its development into a full service engineering firm at the time of its sale to VECO Corporation (
VECO
) in 1998. Following the sale, Mr. Rapley served as executive vice president, Engineering of
VECO
, an Alaska-based firm providing engineering, design, construction and project management services to the energy, chemical and process industries domestically and internationally, until his retirement in December 2001. Until June 2013, Mr. Rapley was a director of Merrick & Co., a private firm providing engineering and other services to domestic and international clients. From 2006 to 2011, Mr. Rapley was chairman of the board of Merrick Canada ULC. Mr. Rapley has authored technical papers on engineering processes and computer systems. He is a graduate of Hendon College of Technology (England), with a degree in mechanical engineering.
Mr. Rapley is also a director of
LMC
and of
LIC
. He has been a director of
LMC
,
LIC
and their predecessors since 2002. He currently serves on
LMC
’s compensation committee and is the chairman of its nominating and governance committee, and he currently serves on
LIC
’s audit committee and its compensation committee and is the chairman of its nominating and governance committee.
Mr. Rapley’s significant professional and business background as an engineer, entrepreneur and executive contributes to our board’s consideration of technological initiatives and challenges and strengthens our board’s collective qualifications, skills and attributes.
Directors Whose Term Expires in 2017
Miranda Curtis
, 59, has served as one of our directors since June 2010 and is a member of the audit, the nominating and corporate governance and the succession planning committees of our board. Until March 31, 2010, Ms. Curtis was the president of our
Liberty Global
Japan division. She served as senior vice president of one of our predecessors,
LGI International
, and president of its Asia division from March 2004 to June 2005.
Ms. Curtis has over 30 years of experience in the international media and telecommunications industry, starting with the international distribution of programming for the BBC before moving to the
U.K.
cable industry. She joined the predecessor of our subsidiary, Liberty Media International Holdings, LLC (
LMINT
), in 1992 when it was formed as the international division of
TCI
. Thereafter, she assumed executive positions of increasing responsibility at this company, with a primary focus on business development and the management of complex international distribution and content joint ventures. As executive vice president (1996 – 1999) and then president (1999 – 2004) of
LMINT
, she oversaw all cable and programming investments of
TCI
and subsequently
LIC
(then known as Liberty Media Corporation), in Japan, the
U.K.
and Continental Europe. She was responsible for the negotiation, oversight and management of a joint venture with Sumitomo Corporation that led to the formation of
J:COM
, the largest multiple cable system operator in Japan, and Jupiter TV Co., Ltd., a leading provider of content services to the Japanese cable and satellite industries, as well as other content ventures in Europe and Asia. Ms. Curtis’ employment as an officer of our company terminated following the sale of substantially all of our investments in Japan in February 2010.
21
Ms. Curtis’ public company board experiences include serving as a non-executive director of Telewest Communications plc (1998 – 2002), at the time the second largest multiple cable system operator in the
U.K.
, Flextech plc (1998 – 2000), at the time a leading supplier of basic tier channels to the
U.K.
pay television market,
J:COM
(2005 – March 2010), and National Express Group plc, an international public transport group (2008 – 2011). She was also a member of the compensation committee for each of Telewest Communications plc and
J:COM
. Currently, she is a director of the
U.K.
public company Marks & Spencer plc, a retailer of clothing and home products, and chairman of the board of Waterstones Booksellers Ltd, a book retailer. She is also a member of the Board of Governors of the Institute for Government, a non-profit organization in the
U.K.
working to increase government effectiveness, and is involved in a number of philanthropic organizations. She is a graduate of the University of Durham, England.
Ms. Curtis’ significant business and executive background in the media and telecommunication industries and her particular knowledge of, and experience with all aspects of international cable television operations and content distribution contribute to our board’s consideration of operational developments and strategies and strengthen our board’s collective qualifications, skills and attributes.
John W. Dick
, 77, has served as one of our directors since June 2005 and is a member of the audit and the nominating and corporate governance committees of our board. He was a director of
UGC
from March 2003 until
UGC
’s business combination with
LGI International
. Prior to that, he was a member of the supervisory board of
UGC
’s publicly-held subsidiary,
UPC
, from May 2001 to September 2003. Mr. Dick has over 40 years of experience as a founder, director and chairman of public and private companies in a variety of industries, including real estate, automotive, telecommunications, oil exploration and international shipping based in a number of countries and regions, including the
U.S.
, Canada, Europe, Australia, Russia, China and Africa.
Currently, Mr. Dick serves as a director and non-executive chairman of the board of O3B Networks Ltd., a private company which is building a new fiber-quality, satellite-based, global internet backbone connecting telecommunications operators and internet service providers in emerging markets with the networks of developed countries. He also served as a director of
Austar
from 2002 until its sale in May
2012
. In addition, Mr. Dick was a director and non-executive chairman of the board of Terracom Broadband, a private company that developed and operated a fiber-based internet network and a digital cellular network in Rwanda, and following its purchase by Terracom Broadband, of Rwandatel, the incumbent telephone company in Rwanda, until the sale of these companies in 2007. From 1984 to December 2007, he was a director and non-executive chairman of the board of Hooper Industries Group, a privately held
U.K.
group consisting of: Hooper and Co (Coachbuilders) Ltd. (building special bodied Rolls Royce and Bentley motorcars), Hooper Industries (China) (providing industrial products and components to Europe and the
U.S.
) and, until 2002, MetroCab UK (manufacturing London taxicabs) and Moscab (a joint venture with the Moscow city government to produce Metrocabs for Russia). Mr. Dick is a graduate of Wheaton College, Illinois (B.A. Political Science and Economics) and University of Toronto School of Law.
Mr. Dick’s extensive business background in a variety of industries and countries and his particular knowledge as an experienced board member of various entities that have evaluated and developed business opportunities in international markets contribute to our board’s consideration of strategic options and strengthen our board’s collective qualifications, skills and attributes.
JC Sparkman
, 82, has served as one of our directors since June 2005 and is the chair of the compensation committee and a member of the nominating and corporate governance and the succession planning committees of our board. He was a director of
LGI International
, from November 2004 to June 2005. Mr. Sparkman has over 30 years of experience in the cable television industry. He was executive vice president and chief operating officer of
TCI
for eight years until his retirement in 1995. During his over 26 years with
TCI
, he held various management positions of increasing responsibility, overseeing
TCI
’s cable operations as that company grew through acquisitions, construction of new networks and expansion of existing networks into the largest multiple cable system operator in the
U.S.
at the time of his retirement. In September 1999, he co-founded Broadband Services, Inc., a provider of asset management, logistics, installation and repair services for telecommunications service providers and equipment manufacturers domestically and internationally. He served as chairman of the board and co-chief executive officer of Broadband Services until December 2003.
Mr. Sparkman is an experienced public company board member. Since 1994, he has been a director of
Shaw
, and he is a member of the executive and human resources and compensation committees of
Shaw
’s board. He is also a director and member of the compensation committee of Universal Electronics, Inc. (since 1998), a global leader in wireless control technology.
22
Mr. Sparkman’s significant background as an executive and board member and his particular knowledge of, and experience with, all aspects of cable television operations contribute to our board’s consideration of operational developments and strategies, provide insight into other public company board practices and strengthen our board’s collective qualifications, skills and attributes.
J. David Wargo
, 61, has served as one of our directors since June 2005 and is a member of the audit and the nominating and corporate governance committees of our board. He was a director of
LGI International
, from May 2004 to June 2005. Mr. Wargo has over 35 years of experience in investment research, analysis and management. He is the founder and president of Wargo & Company, Inc., a private company specializing in investing in the communications industry since 1993. Mr. Wargo is a co-founder and was a member of New Mountain Capital, LLC from 2000 to 2008. Prior to starting Wargo & Company, he was a managing director and senior analyst of The Putnam Companies (1989 – 1992), senior vice president and a partner in Marble Arch Partners (1985 – 1989) and senior analyst and a partner in State Street Research and Management Company (1978 – 1985). Mr. Wargo received his B.S. (Physics) and M.S. (Nuclear Engineering) from Massachusetts Institute of Technology (
M.I.T.
) and an M.B.A. from
M.I.T.
’s Sloan School of Management.
Mr. Wargo is also an experienced board member, having served on the boards of several public companies, including Discovery Holding Company (2005 – 2008), Fun Technologies Inc. (2007 – 2008), OpenTV Corp. (2002 – 2007), On Command Corporation (1998 – 2003), Gemstar-TV Guide International, Inc. (2000 – 2001) and TV Guide, Inc. (and its predecessor) (1996 – 2000). He currently is a director of (a) Discovery Communications, Inc. (since September 2008), where he is also a member of the audit committee and chair of the nominating and corporate governance committee, (b) Strayer Education, Inc. (since March 2001), where he is chairman of the compensation committee, (c) Liberty TripAdvisor Holdings, Inc. (since August 2014), where he is also a member of the audit committee, the compensation committee and the chairman of the nominating and corporate governance committee, and (d) Liberty Broadband Corporation (since March 2015), where he is also a member of the audit committee, the compensation committee and the nominating and corporate governance committee. In addition, he is a director of the private company Vobile, Inc.
Mr. Wargo’s extensive background in investment analysis and management and as a public company board member and his particular knowledge of, and experience with, finance and capital markets contribute to our board’s consideration of our capital structure and evaluation of investment and financial opportunities and strategies, provide insight into other public company board practices and strengthen our board’s collective qualifications, skills and attributes.
23
COMMITTEES OF THE BOARD OF DIRECTORS AND ATTENDANCE
Information with respect to each of the current committees of our board of directors is provided below. Our board may from time to time establish certain other committees of the board, consisting of one or more of our directors. Any committee so established will have the powers delegated to it by resolution of our board, subject to applicable law.
Audit Committee
Our board of directors has established an audit committee, whose members are Miranda Curtis, John W. Dick,
Paul A. Gould
(chairman) and J. David Wargo. Our board of directors has determined that Ms. Curtis and Messrs. Gould, Dick and Wargo are independent, as independence for audit committee members is defined in the
NASDAQ
rules as well as the rules and regulations adopted by the
SEC
relating to independence of audit committee members. In addition, our board of directors has determined that more than one member of the committee, including its chairman, Mr. Gould, qualifies as an “audit committee financial expert” under applicable
SEC
rules and regulations. A description of their respective experiences is set forth under
Resolutions 1, 2, 3 and 4
above.
The audit committee reviews and monitors our corporate financial reporting and our internal and external audits. The audit committee’s functions include:
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appointing and, if necessary, replacing our independent auditors;
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reviewing and approving in advance the scope and the fees of all auditing services, and all permissible non-auditing services, to be performed by our independent auditors;
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reviewing our annual audited financial statements with our management and our independent auditors and making recommendations regarding inclusion of such audited financial statements in certain of our public filings;
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overseeing the work of our independent auditor for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services, including holding quarterly meetings to review our quarterly reports, discussing with our independent auditors issues regarding the ability of our independent auditors to perform such services, reviewing with our independent auditors any audit related problems or difficulties and the response of our management, and addressing other general oversight issues;
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reviewing and discussing with management and our independent auditors issues regarding accounting principles, effectiveness of internal controls, financial reporting, and regulatory and accounting initiatives;
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reviewing quarterly earnings releases;
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overseeing the maintenance of an internal audit function, discussing with our independent auditors, the internal auditor and our management, as appropriate, the internal audit function’s responsibilities, budget and staff, periodically reviewing with our independent auditors the results and findings of the internal audit function and coordinating with our management to ensure that the issues associated with such results and findings are addressed;
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discussing with management financial risk exposure and risk management policies;
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reviewing disclosures by our certifying officers on any significant deficiencies or material weaknesses in the design or operation of our internal controls and any fraud involving persons who have a significant role in our internal controls;
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overseeing management’s processes and activities with respect to confirming compliance with applicable securities laws and
SEC
and
NASDAQ
rules relating to our accounting and financial reporting processes and the audit of our financial statements;
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establishing procedures for the consideration of alleged violations of the code of business conduct and the code of ethics adopted by our board and for the reporting and disclosure of violations of or waivers under such codes;
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establishing procedures for receipt, retention and treatment of complaints on accounting, internal accounting controls or audit matters; and
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preparing a report for our annual proxy statement.
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24
Our board of directors has adopted a written charter for the audit committee, which is available on our website at
www.libertyglobal.com.
In addition to the foregoing, as provided in our corporate governance guidelines referenced above, the audit committee must review and approve any related party transaction in which an executive officer has a direct or indirect interest for which disclosure is required under
SEC
rules.
Compensation Committee
Our board of directors has established a compensation committee, whose members are John P. Cole, Jr.,
Larry E. Romrell
and JC Sparkman (chairman). See
Corporate Governance—Director Independence
above. Our board of directors has adopted a written charter for the compensation committee, which is available on our website at
www.libertyglobal.com
. See
Executive Officers and Directors Compensation—Compensation Discussion and Analysis
below for a description of the responsibilities of the compensation committee on matters related to executive compensation and administration of the various incentive plans of our company for awards to employees.
As stated in its charter, the compensation committee has the authority to engage its own compensation consultants and other independent advisors. During
2014
, the compensation committee retained Deloitte Consulting LLP (
Deloitte
) as its compensation consultant and to assist the compensation committee in its evaluation and negotiation of an employment agreement with our
CEO
, Mr. Fries. The services of
Deloitte
are described under
Executive Officers and Directors Compensation—Compensation Discussion and Analysis—Overview of Compensation Process
.
Compensation Committee Interlocks and Insider Participation
During
2014
, none of the members of our compensation committee was an officer or employee of our company or any of our subsidiaries, was formerly an officer of our company or any of our subsidiaries, or had any relationship requiring disclosure under applicable securities laws.
Executive Committee
Our board of directors has established an executive committee pursuant to our articles of association, whose members are
Michael T. Fries
and
John C. Malone
. Except as specifically prohibited by the
Companies Act
or limited by our board of directors, the executive committee may exercise all the powers and authority of our board in the management of our business and affairs between board meetings, including the power and authority to authorize the issuance of ordinary shares of our capital stock, with the exception of certain matters, including amendments to the articles of association and fundamental changes to
Liberty Global
(such as a merger or sale of substantially all of its assets).
Nominating and Corporate Governance Committee
Our board of directors has established a nominating and corporate governance committee, whose members are Andrew J. Cole, John P. Cole, Jr., Miranda Curtis, John W. Dick,
Paul A. Gould
, Richard R. Green, David E. Rapley (chairman),
Larry E. Romrell
, JC Sparkman and J. David Wargo. See
Corporate Governance—Director Independence
above. The nominating and corporate governance committee identifies and recommends persons as nominees to our board of directors. As stated above, it also reviews from time to time the corporate governance guidelines applicable to us and oversees the evaluation of our board of directors and makes recommendations to our board, as it may deem appropriate. Further, at the request of our board, the nominating and corporate governance committee assists our board in discharging its duties relating to compensation of our independent directors and our chairman of the board.
The nominating and corporate governance committee will consider candidates for director recommended by any shareholder, provided that such nominations are properly submitted. Eligible shareholders wishing to recommend a candidate for nomination as a director should send the recommendation in writing to the Nominating and Corporate Governance Committee, Liberty Global plc, 38 Hans Crescent, London SW1X 0LZ, United Kingdom, Attn: General Counsel. Shareholder recommendations must be made in accordance with our articles of association, as discussed under
Shareholder Resolutions
below, and contain the following information:
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the proposing shareholder’s name and address and documentation indicating the number of ordinary shares beneficially owned by such person and the holder or holders of record of those shares, together with a statement that the proposing shareholder is recommending a candidate for nomination as a director;
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the candidate’s name, age, business and residence addresses, principal occupation or employment, business experience, educational background and any other information relevant in light of the factors considered by the nominating and corporate governance committee in making a determination of a candidate’s qualifications, as described below;
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a statement detailing any relationship, arrangement or understanding that might affect the independence of the candidate as a member of our board;
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any other information that would be required under
SEC
rules in a proxy statement soliciting proxies for the election of such candidate as a director;
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a representation as to whether the proposing shareholder intends to deliver any proxy materials or otherwise solicit proxies in support of the director nominee;
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a representation that the proposing shareholder intends to appear in person or by proxy at the annual shareholders meeting at which the person named in such notice is to stand for election; and
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a signed consent of the candidate to serve as a director, if nominated and elected.
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In connection with its evaluation, the nominating and corporate governance committee may request additional information from the proposing shareholder and the candidate. The nominating and corporate governance committee has sole discretion to decide which individuals to recommend for nomination as directors.
To be nominated to serve as a director, a nominee need not meet any specific, minimum criteria; however, the nominating and corporate governance committee believes that nominees for director should possess the highest personal and professional ethics, integrity and values and should be committed to our long-term interests and the interests of our shareholders. When evaluating a potential director nominee, including one recommended by a shareholder, the nominating and corporate governance committee will take into account a number of factors, including, but not limited to, the following:
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independence from management; education and professional background; judgment, skill and reputation;
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understanding of our business and the markets in which we operate;
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expertise that is useful to us and complementary to the expertise of our other directors;
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existing commitments to other businesses as a director, executive or owner;
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personal conflicts of interest, if any; and
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the size and composition of our existing board of directors.
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The nominating and corporate governance committee does not have a formal policy on diversity. It does, however, consider whether the nominee has personal capabilities and qualifications that contribute to the overall diversity of our board. For this purpose, the committee construes diversity broadly to include a variety of perspectives, opinions, professional backgrounds and experiences.
When seeking candidates for director, the nominating and corporate governance committee may solicit suggestions from incumbent directors, management, shareholders and others. After conducting an initial evaluation of a prospective nominee, the nominating and corporate governance committee will interview that candidate if it believes the candidate might be suitable to be a director. The nominating and corporate governance committee may also ask the candidate to meet with management. If the nominating and corporate governance committee believes a candidate would be a valuable addition to the board of directors, it may recommend to our full board that candidate’s appointment or election.
Prior to nominating an incumbent director for re-election at an
AGM
, the nominating and corporate governance committee considers, in addition to the foregoing criteria, the director’s past attendance at, and participation in, meetings of our board of directors and its committees and the director’s formal and informal contributions to the various activities conducted by the board and the board committees of which such individual is a member.
Based on the foregoing considerations, the nominating and corporate governance committee determined to recommend Messrs. Fries, Gould, Malone and Romrell for nomination for re-election to our board.
Our board of directors has adopted a written charter for the nominating and corporate governance committee. The charter is available on our website at
www.libertyglobal.com
.
26
Succession Planning Committee
Our board of directors has established a succession planning committee to assist the full board in succession planning for our
CEO
. The responsibilities of the succession planning committee include the development of candidate profiles and qualifications, the identification and evaluation of potential internal candidates and opportunities for their development, the evaluation of potential external candidates and annual reporting to the full board on the results of its work. Our
CEO
collaborates with the succession planning committee in the performance of its functions. Members of the succession planning committee are our chairman of the board, the chairs of each of the audit, compensation and nominating and corporate governance committees and Miranda Curtis, one of our directors. Our board of directors has adopted a written charter for the succession planning committee, which is available on our website at
www.libertyglobal.com
.
Board Meetings
During
2014
, we had ten meetings of our full board of directors, seven meetings of our audit committee, eight meetings of our compensation committee, two meetings of our nominating and corporate governance committee and one meeting of our succession planning committee. Each director attended, either in person or telephonically, at least 75% of the total number of meetings of our board and each committee on which he or she served (during the period during which he or she served on our board or such committee) in the aggregate.
Director Attendance at
AGM
s
Our board of directors encourages all members to attend each annual general meeting of our shareholders. For our
2014
annual general meeting of shareholders, all of our board members attended in person or via video- or tele-conference.
Executive Sessions
The independent directors of
Liberty Global
held two executive sessions without the participation of management during
2014
.
27
MANAGEMENT OF LIBERTY GLOBAL
Executive Officers
The following lists the executive officers of our company, their ages and a description of their business experience, including positions held with
Liberty Global
and its predecessors.
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Positions
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Charles H.R. Bracken, 48
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Executive Vice President since January 2012 and Co-Chief Financial Officer (Principal Financial Officer) since June 2005. From April 2005 to January 2012, Mr. Bracken served as a Senior Vice President. He also served as the Chief Financial Officer of UGC Europe, Inc., now known as Liberty Global Europe LLC, and its predecessors from November 1999 to June 2005. Mr. Bracken is a director of our subsidiary Telenet Group Holding NV, a Belgian public limited liability company (
Telenet
).
|
|
|
Bernard G. Dvorak, 54
|
Executive Vice President since January 2012 and Co-Chief Financial Officer (Principal Accounting Officer) since June 2005. From April 2005 to January 2012, Mr. Dvorak served as a Senior Vice President. In addition, Mr. Dvorak serves as an officer and director of various of our subsidiaries, including LGI and LGI International.
|
|
|
Michael T. Fries, 52
|
Chief Executive Officer, President and Vice Chairman of our board since June 2005. Mr. Fries served as Chief Executive Officer of UGC from January 2004 to June 2005. Mr. Fries served as a director of UGC and its predecessors from November 1999 and as President of UGC and its predecessors from September 1998 until 2013. Mr. Fries has served in an executive capacity at Liberty Global, UGC and its predecessors for nearly 30 years. See also
Resolutions 1, 2, 3 and 4—Nominees for Election of Directors
.
|
|
|
Bryan H. Hall, 52
|
Executive Vice President, General Counsel and Secretary since January 2012. In addition, he is an officer and director of various of our subsidiaries. Prior to joining Liberty Global, Mr. Hall served as secretary and general counsel of Virgin Media from June 2004 until January 2011. While at Virgin Media, Mr. Hall was responsible for all legal affairs affecting Virgin Media, as well as matters concerning regulatory, competition, government affairs and media relations issues. From September 2000 to June 2004, Mr. Hall was a partner in the corporate department of the law firm Fried, Frank, Harris, Shriver & Jacobson LLP in New York, specializing in public and private acquisitions and acquisition financings.
|
|
|
Diederik Karsten, 58
|
Executive Vice President, European Broadband Operations since January 2012. During 2011, Mr. Karsten served as Managing Director, European Broadband Operations. Mr. Karsten served as Managing Director, UPC Nederland BV, a subsidiary of Liberty Global Europe Holding BV and its predecessors, from July 2004 to December 2010, where he was responsible for our broadband operations in the Netherlands. Prior to joining UPC Nederland BV, he served as chief executive officer of KPN Mobile, overseeing mobile telephony operations in the Netherlands, Germany, Belgium and other countries. Mr. Karsten is a director of Telenet and chairman of the supervisory board of our subsidiary Unitymedia Kabel BW GmbH.
|
|
|
Balan Nair, 48
|
Executive Vice President since 2012 and Chief Technology Officer since July 2007. From July 2007 to January 2012, he served as a Senior Vice President. Prior to joining our company, Mr. Nair served as Chief Technology Officer and Executive Vice President for AOL LLC, a global web services company, from 2006. Prior to his role at AOL LLC, Mr. Nair spent more than five years at Qwest Communications International Inc., most recently as Chief Information Officer and Chief Technology Officer. Mr. Nair is a director of Charter Communications, Inc., Telenet and Adtran, Inc. In addition, he is a co-chair of Energy 2020, an initiative of the Society of Cable Telecommunications Engineers to reduce the cable industry’s power consumption.
|
|
The executive officers named above will serve in such capacities until their respective successors have been duly elected and have been qualified or until their earlier death, resignation, disqualification or removal from office. There are no family relationships between any of our directors and executive officers, by blood, marriage or adoption.
28
Involvement in Certain Proceedings
During the past 10 years, none of our directors or executive officers was convicted in a criminal proceeding (excluding traffic violations or other minor offenses) or was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement or were subsequently reversed, suspended or vacated) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, laws respecting financial institutions or insurance companies, or laws prohibiting fraud, or was a party in any proceeding adverse to our company. In addition, during the past 10 years, none of our directors or executive officers has had any involvement in such legal proceedings as would be material to an evaluation of his or her ability or integrity.
29
EXECUTIVE OFFICERS AND DIRECTOR COMPENSATION
We are an international provider of video, broadband internet, fixed-line telephony and mobile services, with consolidated operations at
December 31, 2014
, serving
27.3 million
customers across
14
countries. At
December 31, 2014
, these customers subscribed to
55.9 million
services, consisting of
24.3 million
video,
17.3 million
broadband internet and
14.3 million
telephony subscriptions (excludes mobile). In addition, we served 5.0 million mobile subscribers across nine countries at
December 31, 2014
. Our businesses operate in an environment marked by intense competition, extensive regulation and rapid technological change. We place great importance on our ability to attract, retain, motivate and reward talented executives who, faced with these challenges, can execute our strategy to drive shareholder value through strong organic growth, accretive mergers and acquisitions and prudent capital structure management.
In this section, we summarize our
2014
highlights, provide an overview of our compensation process and philosophy, and describe how our executive compensation packages are designed, including greater detail on individual elements of the packages. We also provide detail on the performance of our most recent executive compensation awards and historical context on key decisions and changes that were made with respect to our executives’ compensation packages and other compensation-related matters. Compensation information is provided for
Michael T. Fries
, our
CEO
and also a member of our board of directors; Charles H.R. Bracken, our principal financial officer; and our three other most highly compensated executive officers at the end of
2014
: Bernard G. Dvorak, our principal accounting officer, Diederik Karsten, our executive vice president, European Broadband Operations, and Balan Nair, our chief technology officer. These five individuals are our
NEO
s. After the information on our
NEO
s, we also provide information relating to the compensation of our directors (other than Mr. Fries).
We are subject to the disclosure requirements of the
SEC
in the
U.S.
and the
Companies Act
in the
U.K.
In some respects the disclosure requirements in these jurisdictions overlap or are otherwise similar and in other respects they are different, requiring distinct disclosures. The
—Compensation Discussion and Analysis
below includes disclosure required by the
SEC
and in certain respects the
Companies Act
, and the
Directors’ Remuneration Report
in Appendix A to this proxy statement includes disclosure required by the
Companies Act
. The
Directors’ Remuneration Report
will also form part of the
U.K. Report and Accounts
and should be read in conjunction with the
—Compensation Discussion and Analysis
below.
The
Directors’ Remuneration Report
is in response to
U.K.
regulations regarding our directors’ compensation disclosure (or remuneration report), which became effective on October 1, 2013. These regulations require, among other things, a binding shareholder vote on our compensation policy for our directors, including our
CEO
(or executive director) Mr. Fries, at least once every three years and an annual advisory vote on our prior year’s compensation paid to our directors. These regulations are in addition to the regulations we are subject to as a
NASDAQ
listed company with respect to, among other things, submitting our compensation policy for our
NEO
s to an advisory vote of our shareholders at least once every three years. At our 2014
AGM
, our shareholders approved our compensation policy for our directors, the 2013 compensation paid to our directors and our compensation policy for our
NEO
s as required under the foregoing respective regulations.
Executive Summary
The primary goals of our executive compensation program are to motivate our executives to maximize their contributions to the success of our company, align executives’ interests to create shareholder value, and to attract and retain the best leaders for our business. Our compensation program plays a key role in our company’s operating and financial success. In
2014
, we had a very successful year and our board credits the leadership of Mr. Fries for achieving this strong performance, as evidenced in our business highlights below.
30
2014
Business Highlights
We had a strong year in
2014
, reporting subscriber growth, increases in revenue, operating cash flow (
OCF
) and adjusted free cash flow as highlighted below. For information regarding rebased growth,
OCF
and combined adjusted free cash flow calculations, including required reconciliations, please see our February 12, 2015 earnings release for the year ended
December 31, 2014
. Certain business and financial highlights for
2014
were as follows:
|
•
|
Delivered strong subscriber growth across footprint with
1.3 million
organic revenue generating unit additions
|
|
▪
|
Fourth consecutive year with over 1.0 million organic revenue generating unit additions
|
|
▪
|
Lowest annual video attrition since 2006
|
|
▪
|
Over 500,000 postpaid mobile subscriber additions on an organic basis
|
|
•
|
Launched Horizon Go app and MyPrime video-streaming service in select countries
|
|
•
|
Increased the top or lead broadband speed in eight markets
|
|
•
|
Rebased growth of 3% for revenue and 5.5% for
OCF
|
|
▪
|
Best rebased
OCF
growth in three years
|
|
▪
|
Unitymedia KabelBW and
Virgin Media
posted 9% and 7% rebased
OCF
growth, respectively
|
|
•
|
An
18%
increase in combined adjusted free cash flow year-over-year (with
2014
adjusted to exclude the post-acquisition free cash flow of Ziggo Holding B.V. (formerly, Ziggo N.V. (
Ziggo
) and with
2013
adjusted to reflect the combined adjusted free cash flow of our company and
Virgin Media
for the full year)
|
|
•
|
Slight decrease in property and equipment additions as a percentage of revenue, as compared to
2013
|
|
•
|
Refinanced a significant amount of debt during the year, which enabled us to extend the average life of our debt and lower our all-in-swapped borrowing costs by 60 basis points to 6.0% as compared to year-end
2013
|
|
•
|
Announced and completed the acquisition of
Ziggo
|
|
▪
|
Integration well underway, synergy estimates increased to €250 million by
2018
|
|
•
|
Repurchased nearly $1.6 billion of equity in
2014
|
|
▪
|
Brings aggregate share repurchases at
Liberty Global
to more than $12.0 billion since 2005
|
Pay for Performance
Our performance-based compensation programs provide for the opportunity to reward the
NEO
s and other senior management for contributing to annual and long-term financial, operational, and stock price performance. A high percentage of the
NEO
s’ total compensation is performance-based (targeted at approximately 90% of total compensation for
2014
), excluding the
2013 Challenge Awards
and the CEO Performance Award (see
—Elements of our Compensation Packages—Equity Incentive Awards
), with a significant portion of total compensation delivered in the form of multi-year performance-based equity incentive awards (targeted at approximately 60% of total compensation for
2014
, excluding the
2013 Challenge Awards
and the CEO Performance Award (each as defined under
—Elements of Our Compensation Packages—Equity Incentive Awards
below)).
The following chart shows the percentage of the average of the
NEO
s’
2014
target total compensation that is allocable to base salary, maximum annual cash performance award and target multi-year performance-based equity incentive awards consisting of performance-based
PSU
s and
SAR
s, excluding the
2013 Challenge Awards
.
31
2014
Total Direct Compensation Opportunity for
NEO
s
The compensation committee looks at many factors to determine the
NEO
s’ performance and the value they bring to our shareholders, including an evaluation of total shareholder return (
TSR
), for purposes of measuring alignment of our executive pay with performance. The following table compares the cumulative and compound annual growth rate (
CAGR
) of
TSR
over 1, 3 and 5 year periods ended
December 31, 2014
, for our Class A, Class B and Class C shares, NASDAQ US Benchmark TR Index, and the ICB 6500 Telecommunications (assuming reinvestment of dividends, as applicable).
|
Cumulative
|
CAGR
|
||||||||
|
1-yr TSR
|
3-yr TSR
|
5-yr TSR
|
3-yr CAGR
|
5-yr CAGR
|
|||||
|
Class A shares
|
10%
|
139%
|
349%
|
34%
|
35%
|
||||
|
Class B shares
|
12%
|
140%
|
350%
|
34%
|
35%
|
||||
|
Class C shares
|
15%
|
144%
|
342%
|
35%
|
35%
|
||||
|
NASDAQ US Benchmark TR Index
|
12%
|
75%
|
106%
|
20%
|
16%
|
||||
|
ICB 6500 Telecommunications (Supersector)
|
3%
|
39%
|
77%
|
12%
|
12%
|
||||
32
Compensation Discussion and Analysis
Overview of Compensation Process
The compensation committee of our board of directors was established for the purposes of assisting our board in discharging its duties relating to compensation of our executive officers and of administering our incentive plans. In furtherance of its purposes, our compensation committee is responsible for identifying our primary goals with respect to executive compensation, implementing compensation programs designed to achieve those goals, subject to appropriate safeguards to avoid unnecessary risk taking, and monitoring performance against those goals and associated risks. The chair of our compensation committee reports to our board of directors on annual compensation decisions and on the administration of existing programs and development of new programs. The members of our compensation committee are “independent directors” (as defined under the
NASDAQ
rules), “non-employee directors” (as defined in Rule 16b-3 of the
SEC
’s rules under the
Exchange Act
) and “outside directors” (as defined in Section 162(m) of the U.S. Internal Revenue Code of 1986 and the regulations and interpretations promulgated thereunder (the
Code
)).
All compensation decisions with respect to our executive officers, including our
NEO
s, are made by our compensation committee. Decisions with respect to our
CEO
’s compensation are made in private sessions of the committee without the presence of management. Our
CEO
is actively engaged in compensation decisions for our other members of senior management in a variety of ways, including recommending annual salary increases, annual performance goals and the level of target and/or maximum performance awards for his executive team and evaluating their performance. With the assistance of our Human Resources and Legal Departments, he is also involved in formulating the terms of proposed performance or incentive award programs for consideration by the compensation committee, evaluating alternatives and recommending revisions. Other senior officers, within the scope of their job responsibilities, participate in gathering and presenting to the compensation committee data and legal, tax and accounting analyses relevant to compensation and benefit decisions.
In making its compensation decisions, the compensation committee ultimately relies on the general business and industry knowledge and experience of its members and the committee’s own evaluation of company and
NEO
performance. From time to time, however, the committee will retain a compensation consultant to assist it in evaluating proposed changes in compensation programs or levels of compensation and to provide comparative data. At the
2014
AGM, shareholders representing a majority of our shares entitled to vote and present at such meeting approved, on an advisory basis, the compensation of our
NEO
s, as disclosed in the proxy statement for such meeting. As a result of that vote, the compensation committee did not implement any changes in the overall executive compensation program.
On April 30, 2014, we entered into a multi-year employment agreement with Mr. Fries to serve as our
CEO
(the
Fries Agreement
), the terms of which are described below under
—Employment and Other Agreements
. We believe that it is in our company’s best interest to have an employment agreement with Mr. Fries to serve as our
CEO
in order to promote stability in management, secure his services for the long term, implement appropriate restrictive covenants and recognize his outstanding performance and our company’s success under his leadership. Mr. Fries was not previously subject to an employment agreement.
The compensation committee has the authority under its charter to engage its own compensation consultants and other independent advisers. In
2014
, in connection with the preparation and negotiation of the
Fries Agreement
with our
CEO
, the compensation committee retained
Deloitte
. We paid $44,025 to
Deloitte
for its services to the compensation committee.
Deloitte
is one of several member firms of Deloitte Touche Tohmatsu Limited (
DTTL
), a
U.K.
private company limited by guarantee. Each member firm of
DTTL
, including
Deloitte
, is a legally separate and independent entity. These member firms provide services in their respective geographic areas and are subject to the laws and professional regulations of such geographic area. The member firms of
DTTL
offer a broad range of audit, consulting, financial advisory, risk and tax services, as well as compensation related services, in the global market. As a result, our operations use a number of other
DTTL
member firms for non-compensation related services. In
2014
, these firms provided tax, audit and financial advisory services to
Liberty Global
and several of its subsidiaries, for which we paid an aggregate of $20.1 million in 2014. All of the non-compensation related services provided by these other member firms of
DTTL
were performed at the direction of management without oversight or approval by our board or compensation committee, as these services were rendered in the ordinary course of business and were not material in scope or nature. Our compensation committee was aware that other
DTTL
member firms performed non-compensation related services for us at the time it engaged
Deloitte
.
33
At the request of the compensation committee,
Deloitte
assisted the compensation committee in evaluating the terms and compensation amounts for the
Fries Agreement
.
Deloitte
did not recommend or determine the amount or form of the executive compensation set forth in the employment agreement. The compensation committee requested
Deloitte
to (1) provide compensation information for the chief executive officers in the
2014
comparator group referenced below and (2) provide its comments and observations, together with a comparative analysis based on publicly available information, for discussion by the compensation committee.
In
2014
, the compensation committee, with the assistance of management, reassessed the comparator group used in
2013
with the benefit of a year’s experience owning
Virgin Media
, having greater financing activity and greater industry complexity and in light of the then proposed acquisition of
Ziggo
. The
2014
comparator group was used in connection with evaluating the compensation of our
NEO
s for
2014
as described below under
—Elements of Our Compensation Packages
. As stated above, the
2014
comparator group was also used in the negotiation of
Fries Agreement
, the terms of which are described below under
—Employment and Other Agreements
.
This comparator group is comprised of:
|
Sky plc
|
Dish Network Corp
|
Time Warner Inc.
|
|
CBS Corporation
|
Liberty Interactive Corporation
|
Time Warner Cable Inc.
|
|
Comcast Corporation
|
Liberty Media Corporation
|
Viacom Inc.
|
|
DIRECTV
|
Rogers Communications
|
Vodafone Group
|
|
Discovery Communications, Inc.
|
||
Although the compensation committee does not target compensation levels at any particular percentile of the comparator group, it noted that the pay levels for Mr. Fries were at the low end of the comparator group. In adjusting our
NEO
s’ base salaries and maximum annual cash performance awards for
2014
, the committee considered the comparative pay data. Unlike many of the companies in the comparator group, we do not set target amounts for our annual cash performance awards. Therefore, we assumed for comparative purposes a target annual award for each
NEO
equal to two-thirds of their respective maximum achievable annual awards. On this basis, the committee concluded that the target total cash compensation (that is, base salary plus target annual cash performance award) proposed for our
CEO
and his proposed target total direct compensation (that is, base salary plus target annual cash performance award plus target annual equity incentive) would fall between the
50
th percentile and
75
th percentile of the comparator group. Based on the last completed fiscal year of reported revenue and current market capitalization for the comparator group, our percentile rank with respect to the comparator group was estimated to be at the 56th percentile for revenue and 67th percentile for market capitalization (using estimated
Liberty Global
revenue and market capitalization). For our
NEO
s (other than our
CEO
), their target total cash compensation and target total direct compensation ranged from the 50th percentile to the 90th percentile due to variations by comparator position. The compensation committee was comfortable with these percentiles for
2014
.
Compensation Philosophy and Goals
The compensation committee has two primary objectives with respect to executive compensation—motivation and retention—with the ultimate goal of long-term value creation for our shareholders.
|
•
|
To motivate our executives to maximize their contributions to the success of our company, we:
|
|
▪
|
establish a mix of financial performance objectives based on our annual budgets and our medium-term outlook to balance short- and long-term goals and risks;
|
|
▪
|
establish individual performance objectives tailored to each executive’s role in our company to ensure individual accountability; and
|
|
▪
|
pay for performance that meets or exceeds the established objectives.
|
|
•
|
To ensure that we are able to attract and retain superior employees in key positions, we:
|
|
▪
|
offer compensation that we believe is competitive with the compensation paid to similarly situated employees of companies in our industry and companies with which we compete for talent; and
|
|
▪
|
include vesting requirements and forfeiture provisions in our multi-year equity awards, including a service period during which earned performance awards are subject to forfeiture.
|
|
•
|
To align our executives’ interests with those of our shareholders, we:
|
34
|
▪
|
emphasize long-term compensation, the actual value of which depends on increasing the share value for our shareholders, as well as meeting financial and individual performance objectives; and
|
|
▪
|
require our executive officers to achieve and maintain significant levels of stock ownership, further linking our executives’ personal net worth to long-term stock price appreciation for our shareholders.
|
Setting Executive Compensation
To achieve the foregoing compensation objectives, the compensation packages provided to members of our senior management, including our
NEO
s, include three main components: base salary, annual cash performance awards and multi-year equity incentive awards. In addition, certain members of senior management, including our
NEO
s, may participate in our deferred compensation plan. Consistent with past practice, the three main components of compensation were also made available during
2014
to approximately
450
employees in the
U.S.
and Europe. The relative weighting of the components, the design of the performance and incentive awards and the overall value of the compensation package for individual employees varies based on the employee’s role and responsibilities.
For members of our senior management, including our
NEO
s, the total value of the compensation package is most heavily weighted to performance and incentive awards because of the significance of each officer’s roles and responsibilities to the overall success of our company. Further, multi-year equity incentive awards are the largest component of executive compensation, serving the goals of retention as well as alignment with shareholders’ interests. The compensation committee’s objective is for a substantial majority of each executive officer’s total direct compensation (that is, base salary plus maximum annual cash performance award plus target annual equity incentive) to be comprised of the target value of his or her multi-year equity incentive awards.
In approving the level of each compensation element for our executive officers, the compensation committee considers a number of factors, including:
|
•
|
the responsibilities assumed by the individual executive and the significance of his role to achievement of our financial, strategic and operational objectives;
|
|
•
|
the experience, overall effectiveness and demonstrated leadership ability of the individual executive;
|
|
•
|
the performance expectations set for our company and for the individual executive and the overall assessment by the compensation committee of actual performance; and
|
|
•
|
retention risks at specific points in time with respect to individual executives.
|
35
Elements of Our Compensation Packages
The implementation of our compensation approach
—
generally and for
2014
specifically
—
is described below.
Base Salary
General
. Base salary represents the least variable element of our executives’ compensation and is provided as an economic consideration for each executive’s level of responsibility, expertise, skills, knowledge, experience and value to the organization. The base salary levels of Messrs. Fries, Bracken and Dvorak were initially set in 2005, along with the base salaries of our other executive officers at that time, taking into account each executive’s salary level prior to the business combination of
LGI International
and
UGC
, as well as the factors referenced above. The base salary level of Mr. Nair was initially set in 2007 when he joined our company as an executive officer. Mr. Karsten’s initial base salary level as an executive officer was set in connection with his promotion to that position effective January 1, 2011. Until 2013, decisions with respect to increases in base salaries after such respective dates were based on company-wide budgets and increases in the cost of living. In
2013
and similarly as described below for
2014
, decisions with respect to increases in base salaries have been based on significant changes in the size and operations of the company.
2014
Base Salaries
. For
2014
, our compensation committee approved an increase in the base salaries to $1.0 million (with currency adjustments for our non-
U.S.
based
NEO
s) for each of our
NEO
s, except our
CEO
. For our
CEO
, the compensation committee approved an increase in his base salary to
$2.0 million
. In approving these increases, the compensation committee noted that the size of the company’s revenues, assets, liabilities and operations increased significantly following the
Virgin Media Acquisition
in June 2013. With this acquisition, the responsibilities and demands on our
NEO
s and other senior management also increased significantly. The compensation committee recognized that these individuals should be adequately compensated for their new roles in our company and that this was also in the best interest of our company and the shareholders. This decision was also supported by the research on market levels of compensation for executive officers as stated above. Such increases were above the budget authorization of
3%
given to each department and business unit for aggregate salary increases for our corporate-level employees based in Europe and in the
U.S.
The actual percentage salary increases varied among our corporate-level employees as determined by their department or business unit head. The
2014
salary increases for all our employees, including our
NEO
s, became effective on April 1, 2014.
2015 Base Salaries
. In March 2015, our compensation committee approved a 2.5% increase in the base salary of each of our
NEO
s. This percentage increase was consistent with the budget authorization given to each of our department and business unit heads for aggregate salary increases for
U.S.
and corporate-level European employees in their department or unit. The actual percentage salary increases varied among our corporate-level employees as determined by their department or business unit head. The salary increases for our
NEO
s became effective April 1, 2015.
36
Annual Cash Performance Awards
General
. Annual cash performance awards pursuant to the
2014 Incentive Plan
are one of the variable components of our executive officers’ compensation packages designed to motivate our executives to achieve our annual business goals and reward them for superior performance.
Generally, at its first regular meeting following the end of each fiscal year, the compensation committee reviews with our
CEO
the financial performance of our company during the prior year, his performance, his evaluation of the performance of each of the other members of senior management (including our
NEO
s) participating in the prior year’s annual cash performance award program and his recommendations with respect to their performance awards. The compensation committee determines whether our financial performance for the prior fiscal year has satisfied the base performance objective set by the compensation committee, which is a precondition to the payment of any award to our
NEO
s, and determines the percentage of the financial performance metric(s) that has been achieved. It then determines, in a private session, whether our
CEO
has met his individual performance goals for the year, his resulting annual performance rating, and the amount to be paid to him with respect to his performance award. The compensation committee also approves the amount to be paid to the other participants in the program, including our other
NEO
s, with respect to their performance awards. Generally at the same meeting, the compensation committee approves the terms of the annual cash performance award program for the current year, including, in a private session, the individual performance goals for our
CEO
for the coming year.
Design of
2014 Annual Award Program
. The design of the
2014
annual cash performance award program (the
2014 Annual Award Program
) is the same as the annual cash performance award program for
2013
. The
2014
maximum achievable performance awards were increased for each of our
NEO
s, other than Mr. Fries, to $2.5 million. As provided in Mr. Fries’ employment agreement, his maximum achievable award was increased to $8.0 million. These increases were made for the reasons cited above for increasing the
NEO
s’ salaries in
2014
and based on the research on market levels of compensation of executive officers as stated above.
The same general design was also implemented with similar performance metrics and weightings for the
2014
bonus programs for approximately 1,050 employees in our corporate offices in the
U.K.
, the
U.S.
and the Netherlands.
The key elements of the
2014 Annual Award Program
were:
|
•
|
Sixty percent of each participant’s maximum achievable performance award was based on achievement against financial performance metrics and
40%
was based on individual achievement against defined performance goals.
|
|
•
|
Two equally weighted financial performance metrics were used:
|
|
▪
|
2014
budgeted revenue growth on a consolidated basis and, if applicable, operating unit basis; and
|
|
▪
|
2014
budgeted operating free cash flow (
OFCF
) growth on a consolidated basis and, if applicable, operating unit basis.
|
|
•
|
The base performance objective for our
NEO
s required that either 40% of
2014
consolidated budgeted revenue growth or 40% of
2014
consolidated budgeted
OFCF
growth be achieved.
|
For purposes of the
2014 Annual Award Program
,
OFCF
was defined as
OCF
less property and equipment additions.
OCF
is the primary measure used by our board and management to evaluate our company’s operating performance and a key factor that is used to decide how to allocate capital and resources to our operating segments. The definition of
OCF
for these purposes is revenue less operating and selling, general and administrative expenses (excluding share-based compensation, depreciation and amortization, provisions and provision releases related to significant litigation and impairment, restructuring and other operating items (which includes gains and losses on disposition of long-lived assets, direct acquisition and disposal costs and and other acquisition-related items)) and is generally consistent with our definition of the term for public disclosure purposes.
Budgeted growth was determined by comparing actual
2013
results for the applicable metric to the amount budgeted for that metric in the
2014
consolidated and operating unit budgets approved by our board. For consolidated
Liberty Global
, the
2014
budget provided for: revenue of $17.2 billion, with growth over
2013
of approximately $635 million or 3.8%, and
OFCF
of $4.3 billion, with growth over
2013
of approximately $405 million or 10.4%. These budgeted amounts exclude amounts related to
Ziggo
. The payout schedule for each financial metric is based on the percentage achievement against the
2014
budget, as adjusted for events during the performance period such as acquisitions, dispositions, the impact of unforeseen changes in laws and regulations and changes in foreign currency exchange rates and accounting principles or policies that affect
37
comparability. The following table sets forth the performance against budget and related payouts approved by the compensation committee.
|
Corresponding % of Achievement of 2014 Budget
|
||||||
|
Achievement of Budgeted Growth over 2013
|
Revenue (50%Weighting)
|
OFCF (50% Weighting)
|
Payout (% of Weighted Portion of Maximum Bonus Amount) (1)
|
|||
|
Over-Performance
|
≥ 105.0%
|
≥ 110.0%
|
150.0%
|
|||
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
|||
|
50.0%
|
98.1%
|
95.3%
|
50%
|
|||
|
< 50.0%
|
< 98.1%
|
< 95.3%
|
—%
|
|||
___________________
|
(1)
|
Percentages shown represent the payout that would result if the specified performance levels were achieved for both the revenue and
OFCF
targets. Payout percentages for percentage achievement of revenue and
OFCF
budgets which fall in between points specified in the table would be determined by straight-line interpolation. If the performance level for revenue and
OFCF
were to differ, the payout would represent the sum of the percentages derived by multiplying 50% times each of the respective payout percentages for the revenue and
OFCF
targets, with a maximum payout of 100%.
|
Notwithstanding the over-performance feature indicated in the table, the aggregate payout for financial performance remained capped at
60%
of the maximum achievable performance award.
The payout schedule for the
40%
of each participant’s maximum achievable performance award allocated to individual performance was based on the annual performance rating received under our global performance management process, with a minimum rating of “strong” required for any amount to be payable with respect to this portion of the award. A rating of “strong” means the participant has performed well, meeting expectations with respect to his or her objectives.
The compensation committee considered the following when it approved this design for the annual award programs in 2010:
|
•
|
weighting financial performance metrics more heavily than individual performance goals should serve to reduce the level of subjectivity in determining final awards;
|
|
•
|
using two equally weighted financial metrics (budgeted revenue and
OFCF
growth), rather than a single metric, would provide incentives to drive revenue growth while controlling operating costs and capital expenditures;
|
|
•
|
including consolidated financial performance metrics for all participants, including those with operating unit responsibility, would serve to mitigate potential organizational risks;
|
|
•
|
including an over-performance provision would provide continuing incentive for above budget achievement; and
|
|
•
|
establishing a base performance objective as a gating factor for payment of any award to the
NEO
s should result in the payment qualifying as performance-based compensation under Section 162(m). There could be no assurance that the objective would be achieved, particularly in light of the increasingly competitive environment in which we operate.
|
The compensation committee did not establish target amounts payable when it approved the maximum amount that each
NEO
could earn under the
2014 Annual Award Program
.
2014
Performance
. At its meeting on February 18, 2015, the compensation committee reviewed the actual consolidated revenue and
OFCF
for
2014
based on our audited
2014
financial results. It also considered whether to exercise its discretion to reduce the amount payable to any of our
NEO
s. The exercise of the compensation committee’s discretion was in each case based on its assessment of our
2014
financial performance and the individual
NEO
’s performance overall as compared to his
2014
performance goals, taking into account the payout schedules for financial and individual performance.
The compensation committee first considered the percentage of budgeted revenue and budgeted
OFCF
achieved in
2014
. For this purpose, the
2014
budget was adjusted in accordance with the terms of the
2014 Annual Award Program
and for certain other unbudgeted events that the compensation committee, in its discretion and consistent with past practice, determined distorted performance against the financial performance metrics. These revisions included adjustments (1) to reflect consistent foreign currency exchange translations, (2) for a change in
U.K.
VAT legislation, (3) to exclude
Ziggo
integration costs, (4) to exclude unbudgeted increases in
2014
executive salaries and maximum bonus amounts, (5) related to the reclassification of RDK as a
38
joint venture investment, (6) related to the sale of substantially all of the programming assets of the Chellomedia division, (7) small acquisitions in the
U.K.
, Switzerland and Austria, and (8) related to other individually immaterial items. In the aggregate, these adjustments resulted in a net increase of budgeted revenue to $18.1 billion and budgeted
OFCF
to $4.5 billion. Actual
2014
revenue was less than budgeted on a consolidated basis, although over 99% of budgeted
2014
revenue and between 85% and 90% of budgeted
2014
revenue growth was achieved on a consolidated basis. Actual
2014
OFCF
was greater than budgeted on a consolidated basis, with over 101% of budgeted
2014
OFCF
and over 130% of budgeted
2014
OFCF
growth achieved on a consolidated basis.
The following charts illustrate the compensation committee’s financial performance and payout calculations, which for these purposes did not include the effect of the acquisition of
Ziggo
.
When these results are applied to the relevant payout schedules, the total implied payout against the financial performance metrics for revenue was 85.5% and for
OFCF
was 108.1%, resulting in an average payout of 96.8%. Therefore, the compensation committee approved payment of 96.8% of the
60%
portion of each of the
NEO
’s maximum achievable award that was based on financial performance.
With respect to the remaining
40%
of the maximum achievable awards, which was based on individual performance, at its February 18, 2015 meeting, the compensation committee considered each
NEO
’s performance against individual performance goals. The individual performance goals consisted of numerous qualitative measures, which included strategic, financial, transactional, organizational and/or operational goals tailored to the individual’s role within our company. In making its decision as to individual annual performance ratings, the compensation committee did not apply any particular weighting across the individual performance goals or relative to other considerations, nor did it require that the executive satisfy each of his goals.
Our
CEO
’s performance goals were organized around four main themes: key organic growth targets (including budget targets, product and operation initiatives); liquidity, leverage and capital structure targets and initiatives; acquisition and disposition opportunities; and core initiatives for each functional group. These functional groups include accounting, regulatory, technology, human resources, strategy, investor relations, programming and board matters. In its evaluation of his
2014
performance, the compensation committee considered the various performance objectives that had been assigned to Mr. Fries and our company’s accomplishments against those objectives. In this regard, the committee noted that our company had a number of significant performance accomplishments in
2014
under the leadership of Mr. Fries, including:
|
•
|
completion of the acquisition of
Ziggo
;
|
|
•
|
the launch of Horizon Go app and MyPrime video-streaming service in certain countries;
|
|
•
|
added over 1,000,000 next generation video subscribers;
|
|
•
|
the completion of key mobile virtual network operation agreements and launch of full MVNO mobile products in select countries, including Switzerland and the Netherlands;
|
|
•
|
increased the top or lead internet speed in eight markets;
|
|
•
|
refinanced a significant amount of debt during the year, which enabled us to extend the average life of our debt and lower our all-in-swapped borrowing costs; and
|
39
|
•
|
the achievement of significant financial and operational performance metrics related to organic subscriber additions,
OCF
and adjusted free cash flow, property and equipment additions and equity repurchases.
|
In reviewing Mr. Fries’ performance, the committee considered both what had been accomplished and how such accomplishments had been achieved. The compensation committee also considered Mr. Fries’ responsibilities with respect to overall corporate policy-making and management, in-depth knowledge of our operations and finances, the regulatory and organizational complexities in which we compete, the increased size of our company, as well as his strong leadership capabilities in delivering key long-term strategic objectives in a challenging global economy, his handling of unanticipated additional responsibilities and keeping the board of directors informed during the year.
With respect to the individual performance of our other
NEO
s, the compensation committee reviewed their performance with our
CEO
, giving much deference to our
CEO
’s evaluation of their performance against their respective
2014
performance goals and the resulting annual performance ratings. The members of the compensation committee also have frequent interaction with each of these executives at meetings of the board of directors and events planned for the directors, which interaction assists in informing their judgment. The individual performance goals for the other
NEO
s related to their respective functional or operational areas of responsibility. Mr. Bracken’s goals related to financial strategy, reducing financial risks, balance sheet efficiency, tax strategy, financial planning, development of content businesses, and group leadership and coordination with other functional groups. Mr. Dvorak’s goals related to financial reporting, internal audit and compliance, consolidation of financial systems, integration of acquired companies from a consolidation, financial reporting and accounting perspective, cross-training programs for the group and planning efforts for roll out of International Financial Reporting Standards for purposes of our
U.K.
statutory reporting requirements. Mr. Karsten’s goals related to his management of our European Broadband Operations division, including performance against financial and subscriber targets, group leadership and coordination with executive offices, the integration of
Ziggo
, expansion of services to businesses, execution of new product and service initiatives, and development of marketing initiatives. Mr. Nair’s goals related to optimizing operational synergies across entities, a global procurement process for customer premises equipment, network operations, development and implementation of new technologies for our services, management of capital expenditures and video and wireless initiatives and information technology efficiencies. In each case, the compensation committee also considered how these goals were affected by the increased size and complexity of our company following the
Virgin Media Acquisition
and the
Ziggo
acquisition.
Based on its evaluation of individual performance and its decisions with respect to the financial performance metrics, the compensation committee approved the payments to our
NEO
s with respect to their maximum achievable performance awards set forth in the table below. Percentages in the table represent percentages of the maximum achievable performance award.
|
2014 Annual Cash Performance Award
|
|||||||||||
|
Name
|
Maximum
Achievable Award |
% Payout for Financial Performance (Revenue & OFCF)(60%)
|
% Payout for Individual Performance
(40%) |
Aggregate % of Maximum Award (100%)
|
Approved Award
|
||||||
|
Michael T. Fries
|
$8,000,000
|
96.8%
|
100.0%
|
98.1%
|
$7,846,000
|
(a)
|
|||||
|
Charles H.R. Bracken
|
$2,500,000
|
96.8%
|
100.0%
|
98.1%
|
$2,452,000
|
||||||
|
Bernard G. Dvorak
|
$2,500,000
|
96.8%
|
100.0%
|
98.1%
|
$2,452,000
|
||||||
|
Diederik Karsten
|
$2,500,000
|
96.8%
|
100.0%
|
98.1%
|
$2,452,000
|
||||||
|
Balan Nair
|
$2,500,000
|
96.8%
|
100.0%
|
98.1%
|
$2,452,000
|
||||||
_______________
|
(a)
|
As required under the
Fries Agreement
, the award for Mr. Fries was determined and paid in December
2014
based on the compensation committee’s review of our consolidated revenue and
OFCF
for
2014
to date, as well as the projected consolidated revenue and
OFCF
for the remaining period of
2014
. The compensation committee approved a true-up payment of $224,000 when it determined the final awards in February 2015 for the other
NEO
s.
|
The amounts paid to our
NEO
s under the
2014 Annual Award Program
are reflected in the Summary Compensation Table below under the “Non-Equity Incentive Plan Compensation” column.
Decisions for 2015
. On March 19, 2015, based in part on the review of the overall compensation of our
NEO
s, our compensation committee approved individual performance goals and set the maximum achievable performance awards for
40
members of our senior management, including our
NEO
s, for
2015
. The general design of the 2015 annual cash performance award program is similar to the
2014 Annual Award Program
. The
2015
maximum achievable performance award is $8.5 million for our
CEO
pursuant to the terms of the
Fries Agreement
and remained unchanged at $2.5 million for each of the other
NEO
s. The same general design was also implemented, with similar performance metrics and weightings, for the
2015
bonus programs for other officers. For details regarding the setting of the maximum achievable performance award for Mr. Fries, see the description of the
Fries Agreement
under
—Employment and Other Agreements
.
Commitment Bonus
On April 30, 2014, we entered into the
Fries Agreement
, a multi-year employment agreement, with our
CEO
. Pursuant to the
Fries Agreement
, we paid to Mr. Fries a $5.0 million cash commitment bonus. See
—Employment and Other Agreements
for additional information regarding the
Fries Agreement
.
Equity Incentive Awards
General
. Multi-year equity incentive awards, whether in the form of conventional equity awards or performance-based awards, have historically represented a significant portion of our executives’ compensation. These awards ensure that our executives have a continuing stake in our company’s success, align their interests with our shareholders and also serve the goal of retention through vesting requirements and forfeiture provisions.
Our compensation committee’s approach to equity incentive awards for the senior management team places a significant emphasis on performance-based equity awards. Since 2010, the compensation committee’s approach has been to set a target annual equity value for each executive, of which approximately two-thirds would be delivered in the form of an annual award of
PSU
s and approximately one-third in the form of an annual award of
SAR
s. A similar approach was applied to equity incentive compensation for approximately 60 other key employees.
In connection with each year’s award of
PSU
s, the compensation committee selects one or more performance measures for the ensuing two-year performance period. For the
PSU
s awarded to date, the compensation committee has selected as the performance measure growth in consolidated
OCF
, as adjusted for certain specified events that affect comparability, such as acquisitions, dispositions and changes in foreign currency exchange rates and accounting principles. In choosing
OCF
growth as the performance measure, the compensation committee’s goal has been to ensure that the management team would be focused on maximizing performance against a variety of key financial metrics during the performance period by using a measure of performance that was different from those selected for the annual cash performance awards. Different performance measures may be selected for the awards in subsequent years.
The compensation committee also sets the performance targets corresponding to the selected performance measure(s) and a base performance objective that must be achieved in order for any portion of our
NEO
s’
PSU
awards to be earned. The level of achievement of the performance target within a range established by the compensation committee determines the percentage of the
PSU
award earned during the performance period, subject to reduction or forfeiture based on individual performance, based on the annual performance rating received under our global performance management process. A minimum rating of “strong” or its equivalent is required for any
PSU
awards to be earned. Earned
PSU
s will then vest in two equal installments on March 31 and September 30 of the year following the end of the performance period. The
PSU
awards are subject to forfeiture or acceleration in connection with certain termination of employment or change-in-control events. Each year’s award of
SAR
s is made at the same time as awards are made under our annual equity grant program for employees (generally on or around May 1) and on terms consistent with our standard form of
SAR
award agreement, including a four-year vesting schedule.
In adopting this approach to equity incentive compensation, the compensation committee made the following observations:
|
•
|
The organizational risks of incentive compensation should be reduced through:
|
|
▪
|
the use of multiple equity vehicles (
PSU
s and
SAR
s) with different performance, retention, risk and reward profiles;
|
|
▪
|
annual grants of equity awards that spread the target incentive compensation over multiple and overlapping performance/service periods and provide the flexibility to change performance metrics, weighting and targets from grant to grant; and
|
|
▪
|
the setting of achievable target performance levels, while providing higher payout levels for over-performance.
|
41
|
•
|
The use of performance-based equity awards, such as
PSU
s, adds an element of market risk over the performance/ service period to better align the interests of management and shareholders, while focusing management on achieving specified performance targets to earn the award.
|
|
•
|
The use of conventional equity awards, such as
SAR
s, provides a retention mechanism and alignment with shareholders by only delivering value if the stock price appreciates.
|
|
•
|
Providing for forfeiture or reduction of performance-based equity awards based on individual performance ensures that each participant remains accountable for his or her own performance against performance goals tailored to the participant’s role and responsibilities.
|
2014
Equity Incentive Awards
. The table below sets forth the target annual equity incentive award values for our
NEO
s approved by our compensation committee and the grants of
2014 PSU
s and
SAR
s made to them in March and May
2014
, respectively.
|
Two-thirds of Target
Annual Equity Value in the Form of: |
One-third of Target
Annual Equity Value in the Form of: |
|||||||||
|
Name
|
Target Annual
Equity Value |
Class A
PSU Grant (#) |
Class C
PSU Grant (#) |
Class A
SARs (#) |
Class C
SARs (#) |
|||||
|
Michael T. Fries
|
$15,000,000
|
78,276
|
156,552
|
192,016
|
384,032
|
|||||
|
Charles H.R. Bracken
|
$5,000,000
|
26,092
|
52,184
|
64,000
|
128,000
|
|||||
|
Bernard G. Dvorak
|
$5,000,000
|
26,092
|
52,184
|
64,000
|
128,000
|
|||||
|
Diederik Karsten
|
$5,000,000
|
26,092
|
52,184
|
64,000
|
128,000
|
|||||
|
Balan Nair
|
$5,000,000
|
26,092
|
52,184
|
64,000
|
128,000
|
|||||
The
2014
target annual equity values for each of our
NEO
s was increased for the first time since the compensation committee began granting
PSU
s in 2010 as part of the equity incentive award component of our executive officers’ compensation packages. These increases were made for the reasons cited above for increasing the
NEO
’s salaries for
2014
and based on the research on market levels of compensation of executive officers as stated above. Each
2014 PSU
represents the right to receive one Class A share or Class C share, as applicable, subject to performance and vesting.
The performance period for the
2014 PSU
s is January 1, 2014 to
December 31, 2015
. The performance target selected by the compensation committee for the base case plan was achievement of a target compound annual growth rate in consolidated operating cash flow (
OCF CAGR
) based on a comparison of our
2013
actual results to those reflected in our then existing long-range plan for
2015
. The target
OCF CAGR
is subject to upward or downward adjustment, on a mandatory or a discretionary basis, for certain events in accordance with the terms of the grant agreement. For example, the base case plan from which the target
OCF CAGR
was calculated will be adjusted for the acquisitions of businesses during the performance period in accordance with guidelines established by the compensation committee and the target
OCF CAGR
will be recalculated based on the adjusted base case plan. A performance range of
75%
to
125%
of the target
OCF CAGR
would generally result in award recipients earning
50%
to
150%
of their target
2014 PSU
s, subject to reduction or forfeiture based on individual performance. One-half of the earned
2014 PSU
s will vest on March 31, 2016 and the balance on September 30, 2016.
The compensation committee also established a minimum
OCF CAGR
base performance objective, subject to certain limited adjustments, which must be satisfied in order for any
NEO
to be eligible to earn any of their
2014 PSU
s. If the base performance objective is achieved, our
NEO
s will be eligible to earn between
50%
and
150%
of their
2014 PSU
s, subject to alignment with our company’s and the individual’s performance. The base performance objective was designed so that the awards should qualify as performance-based compensation under Section 162(m).
The
2014 PSU
awards and the
SAR
awards of our
NEO
s are reflected in the Summary Compensation Table below under the “Stock Awards” and “Option Awards” columns, respectively.
42
Decisions for
2013 PSU
s
. As disclosed in our proxy statement for the
2014
AGM
, the performance period for the
2013 PSU
s was January 1, 2013 to
December 31, 2014
. The performance measure was based on a two-year
OCF CAGR
. For the
2013 PSU
s, the performance target was an
OCF CAGR
for our company of 5.1%. The following table sets forth the threshold, target and maximum performance levels and related payouts approved by the compensation committee.
|
Performance
|
|||||
|
Performance
Level
|
Two-year
OCF CAGR
|
Payout
|
|||
|
Maximum
|
125.0%
|
6.4%
|
150.0%
|
||
|
Target
|
100.0%
|
5.1%
|
100.0%
|
||
|
Threshold
|
75.0%
|
3.8%
|
50.0%
|
||
The compensation committee determines the actual payout by “straight-line interpolation” if our actual
OCF CAGR
for the performance period falls between the specified threshold, target and maximum performance levels in the table. The actual
OCF CAGR
for the performance period is calculated by comparing
2014
OCF
against
2012
OCF
, as adjusted for events during the performance period such as acquisitions, dispositions and changes in foreign currency exchange rates and accounting principles or policies that affect comparability. The compensation committee may also adjust the target
OCF CAGR
for extraordinary events that distort performance.
At the February 18, 2015 meeting of our compensation committee, the compensation committee reviewed the calculations of
2012
and
2014
consolidated
OCF
and the resulting
OCF CAGR
, as adjusted pursuant to the terms of the
2013 PSU
grant agreements and guidelines adopted in
2012
by the compensation committee, which had been prepared by management. The compensation committee determined that the base performance objective of achievement of at least
50%
of the target
OCF CAGR
, subject to limited adjustments, had been achieved.
The required adjustments to the target
OCF CAGR
made pursuant to the terms of the
2013 PSU
grant agreements included adjustments (1) to reflect consistent foreign currency exchange translations, (2) to include the pre-acquisition
OCF
for companies acquired during the first year of the performance period (including the acquisition of
Virgin Media
), (3) related to the sale of substantially all of the programming assets of the Chellomedia division, (4) to exclude accounting adjustments related to
Telenet
deferred revenue, and (5) to the pre-acquisition amounts for the 2012 acquisition of a cable system in Puerto Rico. As permitted by the
2013 PSU
grant agreements, the compensation committee also approved adjustments for certain events or circumstances that in its view distorted performance. These discretionary revisions to the target
OCF CAGR
included adjustments to exclude (a) unbudgeted costs for a change in the
U.K.
VAT legislation, (b) the
Ziggo
integration costs, (c) unbudgeted increases in
2014
executive salaries and maximum bonus amounts, (d) the impact of the Chilean earthquake and fire, and (e) an unbudgeted increase in Puerto Rico taxes. These adjustments, in the aggregate, increased our target
OCF
for
2014
from $5.2 billion to
$8.3 billion
and decreased our target
OCF CAGR
for the performance period from 5.1% to 4.5%. For purposes of computing the adjusted actual
OCF CAGR
, the post-acquisition results of 2014 acquisitions, including Ziggo, were removed from the reported 2014
OCF
.
Based on the foregoing, the compensation committee determined that approximately 106.8% of the target
OCF CAGR
had been achieved. This determination was made by dividing the adjusted actual
OCF CAGR
achieved (4.8%) by the adjusted target
OCF CAGR
(4.5%) using maximum available precision. That percentage achievement of the target
OCF CAGR
, which fell between the target and maximum levels in the preceding table, translated into 113.6% of the target
2013 PSU
s being earned, as shown below. The compensation committee further determined that based on each
NEO
’s individual performance over the performance period, no reduction would be made to the percentage of target
2013 PSU
s, which had been earned based on financial performance.
43
The table below sets forth the actual number of the
2013 PSU
s that were earned and which were converted to time-vested
RSU
s pursuant to the terms of the
2013 PSU
s.
|
Name
|
Class A RSUs
|
Class C RSUs
|
||
|
Michael T. Fries
|
33,258*
|
99,774*
|
||
|
Charles H.R. Bracken
|
19,401
|
58,204
|
||
|
Bernard G. Dvorak
|
19,401
|
58,204
|
||
|
Diederik Karsten
|
19,401
|
58,204
|
||
|
Balan Nair
|
19,401
|
58,204
|
||
___________________
* Excludes 11,086 Class A
RSU
s and 33,258 Class C
RSU
s issued to Mr. Fries’ former spouse pursuant to a domestic relations order.
The compensation committee discussed the goals that the
2013 PSU
s had been designed to achieve and was satisfied that these goals had been met. In addition, the senior management team remained highly motivated and intact during the two-year period ended
December 31, 2014
.
CEO Performance Award.
Upon signing the
Fries Agreement
and as provided therein, Mr. Fries received an award of
PSU
s of 1,000,000 Class A shares and 1,000,000 Class B shares (the
CEO Performance Award
). The CEO Performance Award was subject to the achievement of a performance condition over a performance period of April 1, 2014 to
December 31, 2014
. The base performance condition required that either 40% of consolidated budgeted revenue growth or 40% of consolidated budgeted
OFCF
growth be achieved for the nine-month performance period. The base performance objective for the CEO Performance Award was designed so that it should qualify as performance-based compensation under Section 162(m). If the performance condition was achieved, then 100% of the CEO Performance Award would be earned and would vest over three equal annual installments on March 15 of
2015
, 2016 and 2017.
As required by the
Fries Agreement
, the compensation committee met in December
2014
to determine if the performance condition for the CEO Performance Award had been met. At that meeting, the compensation committee reviewed the company’s consolidated revenue and
OFCF
for
2014
to date as well as the projected consolidated revenue and
OFCF
for the remaining period of
2014
. Based on this review, the compensation committee determined that over 95% of budgeted growth for both revenue and
OFCF
was achieved over the nine-month period and therefore the performance condition had been met. As a result, the CEO Performance Award was converted to time vested
RSU
s pursuant to the terms of the CEO Performance Award.
2013 Challenge Awards
.
Following the
Virgin Media Acquisition
, our company grew substantially in size and complexity and became a more complex business operation. In addition, we established aggressive synergy and long-range plan targets for our company on maximizing future performance and our senior management, including our
NEO
s, are being asked to achieve this aggressive future performance. Therefore, on June 24, 2013, the compensation committee determined to grant, in addition to the standard compensation program for senior management as described above, an additional challenge award to each of our
NEO
s and certain key employees (the
2013 Challenge Awards
). The
2013 Challenge Awards
are designed to incentivize senior management recipients to achieve high levels of individual performance and increase shareholder value over a multi-year period.
44
This is in line with the compensation committee’s two primary objectives with respect to executive compensation as stated above—motivation and retention—with the ultimate goal of long-term value creation for our shareholders.
Except with respect to the senior executives, including our
NEO
s, the
2013 Challenge Awards
consist of a combination grant of performance-based
SAR
s and performance-based
PSU
s, with a weighting more heavily to
SAR
s. For the senior executives, including our
NEO
s, the
2013 Challenge Awards
consist solely of a grant of performance-based
SAR
s (
PSAR
s). The awards to the
NEO
s are intended to qualify as performance-based compensation under Section 162(m). Each
PSU
represents the right to receive one Class A share or one Class C share, as applicable, subject to performance and vesting. The performance period for the
2013 Challenge Awards
is January 1, 2013 to
December 31, 2015
.
As the performance measure, the compensation committee selected high levels of individual performance to be sustained throughout the performance period. At the end of the performance period, the compensation committee will review the performance of each executive officer participating in the
2013 Challenge Awards
based on their annual performance rating received in the company’s annual performance review process. If a participant receives a rating of “needs improvement” (or its equivalent) or less, no amount will be payable with respect the
2013 Challenge Awards
. For ratings below “superior” (or its equivalent), the compensation committee has the discretion to reduce by up to 100%, the amount of such participant’s
2013 Challenge Awards
that will vest on the third anniversary of the grant date.
The
PSAR
s have a term of seven years and base prices are equal to the respective market closing prices of the applicable class on the grant date (as adjusted for the
Dividend
), which was
$35.03
for the Class A performance-based
SAR
s,
$32.78
for the original Class C performance-based
SAR
s and
$34.67
for the adjusted Class C performance-based
SAR
s, which were issued with respect to the original Class A performance-based
SAR
s. As stated above, the number of the
2013 Challenge Awards
, which may be earned by any
NEO
, will be based on the compensation committee’s assessment of the executive’s performance and achievement of individual goals in each of the years
2013
,
2014
and
2015
. The individual goals for the
NEO
s and our other executive officers consist of quantitative and qualitative measures, which include individual strategic, financial, transactional, organizational and/or operational goals for each executive.
The
2013 Challenge Awards
are subject to forfeiture or acceleration in connection with certain terminations of employment or change-in-control events consistent with the terms of other equity awards granted in
2013
.
Decisions for
2015
. In March
2015
, the compensation committee approved the grant of
2015 PSU
s to our
NEO
s for two-thirds of their respective target annual equity values, which remained unchanged from
2014
. The
2015 PSU
s will be divided with one-third as Class A
PSU
s and two-thirds as Class C
PSU
s. As the performance measure, the compensation committee again selected growth in consolidated
OCF
, as adjusted for events such as acquisitions, dispositions and changes in foreign currency exchange rates and accounting principles or policies that affect comparability. The target
OCF CAGR
selected by the committee was based upon a comparison of our
2014
actual results to those reflected in our long-range plan for 2016. The target
OCF CAGR
is subject to upward or downward adjustment for certain events in accordance with the terms of the grant agreement. The design of the
2015 PSU
awards is substantially the same as the design of the
2014 PSU
awards described above. For details regarding the target annual equity values for Mr. Fries in connection with the grant of
Annual Equity Awards
under our incentive plans, please see the description of Mr. Fries’ employment agreement under
—Employment and Other Agreements
.
Share Ownership Policy
Our compensation committee has established an
Executive Share Ownership Policy
for our executive officers and senior officers. The purpose of the
Executive Share Ownership Policy
is to ensure that such officers have a significant stake in our long-term success. As a result, the compensation committee established guidelines for ownership of our ordinary shares based on an individual’s level in our company and expressed as a multiple of base salary as follows:
|
Position
|
Guideline
|
|
|
Chief Executive Officer
|
5 times base
|
|
|
Executive Vice Presidents, including Co-Chief Financial Officers
|
4 times base
|
|
|
All Senior Vice Presidents and President of Liberty Global Latin America division
|
3 times base
|
|
Executive and senior officers, who were subject to the policy at the time of adoption, were expected to be in compliance with the ownership guidelines within two years of the policy’s effective date. New executive and senior officers must be in compliance within four years of the date they become subject to the policy. In calculating the value of ordinary shares owned
45
by an executive and a senior officer, the policy includes the value of ordinary shares owned jointly with and separately by the officer’s spouse and minor children, 50% of the value of vested ordinary shares held in the officer’s account in the
401(k) Plan
, and 50% of the in-the-money value of vested options and
SAR
s. As of
December 31, 2014
, the value of the ordinary shares owned by Mr. Fries, as calculated in accordance with the policy, significantly exceeded five times his base salary. In addition, at such date, our other
NEO
s, except Mr. Bracken, were in compliance with the terms of the policy. Although Mr. Bracken was not in compliance at such date, he was back in compliance in early
2015
.
Deferred Compensation Plan
Under the Liberty Global Deferred Compensation Plan (the
Deferred Compensation Plan
), our executive and other officers who are
U.S.
taxpayers (including those of our subsidiaries and divisions) and who are designated as participants from time to time by our compensation committee may elect to defer payment of certain of their compensation as described under
—Deferred Compensation Plan
below. We do not have a pension or other defined benefit-type plan to offer our executive and senior officers. For these executive officers and employees who are based in the
U.S.
,
LGI
contributes to its defined contribution
401(k) Plan
, but such contributions are capped by
U.S.
law. Accordingly, the Deferred Compensation Plan was adopted by the compensation committee to provide a tax-efficient method for participants who are
U.S.
taxpayers to accumulate value, thus enhancing our ability to attract and retain senior management. With respect to the tax ramifications to us of the Deferred Compensation Plan, the compensation committee noted in adopting the plan that the corporate tax deduction on the deferred compensation may not be taken until payments to participants are made, but that we will have use of the cash in the interim. Although our compensation committee deemed the Deferred Compensation Plan to be an important benefit to participants, it is not included in any quantitative valuation with the three main components of our compensation packages, because participation in the plan, and to what extent, is at each participant’s discretion.
Other Benefits
We do not offer perquisites and other personal benefits on a general basis to our executive officers. The personal benefits we have provided are limited in scope and fall into the following principal categories:
|
•
|
limited personal use of our corporate aircraft;
|
|
•
|
an annual auto allowance or use of a company auto for our executive officers working in Europe;
|
|
•
|
an executive health plan; and
|
|
•
|
charitable giving by
Liberty Global
.
|
Under our aircraft policy, our
CEO
, other executive officers and certain senior officers, with our
CEO
’s approval, may use our corporate aircraft for personal travel, subject to reimbursing us for the incremental costs incurred. During the negotiation of his employment agreement, the compensation committee agreed to increase the annual flight hours for Mr. Fries’ personal use of our aircraft to 120 hours per year without cost reimbursement. Also under our aircraft policy, our
CEO
and, with his approval, our other executive officers and certain senior officers may have family members or other personal guests accompany them on our corporate aircraft while traveling on business without reimbursing us for the incremental cost attributable to the personal guest.
The taxable income of an officer will include imputed income equal to the value of the personal use of our aircraft by him and by his personal guests determined using a method based on the Standard Industry Fare Level (
SIFL
) rates, as published by the U.S. Internal Revenue Service (
IRS
) (in the case of
U.S.
taxpayers), or based on the cost of the flight for personal use and based on the cost of a commercial ticket for guests (in the case of
U.K.
and Netherlands taxpayers). Income is imputed only to the extent that the value derived by such applicable method exceeds the amount the officer pays us for such personal use.
The methods we use to determine our incremental cost attributable to personal use of our corporate aircraft are described in the notes to the Summary Compensation Table below. Because our aircraft are used primarily for business travel, this methodology excludes fixed costs that do not change based on usage, such as salaries of pilots and crew, purchase costs of aircraft, and costs of maintenance and upkeep.
For our management-level employees in the
U.K.
, the Netherlands and certain other European countries, including two of our
NEO
s who work in these locations, we provide an annual auto allowance, with variations in the cost of providing this benefit based on the employee’s position and location.
46
We also provide an executive health plan for our executive and senior officers to proactively manage and improve their health. The benefits of this program include a complete medical history review, annual physical examinations, comprehensive laboratory testing, diagnostic testing and consultations with specialists.
Our
NEO
s also participate in various benefit plans offered to all salaried employees in the applicable country of employment. Our
CEO
generally reviews and directs the charitable giving by our company.
Tax and Accounting Considerations
In making its compensation decisions, our compensation committee considers the limitations on deductibility of executive compensation under Section 162(m). That provision prohibits the deduction of compensation in excess of $1.0 million paid to certain executives, subject to certain exceptions. One exception is for performance-based compensation, including options and
SAR
s, granted under shareholder-approved plans such as the
2005 Incentive Plan
,
2014 Incentive Plan
and the
Virgin Media 2010 Incentive Plan
. Our compensation committee generally seeks to design the principal elements of our compensation program, such as annual cash performance awards,
SAR
grants and the terms of our
PSU
awards, to qualify for deductibility consistent with the requirements of Section 162(m). It has not, however, adopted a policy requiring all compensation to be deductible, in order to maintain flexibility in making compensation decisions. For example, the
2014
salary for our
CEO
will not be fully deductible and certain types of compensation, such as non-business use of corporate aircraft without reimbursement and grants of restricted shares and
RSU
s that do not include a performance condition, may not be deductible due to the application of Section 162(m). All grants of restricted shares and
RSU
s to our
NEO
s since 2006 have been performance based. Our compensation committee also endeavors to ensure that any compensation that could be characterized as non-qualified deferred compensation complies with Section 409A of the
Code
.
Our compensation committee also takes into account from time to time, as appropriate, the accounting treatment of compensation elements in determining types and levels of compensation, including method of payment, for our executive officers.
Recoupment Policy
The terms of our
PSU
awards, our annual cash performance awards and our
2013 Challenge Awards
for executive officers, provide that if our consolidated financial statements for any of the years relevant to the determination of whether the applicable performance metrics have been met are required to be restated at any time as a result of an error (whether or not involving fraud or misconduct) and our compensation committee determines that if the financial results had been properly reported the portion of the awards that would have been earned by participants would have been lower than the awards actually earned by them, then each participant will be required to refund and/or forfeit the excess amount of his or her earned award.
Post-Employment Benefits and Change in Control
We have not adopted a severance policy covering our
NEO
s or other executive officers. Certain of our
NEO
s (including our
CEO
) are entitled to limited post-employment benefits under their employment agreements. See
—Employment and Other Agreements
below. Otherwise, they are entitled to the same benefit of accelerated vesting of all or part of conventional equity awards made under the
2005 Incentive Plan
and the
2014 Incentive Plan
on certain termination-of-employment events as other holders of such awards. Similarly, the
2005 Incentive Plan
and the
2014 Incentive Plan
provide the same treatment to all holders of conventional equity awards granted under these plans upon the occurrence of certain change-in-control events. Accordingly, the existence of these potential post-employment and change-in-control benefits has not influenced our compensation committee’s decisions with respect to executive compensation.
In designing the terms for the
PSU
awards and
2013 Challenge Awards
, our compensation committee determined that only a limited set of events would warrant automatic acceleration of awards thereunder. The terms of the
PSU
awards and
2013 Challenge Awards
do not guarantee that any portion of an award will be deemed earned upon termination of employment, except as a result of death, nor that vesting of earned awards will be accelerated upon termination of employment, except as a result of death or disability. Awards will only be accelerated upon specified change-in-control events if the awards are not continued on the same terms and conditions or, in the case of certain corporate reorganization transactions, effective provision has not been made for the assumption or continuation of the awards on equivalent terms.
The compensation committee believed these limited acceleration events related to a change in control provide appropriate protection to participants and would serve to maintain morale and aid retention during the disruptive circumstances of a change
47
in control. The compensation committee reserved discretion to approve the accelerated vesting of an individual’s award or an amendment to an individual’s award agreements when appropriate under the circumstances.
For additional information on post-employment benefits and change-in-control provisions, see
—Potential Payments upon Termination or Change in Control
below.
Timing of Equity Awards
In 2006, our compensation committee adopted a policy that the consideration and approval of proposed annual grants of conventional equity awards to employees, including our
NEO
s, would occur at the compensation committee meeting held in conjunction with our board’s regularly scheduled second quarter meeting each year. Typically this meeting occurs at the end of April or the beginning of May. The exercise price or base price of option and
SAR
grants approved at this meeting is set at the respective closing prices of our Class A shares and Class C shares on the grant date, which is the date of the meeting or, if later, May 1 of the same year. Grants of equity awards to eligible employees would otherwise only be made in connection with significant events, such as hiring or promotion. At this time, our compensation committee intends to follow this same timing for granting equity awards.
For purposes of determining the number of Class A and Class C
PSU
s and
SAR
s to be granted each year for the target annual equity values of our executive officers and other key employees, our compensation committee adopted a policy of using the average of the closing prices of our Class A shares and Class C shares for a trading period ending on the second trading day preceding the date of the committee meeting to approve the grants. Typically, our compensation committee has granted
PSU
s during the first quarter of each year.
Policies Regarding Hedging
Our Insider Trading Policy requires each of our directors and executive officers to pre-clear all proposed transactions in our company’s securities, including hedging or monetization transactions, with the Legal Department or our company’s outside counsel. The policy prohibits short sales of our company’s securities by any director or employee. We do not have a policy that specifically prohibits our directors or executive officers from hedging the economic risk of share ownership.
Compensation Committee Report
The compensation committee has reviewed the
Compensation Discussion and Analysis
above and discussed it with management. Based on such review and discussions, the compensation committee recommended to our board of directors that the
Compensation Discussion and Analysis
be included in this proxy statement.
Submitted by the Members of the
Compensation Committee:
Compensation Committee:
John P. Cole, Jr.
Larry E. Romrell
JC Sparkman (chairman)
48
Summary Compensation
The following table sets forth information concerning the compensation of our named executive officers for fiscal years
2014
,
2013
and
2012
. As discussed in the footnotes and in the
—Narrative to Summary Compensation and Grants of Plan-Based Awards Tables
below, the values presented in the tables do not always reflect the actual compensation received by our
NEO
s during the relevant fiscal year. Amounts paid in British pounds sterling or euros, as the case may be, have been converted into
U.S.
dollars based on the average exchange rate for the applicable year.
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus ($)
|
Stock Awards ($)(1)
|
Option Awards
($)(2)
|
Non-Equity
Incentive Plan Compen-sation ($)(3) |
Change in Pension Value and Nonqualified Deferred
Compensation
Earnings ($)(4)
|
All Other
Compen-sation ($)(5) |
Total ($)
|
||||||||||||||||||
|
Michael T. Fries
|
2014
|
1,863,462
|
|
5,000,000
|
|
(6)
|
89,299,514
|
|
6,598,919
|
|
7,846,000
|
|
262,417
|
|
1,306,424
|
|
112,176,736
|
|
|||||||||
|
Chief Executive
|
2013
|
1,365,385
|
|
—
|
5,567,374
|
|
34,638,020
|
|
3,960,000
|
|
289,424
|
|
1,031,779
|
|
46,851,982
|
|
|||||||||||
|
Officer & President
|
2012
|
996,231
|
|
—
|
5,460,555
|
|
2,998,218
|
|
3,622,000
|
|
150,724
|
|
784,753
|
|
14,012,481
|
|
|||||||||||
|
Charles H.R. Bracken
|
2014
|
1,024,012
|
|
(7)
|
—
|
3,209,838
|
|
1,714,165
|
|
2,452,000
|
|
—
|
|
127,315
|
|
8,527,330
|
|
||||||||||
|
Executive Vice
|
2013
|
730,926
|
|
(7)
|
—
|
2,435,833
|
|
6,610,946
|
|
1,584,000
|
|
—
|
|
93,089
|
|
11,454,794
|
|
||||||||||
|
President & Co-Chief Financial
|
2012
|
638,669
|
|
(7)
|
—
|
2,388,917
|
|
1,190,124
|
|
906,000
|
|
—
|
|
79,596
|
|
5,203,306
|
|
||||||||||
|
Officer (Principal
|
|||||||||||||||||||||||||||
|
Financial Officer)
|
|||||||||||||||||||||||||||
|
Bernard G. Dvorak
|
2014
|
931,731
|
|
(8)
|
—
|
3,209,838
|
|
2,317,581
|
|
2,452,000
|
|
74,633
|
|
19,418
|
|
9,005,201
|
|
||||||||||
|
Executive Vice
|
2013
|
693,192
|
|
—
|
2,435,833
|
|
7,093,581
|
|
1,584,000
|
|
(9)
|
13,808
|
|
20,246
|
|
11,840,660
|
|
||||||||||
|
President & Co-Chief Financial
|
2012
|
534,692
|
|
—
|
2,388,917
|
|
1,311,617
|
|
906,000
|
|
—
|
|
34,543
|
|
5,175,769
|
|
|||||||||||
|
Officer (Principal
|
|||||||||||||||||||||||||||
|
Accounting Officer)
|
|||||||||||||||||||||||||||
|
Diederik Karsten
|
2014
|
975,657
|
|
(10)
|
—
|
3,209,838
|
|
1,714,165
|
|
2,452,000
|
|
—
|
|
184,558
|
|
8,536,218
|
|
||||||||||
|
Executive Vice
|
2013
|
773,100
|
|
(10)
|
—
|
2,435,833
|
|
6,610,946
|
|
1,584,000
|
|
—
|
|
181,492
|
|
11,585,371
|
|
||||||||||
|
President, European
|
2012
|
656,385
|
|
(10)
|
—
|
2,388,917
|
|
1,190,124
|
|
932,000
|
|
—
|
|
162,581
|
|
5,330,007
|
|
||||||||||
|
Broadband Operations
|
|||||||||||||||||||||||||||
|
Balan Nair
|
2014
|
931,731
|
|
—
|
3,209,838
|
|
2,317,581
|
|
2,452,000
|
|
107,873
|
|
45,865
|
|
9,064,888
|
|
|||||||||||
|
Executive Vice
|
2013
|
696,692
|
|
—
|
2,435,833
|
|
7,093,581
|
|
1,584,000
|
|
(9)
|
63,454
|
|
93,524
|
|
11,967,084
|
|
||||||||||
|
President & Chief
|
2012
|
547,692
|
|
—
|
2,388,917
|
|
1,311,617
|
|
932,000
|
|
41,960
|
|
73,553
|
|
5,295,739
|
|
|||||||||||
|
Technology Officer
|
|||||||||||||||||||||||||||
___________________
|
(1)
|
The
2014
dollar amounts shown in the “Stock Awards” column reflect the grant date fair value of each
NEO
’s target
2014 PSU
s determined in accordance with Topic 718 of the Financial Accounting Standards Board’s Accounting Standards Codification (
FASB ASC 718
). The
2014
dollar amounts shown for Mr. Fries reflect the grant date fair value of his target
2014 PSU
s of $9,629,514, plus the grant date value for his CEO Performance Award of $79,670,000. The grant date fair value for the maximum achievable
2014 PSU
awards (150% of target) would be $14,444,271 for Mr. Fries and $4,814,757 for each of the other
NEO
s. Earned
2014 PSU
awards will vest, subject to forfeiture or acceleration under certain circumstances, in two equal installments on each of March 31, 2016 and September 30, 2016. The CEO Performance Award for Mr. Fries will vest in three equal annual installments on March 15 in 2015, 2016 and 2017.
|
|
(2)
|
The
2014
dollar amounts shown in the “Option Awards” column reflect the grant date fair value of
SAR
awards granted to our
NEO
s in
2014
determined in accordance with
FASB ASC 718
. The dollar amounts for the
SAR
awards exclude the impact of estimated forfeitures and assume a risk-free interest rate of 1.77%, a volatility rate of 28.7% and an expected term of 5.1 years with respect to Messrs. Fries, Dvorak and Nair and a risk-free interest rate of 1.31%, a volatility rate of 26.2% and an expected term of 3.9 years with respect to Messrs. Bracken and Karsten. Messrs. Bracken, Dvorak, Karsten and Nair were each granted the same number of
SAR
awards in
2014
. The differences in the grant date fair value of their
SAR
s are attributable to the different valuation assumptions described above, which were applied based on their respective home countries. The
SAR
awards vest 12.5% on November 1, 2014 and thereafter in 14 equal quarterly installments commencing February 1, 2015, and have a seven year term.
|
49
|
(3)
|
The dollar amounts in the “Non-Equity Incentive Plan Compensation” column reflect the annual cash performance awards earned by the
NEO
s under the Incentive Plan during the years indicated. For
2014
, the compensation committee determined the final award amounts at its February 18, 2015 meeting. Except with respect to Mr. Fries, the awards were paid out in March
2015
. The award for Mr. Fries was determined and paid in December
2014
as required under the
Fries Agreement
with a true-up of $224,000 when the compensation committee determined the final awards in February
2015
.
|
|
(4)
|
The dollar amounts shown in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column reflect the above-market value of accrued interest on compensation previously deferred by the applicable
NEO
under our Deferred Compensation Plan. The above-market value of accrued interest is that portion of the accrued interest equal to the amount that exceeds 120% of the applicable federal long-term rate (with compounding) at the time the interest rate under the Deferred Compensation Plan was set.
|
|
(5)
|
The following table provides additional information about the
2014
amounts that appear in the “All Other Compensation” column in the Summary Compensation Table above:
|
|
Name
|
401(k)
Plan (a) |
U.K. Defined
Contribution Plan (b) |
NL Defined Contribution Plan (c)
|
Auto
Allowance |
Miscellaneous (d)
|
Total
|
||||||||||||||||||
|
Michael T. Fries
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,306,424
|
|
$
|
1,306,424
|
|
||||||
|
Charles H.R. Bracken
|
$
|
—
|
|
$
|
98,775
|
|
$
|
—
|
|
$
|
23,864
|
|
$
|
4,676
|
|
$
|
127,315
|
|
||||||
|
Bernard G. Dvorak
|
$
|
17,500
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,918
|
|
$
|
19,418
|
|
||||||
|
Diederik Karsten
|
$
|
—
|
|
$
|
—
|
|
157,395
|
|
$
|
26,431
|
|
$
|
732
|
|
$
|
184,558
|
|
|||||||
|
Balan Nair
|
$
|
17,500
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
28,365
|
|
$
|
45,865
|
|
||||||
____________________
|
(a)
|
Represents matching employer contributions made under the
401(k) Plan
. Under the
401(k) Plan
, participants may make contributions annually, subject to
U.S.
federal limits, and
LGI
makes a matching contribution equal to 100% of the participant’s contribution up to the lesser of the federal limit on contributions or 10% of their cash compensation (excluding awards under Liberty Global’s incentive plans). Voluntary catch-up contributions permitted under
U.S.
federal law for persons age 50 or older, however, are not matched. Messrs. Fries, Dvorak and Nair are fully vested in their respective
401(k) Plan
accounts.
|
|
(b)
|
Represents employer contributions pursuant to the Liberty Global Group Pension Plan in the
U.K.
Under this plan, Liberty Global Europe Ltd. retains a plan provider that assists participating
U.K.
employees with establishing individual pension plans, which are defined contribution personal retirement savings plans. The employer then makes monthly contributions to each participant’s pension plan equal to a percentage of the participant’s monthly base salary, which varies based on age group. For Mr. Bracken, the employer contribution is 9% of his base salary. The maximum employer contribution is 14% of base salary for employees over the age of 60. Participants are required to make a contribution of at least 3% of their base salary to their individual pension plans. The participant’s contributions are not capped although the tax benefits to the participant are significantly less if such participant’s annual contributions exceed
£40,000
(
$65,850
) or a lifetime contribution in excess of
£1.25 million
(
$2.1 million
), as such limits may be changed by the
U.K.
government from time to time. Any employee contributions that exceed such limits are paid as a taxable pension allowance. Participating
U.K.
employees, including Mr. Bracken, are fully vested in the employer contributions to their respective pension plans.
|
|
(c)
|
Represents employer contributions pursuant to the Dutch Liberty Global Pension Plan in the Netherlands. This is a defined contribution plan and Liberty Global B.V., f/k/a Liberty Global Europe B.V. (
LG BV
), retains an insurance company to execute the Dutch Liberty Global Pension Plan. This plan also includes a survivor’s pension and insurance covering a waiver of premium payment into the plan in the case of disability. The employer makes a contribution to each participant’s pension plan equal to a percentage of the participant’s pensionable salary (annual base salary minus an offset), which varies based on age group. The employer also pays the contributions for the pension plan insurance. For Mr. Karsten, the employer contribution is 16.9% of his pensionable salary up to a maximum salary of
€600,000
(
$796,039
). Participants are required to make a contribution of at least 3% of their pensionable base salary to their individual pension plans. Participating Netherlands employees, including Mr. Karsten, are fully vested in the employer contributions to their respective pension plans.
|
|
(d)
|
Amounts reflect the following:
|
|
•
|
Premiums for term life insurance for Messrs. Fries (
$1,656
), Dvorak (
$1,656
) and Nair (
$2,124
) under our group term life insurance benefit plan for
U.S.
employees.
|
50
|
•
|
Premiums for term life insurance for Mr. Bracken (
$810
) under Liberty Global Europe Ltd.’s group life assurance policy for
U.K.
employees.
|
|
•
|
Payments made on behalf of Messrs. Fries and Nair under our executive health plan.
|
|
•
|
Our aggregate incremental cost attributable to personal use of our aircraft or having a personal guest on a business flight by each of the following
NEO
s is: Mr. Fries (
$291,023
), Mr. Bracken (
$3,866
), Mr. Karsten (
$732
) and Mr. Nair (
$5,705
). Aggregate incremental cost for personal use of our aircraft is determined on a per flight basis and includes fuel, oil, lubricants, hourly costs of aircraft maintenance for the applicable number of flight hours, in-flight food and beverage services, trip-related hangar and tie down costs, landing and parking fees, travel expenses for crew and other variable costs specifically incurred. Aggregate incremental cost for a personal guest is determined based on our average direct variable costs per passenger for fuel and in-flight food and beverage services, plus, when applicable, customs and immigration fees specifically incurred.
|
|
•
|
The cost of memberships in certain professional organizations for Mr. Fries.
|
|
•
|
The tax gross-up of
$262
on gifts from us to Messrs. Dvorak, Fries and Nair valued at approximately $300.
|
|
•
|
Pursuant to the terms of the
Fries Agreement
, payment made on behalf of Mr. Fries for professional fees incurred by him in the preparation and negotiation of his employment agreement (
$289,687
), plus the related tax gross-up (
$252,595
).
|
|
•
|
Contributions to several charitable and non-profit organizations made by
Liberty Global
at the request of Mr. Fries. Such contributions aggregated
$444,545
and are not included in Mr. Fries’
Liberty Global
income for tax purposes. Of the organizations that received such contributions, Mr. Fries is a member of the board of four of the organizations and on the advisory board of another organization to which
Liberty Global
contributed. The contributions to these organizations were $193,000 in the aggregate.
|
|
•
|
Liberty Global
matched $17,500 in charitable contributions by Mr. Nair through its company-match program, which is open to all employees. Such contributions are not included in Mr. Nair’s
Liberty Global
income for tax purposes.
|
|
•
|
During
2014
, Messrs. Fries and Nair each used sporting and concert event tickets that resulted in an incremental cost to us of approximately $1,000 in the case of Mr. Fries and less than $1,000 in the case of Mr. Nair.
|
|
(6)
|
Represents a $5.0 million commitment bonus paid to Mr. Fries at the time the
Fries Agreement
was signed in April 2014.
|
|
(7)
|
For the years indicated, Mr. Bracken received all or a portion of his salary, perquisites and employee benefits in British pounds, which have been converted for this presentation to
U.S.
dollars based upon the average exchange rate in effect during each respective year (0.6074 for
2014
, 0.6396 for
2013
and 0.6310 for
2012
).
|
|
(8)
|
Amount includes $493,817 of Mr. Dvorak’s salary, the payment of which Mr. Dvorak elected to defer pursuant to our Deferred Compensation Plan. Such deferred amount accrues interest at the rate of 9% per annum compounded daily until paid in full. The amount deferred, plus accrued interest, will be paid in four equal annual installments upon the earlier of Mr. Dvorak’s separation of service or a change in control of Liberty Global.
|
|
(9)
|
The 2013 annual cash performance award amount includes $792,000 for each of Mr. Dvorak and Mr. Nair, deferred at their respective elections pursuant to our Deferred Compensation Plan at the time such award was paid in 2014. Such deferred amount, plus accrued interest at the rate of 9% per annum, compounds daily until paid in full. With respect to Mr. Dvorak, the amount deferred, plus accrued interest, will be paid in four equal annual installments upon the earlier of his separation of service or a change in control of Liberty Global. With respect to Mr. Nair, the amount deferred, plus accrued interest, will be paid on the earlier of July 10, 2022, his separation of service or a change in control of Liberty Global.
|
|
(10)
|
For the years indicated, Mr. Karsten received all or a portion of his salary, perquisites and employee benefits in euros, which have been converted for this presentation to
U.S.
dollars based upon the average exchange rate in effect during each respective year (0.7537 for
2014
, 0.7530 for
2013
and 0.7779 for
2012
).
|
51
Grants of Plan-Based Awards
The table below sets forth certain information concerning the grants of equity based awards and the annual cash performance awards granted to our named executive officers under the
2014 Incentive Plan
during the year ended
December 31, 2014
, as described below under
—Narrative to Summary Compensation and Grants of Plan-Based Awards Tables.
The actual amount of the
2014
cash performance award approved for each named executive officer is reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above.
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
All other Option Awards Number of Securities Underlying Options (#)
|
Exercise or Base Price of Option Awards ($/sh)
|
Grant Date Fair Value of Stock & Option Awards
($)
|
||||||||||||||||||||||||
|
Name
|
Grant Date
|
Threshold ($)
|
Target
($) |
Maximum
($) |
Threshold
(#) |
Target
(#) |
Maximum
(#) |
|||||||||||||||||||||
|
Michael T. Fries
|
03/31/2014
|
—
|
|
—
|
|
8,000,000
|
|
|||||||||||||||||||||
|
Class A
|
03/31/2014
|
39,138
|
|
78,276
|
|
117,414
|
|
3,256,282
|
|
|||||||||||||||||||
|
Class C
|
03/31/2014
|
78,276
|
|
156,552
|
|
234,828
|
|
6,373,232
|
|
|||||||||||||||||||
|
Class A
|
04/30/2014
|
|
|
—
|
|
—
|
|
1,000,000
|
|
|
39,820,000
|
|
||||||||||||||||
|
Class B
|
04/30/2014
|
|
|
—
|
|
—
|
|
1,000,000
|
|
|
39,850,000
|
|
||||||||||||||||
|
Class A
|
05/01/2014
|
192,016
|
|
40.91
|
2,266,872
|
|
||||||||||||||||||||||
|
Class C
|
05/01/2014
|
384,032
|
|
39.09
|
4,332,047
|
|
||||||||||||||||||||||
|
Charles H.R. Bracken
|
03/31/2014
|
—
|
|
—
|
|
2,500,000
|
|
|||||||||||||||||||||
|
Class A
|
03/31/2014
|
13,046
|
|
26,092
|
|
39,138
|
|
1,085,427
|
|
|||||||||||||||||||
|
Class C
|
03/31/2014
|
26,092
|
|
52,184
|
|
78,276
|
|
2,124,411
|
|
|||||||||||||||||||
|
Class A
|
05/01/2014
|
64,000
|
|
40.91
|
588,853
|
|
||||||||||||||||||||||
|
Class C
|
05/01/2014
|
128,000
|
|
39.09
|
1,125,312
|
|
||||||||||||||||||||||
|
Bernard G. Dvorak
|
03/31/2014
|
—
|
|
—
|
|
2,500,000
|
|
|||||||||||||||||||||
|
Class A
|
03/31/2014
|
13,046
|
|
26,092
|
|
39,138
|
|
1,085,427
|
|
|||||||||||||||||||
|
Class C
|
03/31/2014
|
26,092
|
|
52,184
|
|
78,276
|
|
2,124,411
|
|
|||||||||||||||||||
|
Class A
|
05/01/2014
|
64,000
|
|
40.91
|
755,561
|
|
||||||||||||||||||||||
|
Class C
|
05/01/2014
|
128,000
|
|
39.09
|
1,443,895
|
|
||||||||||||||||||||||
|
Diederik Karsten
|
03/31/2014
|
—
|
|
—
|
|
2,500,000
|
|
|||||||||||||||||||||
|
Class A
|
03/31/2014
|
13,046
|
|
26,092
|
|
39,138
|
|
1,085,427
|
|
|||||||||||||||||||
|
Class C
|
03/31/2014
|
26,092
|
|
52,184
|
|
78,276
|
|
2,124,411
|
|
|||||||||||||||||||
|
Class A
|
05/01/2014
|
64,000
|
|
40.91
|
588,853
|
|
||||||||||||||||||||||
|
Class C
|
05/01/2014
|
128,000
|
|
39.09
|
1,125,312
|
|
||||||||||||||||||||||
|
Balan Nair
|
03/31/2014
|
—
|
|
—
|
|
2,500,000
|
|
|||||||||||||||||||||
|
Class A
|
03/31/2014
|
13,046
|
|
26,092
|
|
39,138
|
|
1,085,427
|
|
|||||||||||||||||||
|
Class C
|
03/31/2014
|
26,092
|
|
52,184
|
|
78,276
|
|
2,124,411
|
|
|||||||||||||||||||
|
Class A
|
05/01/2014
|
64,000
|
|
40.91
|
755,561
|
|
||||||||||||||||||||||
|
Class C
|
05/01/2014
|
128,000
|
|
39.09
|
1,443,895
|
|
||||||||||||||||||||||
Narrative to Summary Compensation and Grants of Plan-Based Awards Tables
The amounts reported for
2014
in the Summary Compensation Table include salary, annual cash performance awards, a commitment bonus (in the case of Mr. Fries only), equity incentive grants, benefits and perquisites as more fully described in
—Elements of Our Compensation Packages
above. The following discussion focuses on the annual cash performance award component of
2014
total compensation reflected in the Grants of Plan-Based Awards Table above. Additional information with respect to the other components of
2014
compensation is provided in the notes to the Summary Compensation Table above. The vesting and forfeiture provisions applicable to the
2014 PSU
awards are discussed in
—Elements of Our Compensation Packages—Equity Incentive Awards
above. For information on the effect of a termination or change in control on the
2014 PSU
awards, see
—Potential Payments upon Termination or Change in Control
below.
52
The maximum achievable amount of the
2014
annual cash performance awards for each of our
NEO
s is shown in the Grants of Plan-Based Awards Table under the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” column. Because the compensation committee has discretion to pay no award notwithstanding the achievement of the base performance objective, no “threshold” or minimum awards are reflected in the Grants of Plan-Based Awards Table. The amount each
NEO
actually earned of his
2014
annual cash performance award is reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
Outstanding Equity Awards at Fiscal Year-End
The table below sets forth certain information concerning options,
SAR
s and restricted shares or units held by our
NEO
s at year end
2014
.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||||||
|
Name
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options (#)
|
Option Exercise Price
($)
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
|
Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
|
||||||||||||||||||||
|
Michael T. Fries
|
|||||||||||||||||||||||||||||
|
Class A
|
67,960
|
|
—
|
|
|
13.81
|
|
5/1/2017
|
33,258
|
|
(6)
|
1,669,884
|
|
78,276
|
|
(7)
|
3,930,238
|
|
|||||||||||
|
40,138
|
|
5,734
|
|
(1)
|
23.37
|
|
5/1/2018
|
1,000,000
|
|
(8)
|
50,210,000
|
|
|||||||||||||||||
|
27,145
|
|
16,287
|
|
(2)
|
25.12
|
|
5/1/2019
|
||||||||||||||||||||||
|
15,348
|
|
25,580
|
|
(3)
|
37.23
|
|
5/1/2020
|
||||||||||||||||||||||
|
24,002
|
|
168,014
|
|
(4)
|
40.91
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
925,000
|
|
(5)
|
35.03
|
|
6/24/2020
|
||||||||||||||||||||||
|
Class B
|
1,000,000
|
|
(8)
|
50,730,000
|
|
||||||||||||||||||||||||
|
Class C
|
67,960
|
|
—
|
|
|
13.67
|
|
5/1/2017
|
99,774
|
|
(6)
|
5,009,653
|
|
156,552
|
|
(7)
|
7,126,247
|
|
|||||||||||
|
135,920
|
|
—
|
|
|
13.54
|
|
5/1/2017
|
||||||||||||||||||||||
|
40,138
|
|
5,734
|
|
(1)
|
23.13
|
|
5/1/2018
|
||||||||||||||||||||||
|
80,276
|
|
11,468
|
|
(1)
|
22.20
|
|
5/1/2018
|
||||||||||||||||||||||
|
27,145
|
|
16,287
|
|
(2)
|
24.87
|
|
5/1/2019
|
||||||||||||||||||||||
|
54,290
|
|
32,574
|
|
(2)
|
24.10
|
|
5/1/2019
|
||||||||||||||||||||||
|
15,348
|
|
25,580
|
|
(3)
|
36.85
|
|
5/1/2020
|
||||||||||||||||||||||
|
30,696
|
|
51,160
|
|
(3)
|
34.41
|
|
5/1/2020
|
||||||||||||||||||||||
|
48,004
|
|
336,028
|
|
(4)
|
39.09
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
|
925,000
|
|
(5)
|
34.67
|
|
6/24/2020
|
|||||||||||||||||||
|
|
|
|
|
|
1,850,000
|
|
(5)
|
32.78
|
|
6/24/2020
|
|||||||||||||||||||
|
Charles H.R. Bracken
|
|||||||||||||||||||||||||||||
|
Class A
|
35,112
|
|
5,016
|
|
(1)
|
23.37
|
|
5/1/2018
|
19,401
|
|
(6)
|
974,124
|
|
26,092
|
|
(7)
|
1,310,079
|
|
|||||||||||
|
23,750
|
|
14,250
|
|
(2)
|
25.12
|
|
5/1/2019
|
||||||||||||||||||||||
|
13,428
|
|
22,380
|
|
(3)
|
37.23
|
|
5/1/2020
|
||||||||||||||||||||||
|
8,000
|
|
56,000
|
|
(3)
|
40.91
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
|
35.03
|
|
6/24/2020
|
||||||||||||||||||||||
|
Class C
|
35,112
|
|
5,016
|
|
(1)
|
23.13
|
|
5/1/2018
|
58,204
|
|
(6)
|
2,811,835
|
|
52,184
|
|
(7)
|
2,521,009
|
|
|||||||||||
|
70,224
|
|
10,032
|
|
(1)
|
22.20
|
|
5/1/2018
|
||||||||||||||||||||||
|
23,750
|
|
14,250
|
|
(2)
|
24.87
|
|
5/1/2019
|
||||||||||||||||||||||
|
47,500
|
|
28,500
|
|
(2)
|
24.10
|
|
5/1/2019
|
||||||||||||||||||||||
|
13,428
|
|
22,380
|
|
(3)
|
36.85
|
|
5/1/2020
|
||||||||||||||||||||||
|
26,856
|
|
44,760
|
|
(3)
|
34.41
|
|
5/1/2020
|
||||||||||||||||||||||
|
16,000
|
|
112,000
|
|
(4)
|
39.09
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
|
162,500
|
|
(5)
|
34.67
|
|
6/24/2020
|
|||||||||||||||||||
|
|
|
|
|
|
325,000
|
|
(5)
|
32.78
|
|
6/24/2020
|
|||||||||||||||||||
53
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||||||
|
Name
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options (#)
|
Option Exercise Price
($)
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
|
Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
|
||||||||||||||||||||
|
Bernard G. Dvorak
|
|||||||||||||||||||||||||||||
|
Class A
|
59,472
|
|
—
|
|
|
13.81
|
|
5/1/2017
|
19,401
|
|
(6)
|
974,124
|
|
26,092
|
|
(7)
|
1,310,079
|
|
|||||||||||
|
35,112
|
|
5,016
|
|
(1)
|
23.37
|
|
5/1/2018
|
||||||||||||||||||||||
|
23,750
|
|
14,250
|
|
(2)
|
25.12
|
|
5/1/2019
|
||||||||||||||||||||||
|
13,428
|
|
22,380
|
|
(3)
|
37.23
|
|
5/1/2020
|
||||||||||||||||||||||
|
8,000
|
|
56,000
|
|
(4)
|
40.91
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
|
162,500
|
|
(5)
|
35.03
|
|
6/24/2020
|
|||||||||||||||||||
|
Class C
|
59,472
|
|
—
|
|
|
13.67
|
|
5/1/2017
|
58,204
|
|
(6)
|
2,811,835
|
|
52,184
|
|
(7)
|
2,521,009
|
|
|||||||||||
|
118,944
|
|
—
|
|
|
13.54
|
|
5/1/2017
|
||||||||||||||||||||||
|
35,112
|
|
5,016
|
|
(1)
|
23.13
|
|
5/1/2018
|
||||||||||||||||||||||
|
70,224
|
|
10,032
|
|
(1)
|
22.20
|
|
5/1/2018
|
||||||||||||||||||||||
|
23,750
|
|
14,250
|
|
(2)
|
24.87
|
|
5/1/2019
|
||||||||||||||||||||||
|
47,500
|
|
28,500
|
|
(2)
|
24.10
|
|
5/1/2019
|
||||||||||||||||||||||
|
13,428
|
|
22,380
|
|
(3)
|
36.85
|
|
5/1/2020
|
||||||||||||||||||||||
|
26,856
|
|
44,760
|
|
(3)
|
34.41
|
|
5/1/2020
|
||||||||||||||||||||||
|
16,000
|
|
112,000
|
|
(4)
|
39.09
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
|
162,500
|
|
(5)
|
34.67
|
|
6/24/2020
|
|||||||||||||||||||
|
|
|
|
|
|
325,000
|
|
(5)
|
32.78
|
|
6/24/2020
|
|||||||||||||||||||
|
Diederik Karsten
|
|||||||||||||||||||||||||||||
|
Class A
|
7,750
|
|
—
|
|
8.39
|
|
5/1/2016
|
19,401
|
|
(6)
|
974,124
|
|
26,092
|
|
(7)
|
1,310,079
|
|
||||||||||||
|
6,954
|
|
—
|
|
7.40
|
|
5/1/2016
|
|||||||||||||||||||||||
|
18,578
|
|
—
|
|
|
13.81
|
|
5/1/2017
|
||||||||||||||||||||||
|
35,112
|
|
5,016
|
|
(1)
|
23.37
|
|
5/1/2018
|
||||||||||||||||||||||
|
23,750
|
|
14,250
|
|
(2)
|
25.12
|
|
5/1/2019
|
||||||||||||||||||||||
|
13,428
|
|
22,380
|
|
(3)
|
37.23
|
|
5/1/2020
|
||||||||||||||||||||||
|
8,000
|
|
56,000
|
|
(4)
|
40.91
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
|
162,500
|
|
(5)
|
35.03
|
|
6/24/2020
|
|||||||||||||||||||
|
Class C
|
7,750
|
|
—
|
|
|
8.31
|
|
5/1/2016
|
58,204
|
|
(6)
|
2,811,835
|
|
52,184
|
|
(7)
|
2,521,009
|
|
|||||||||||
|
15,500
|
|
—
|
|
|
8.28
|
|
5/1/2016
|
||||||||||||||||||||||
|
6,954
|
|
—
|
|
|
7.33
|
|
5/1/2016
|
||||||||||||||||||||||
|
13,908
|
|
—
|
|
|
7.25
|
|
5/1/2016
|
||||||||||||||||||||||
|
18,578
|
|
—
|
|
|
13.67
|
|
5/1/2017
|
||||||||||||||||||||||
|
37,156
|
|
—
|
|
|
13.54
|
|
5/1/2017
|
||||||||||||||||||||||
|
35,112
|
|
5,016
|
|
(1)
|
23.13
|
|
5/1/2018
|
||||||||||||||||||||||
|
70,224
|
|
10,032
|
|
(1)
|
22.20
|
|
5/1/2018
|
||||||||||||||||||||||
|
23,750
|
|
14,250
|
|
(2)
|
24.87
|
|
5/1/2019
|
||||||||||||||||||||||
|
47,500
|
|
28,500
|
|
(2)
|
24.10
|
|
5/1/2019
|
||||||||||||||||||||||
|
13,428
|
|
22,380
|
|
(3)
|
36.85
|
|
5/1/2020
|
||||||||||||||||||||||
|
26,856
|
|
44,760
|
|
(3)
|
34.41
|
|
5/1/2020
|
||||||||||||||||||||||
|
16,000
|
|
112,000
|
|
(4)
|
39.09
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
|
162,500
|
|
(5)
|
34.67
|
|
6/24/2020
|
|||||||||||||||||||
|
|
|
|
|
|
325,000
|
|
(5)
|
32.78
|
|
6/24/2020
|
|||||||||||||||||||
54
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||||||
|
Name
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options (#)
|
Option Exercise Price
($)
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
|
Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
|
||||||||||||||||||||
|
Balan Nair
|
|||||||||||||||||||||||||||||
|
Class A
|
25,488
|
|
—
|
|
|
13.81
|
|
5/1/2017
|
19,401
|
|
(6)
|
974,124
|
|
26,092
|
|
(7)
|
1,310,079
|
|
|||||||||||
|
35,112
|
|
5,016
|
|
(1)
|
23.37
|
|
5/1/2018
|
||||||||||||||||||||||
|
23,750
|
|
14,250
|
|
(2)
|
25.12
|
|
5/1/2019
|
||||||||||||||||||||||
|
13,428
|
|
22,380
|
|
(3)
|
37.23
|
|
5/1/2020
|
||||||||||||||||||||||
|
8,000
|
|
56,000
|
|
(4)
|
40.91
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
|
162,500
|
|
(5)
|
35.03
|
|
6/24/2020
|
|||||||||||||||||||
|
Class C
|
25,488
|
|
—
|
|
|
13.67
|
|
5/1/2017
|
58,204
|
|
(6)
|
2,811,835
|
|
52,184
|
|
(7)
|
2,521,009
|
|
|||||||||||
|
50,976
|
|
—
|
|
|
13.54
|
|
5/1/2017
|
||||||||||||||||||||||
|
35,112
|
|
5,016
|
|
(1)
|
23.13
|
|
5/1/2018
|
||||||||||||||||||||||
|
70,224
|
|
10,032
|
|
(1)
|
22.20
|
|
5/1/2018
|
||||||||||||||||||||||
|
23,750
|
|
14,250
|
|
(2)
|
24.87
|
|
5/1/2019
|
||||||||||||||||||||||
|
47,500
|
|
28,500
|
|
(2)
|
24.10
|
|
5/1/2019
|
||||||||||||||||||||||
|
13,428
|
|
22,380
|
|
(3)
|
36.85
|
|
5/1/2020
|
||||||||||||||||||||||
|
26,856
|
|
44,760
|
|
(3)
|
34.41
|
|
5/1/2020
|
||||||||||||||||||||||
|
16,000
|
|
112,000
|
|
(4)
|
39.09
|
|
5/1/2021
|
||||||||||||||||||||||
|
|
|
|
|
162,500
|
|
(5)
|
34.67
|
|
6/24/2020
|
||||||||||||||||||||
|
|
|
|
|
325,000
|
|
(5)
|
32.78
|
|
6/24/2020
|
||||||||||||||||||||
___________________
|
(1)
|
Vests in 2 equal remaining quarterly installments from February 1, 2015 to May 1, 2015.
|
|
(2)
|
Vests in 6 equal remaining quarterly installments from February 1, 2015 to May 1, 2016.
|
|
(3)
|
Vests in 10 equal remaining quarterly installments from February 1, 2015 to May 1, 2017.
|
|
(4)
|
Vests in 14 equal remaining quarterly installments from February 1, 2015 to May 1, 2018.
|
|
(5)
|
Represents the target number of Class A and Class C shares subject to the performance-based
SAR
s of the
2013 Challenge Awards
that may be earned by each of our
NEO
s. If earned, these performance-based
SAR
s will vest on June 24, 2016.
|
|
(6)
|
Represents the number of Class A and Class C shares underlying
2013 PSU
s that were actually earned by each of our
NEO
s as determined by the compensation committee in February
2015
. These awards were then converted to time-vested
RSU
s vesting in two equal installments on
March 31, 2015
and September 30, 2015. See —
Elements of Our Compensation Packages
—
Equity Incentive Awards
—
Decisions for
2013 PSU
s
above.
|
|
(7)
|
Represents the target number of Class A and Class C shares underlying
2014 PSU
s that may be earned by each of our
NEO
s. If earned, the
2014 PSU
s will vest in two equal installments on March 31, 2016 and September 30, 2016, respectively.
|
|
(8)
|
Represents the number of Class A and Class B shares underlying the CEO Performance Award that was earned by our
CEO
as determined by the compensation committee in December 2014. These awards were then converted to time-vested
RSU
s vesting in three equal annual installments on March 15, 2015, 2016 and 2017. See —
Elements of Our Compensation Packages
—
Equity Incentive Awards
—
CEO Performance Award
.
|
55
Option Exercises and Shares Vested
The table below sets forth certain information concerning each exercise of options or
SAR
s by, and each vesting of restricted shares or
RSU
s of, our named executive officers during the year ended
December 31, 2014
.
|
Option Awards
|
Stock Awards
|
||||||||||||||
|
Name
|
Number of
Shares Acquired on Exercise (#) |
Value Realized
on Exercise ($)(1) |
Number of
Shares Acquired on Vesting (#)(2) |
Value Realized
on Vesting ($)(1) |
|||||||||||
|
Michael T. Fries
|
|||||||||||||||
|
Class A
|
73,809
|
|
(3)
|
2,526,420
|
|
18,041
|
|
|
758,895
|
|
|||||
|
Class C
|
221,425
|
|
(3)
|
7,337,250
|
|
54,123
|
|
|
2,211,602
|
|
|||||
|
Charles H.R. Bracken
|
|||||||||||||||
|
Class A
|
36,151
|
|
(4)
|
1,154,301
|
|
15,785
|
|
663,996
|
|
||||||
|
Class C
|
108,453
|
|
(4)
|
3,329,146
|
|
47,355
|
|
1,935,044
|
|
||||||
|
Bernard G. Dvorak
|
|||||||||||||||
|
Class A
|
—
|
|
—
|
|
15,785
|
|
|
663,996
|
|
||||||
|
Class C
|
—
|
|
—
|
|
47,355
|
|
|
1,935,044
|
|
||||||
|
Diederik Karsten
|
|||||||||||||||
|
Class A
|
—
|
|
—
|
|
15,785
|
|
663,996
|
|
|||||||
|
Class C
|
—
|
|
—
|
|
47,355
|
|
1,935,044
|
|
|||||||
|
Balan Nair
|
|||||||||||||||
|
Class A
|
17,500
|
|
(5)
|
382,602
|
|
15,785
|
|
|
663,996
|
|
|||||
|
Class C
|
52,500
|
|
(5)
|
1,082,060
|
|
47,355
|
|
|
1,935,044
|
|
|||||
___________________
|
(1)
|
Value reflects the aggregate amount of awards for Class A and Class C shares exercised or vested in
2014
.
|
|
(2)
|
Includes shares withheld by us to pay the minimum withholding tax due upon vesting of the
RSU
s in
2014
.
|
|
(3)
|
Consists of shares underlying options, which were exercised at the election of Mr. Fries.
|
|
(4)
|
Consists of Class A shares and Class C shares subject to
SAR
s, which were exercised at the election of Mr. Bracken. The actual number of shares issued to Mr. Bracken upon exercise of these
SAR
s, after taking into account the spread between the base price and the closing market price and giving effect to the withholding of shares for taxes, was
13,375
Class A shares and
39,846
Class C shares.
|
|
(5)
|
Consists of shares underlying options, which were exercised at the election of Mr. Nair.
|
Deferred Compensation Plan
The Deferred Compensation Plan became effective with respect to compensation payable in 2009. Prior to January 1, 2013, only our executive officers (including our
CEO
) and certain senior officers, who are
U.S.
taxpayers, could participate in the Deferred Compensation Plan. As of January 1, 2013, management expanded the Deferred Compensation Plan to allow participation by other officers who are also
U.S.
taxpayers.
Each designated participant may elect to defer all or any portion of his or her (1) annual cash performance award, (2) annual salary up to limits specified by the compensation committee (currently 90%), and (3) award, if any, under a current or future multi-year performance award arrangement. Initially cash compensation deferred under the Deferred Compensation Plan was credited with interest at the rate of
9%
per year, compounded quarterly at the end of each calendar quarter (the credited interest fund). In setting the interest rate, our compensation committee reviewed data on the implied yields of our significant bank debt and outstanding bonds, as well as credit market conditions. The compensation committee reserved the right to change the interest rate in the future, provided that any decreases in the rate will apply only to deferred elections that become irrevocable after the new rate is set. Commencing with compensation deferred in 2013, such rate is compounded daily in order to facilitate better administration on a new online platform. The compensation committee made no modification to this rate in its
2014
annual review. Deferred equity awards will not be credited with interest, but will be adjusted for splits, combinations, dividends or distributions. If the compensation committee approves the establishment of one or more phantom investment funds for purposes of the Deferred Compensation Plan, a participant may, but will not be obligated to, elect one or more of such phantom
56
investment funds as the measurement fund for the purpose of calculating notional earnings, losses and other relevant amounts to be credited to or deducted from all or a portion of his or her deferred compensation instead of the credited interest fund.
The Deferred Compensation Plan provides our compensation committee with the discretion to terminate the Deferred Compensation Plan within 12 months of certain change-in-control events and distribute each participant’s account balance. Otherwise, the amount of compensation deferred will be distributed in a lump sum or in up to three installments upon the date or dates selected by the participant, or in up to five equal annual installments, or in a lump sum when the participant ceases to be an employee of our company. At the participant’s request, if the compensation committee determines that such participant has suffered a financial hardship, it may authorize immediate distribution of all or a portion of his or her account balance. The compensation committee has reserved the right to terminate the Deferred Compensation Plan at any time. Such an optional termination will not result in accelerated distributions.
Of our
NEO
s, only Mr. Fries, Mr. Dvorak and Mr. Nair have deferred compensation under the Deferred Compensation Plan. The table below sets forth certain information concerning the deferred compensation of these officers at year end
2014
.
|
Name
|
Executive Contribution in Last FY
|
Aggregate Earnings in Last FY (1)
|
Aggregate Withdrawals / Distributions
|
Aggregate Balance at Last FYE
|
||||||||||||||
|
Michael T. Fries
|
$
|
—
|
|
$
|
673,538
|
|
$
|
1,026,513
|
|
$
|
4,295,538
|
|
(2)
|
|||||
|
Bernard G. Dvorak
|
$
|
1,285,817
|
|
(3)
|
$
|
143,596
|
|
$
|
—
|
|
$
|
1,879,988
|
|
(4)
|
||||
|
Balan Nair
|
$
|
792,000
|
|
(5)
|
$
|
163,440
|
|
$
|
636,789
|
|
$
|
1,560,778
|
|
(6)
|
||||
___________________
|
(1)
|
Of these amounts, the following were reported in the Summary Compensation Table as above-market earnings that were credited to the
NEO
’s account during
2014
.
|
|
Name
|
Amount ($)
|
|||
|
Michael T. Fries
|
$
|
262,417
|
|
|
|
Bernard G. Dvorak
|
$
|
74,633
|
|
|
|
Balan Nair
|
$
|
107,873
|
|
|
|
(2)
|
Includes annual cash performance awards of $1,718,000 contributed in 2013 and $1,903,200 contributed in 2012.
|
|
(3)
|
Includes salary of $493,817 and annual cash performance award of $792,000 contributed in 2014.
|
|
(4)
|
Includes salary of $450,575 contributed in 2013.
|
|
(5)
|
Consists of annual cash performance award contributed in 2014.
|
|
(6)
|
Includes salary of $139,388 and annual cash performance award of $228,100 each contributed in 2013.
|
Employment and Other Agreements
On April 30, 2014, we entered into a multi-year employment agreement with Mr. Fries to serve as our
CEO
. We do not presently have employment agreements with Messrs. Dvorak or Nair or any of our other
U.S.
-based executive officers. As is customary in the
U.K.
and the Netherlands, we have employment agreements with each of Mr. Bracken and Mr. Karsten.
We have not otherwise adopted a severance policy covering our executive officers. Each of our
NEO
s also holds equity awards granted under the
2014 Incentive Plan
and the
2005 Incentive Plan
. These plans are described below under
Incentive Plans
.
Michael T. Fries
Introduction
. In 2014, our board of directors and the compensation committee determined that it was in our company’s best interest to enter into an employment agreement with Mr. Fries to serve as our
CEO
in order to promote stability in management, secure his services for the long term, implement appropriate restrictive covenants and recognize his outstanding performance and our company’s success under his leadership. Mr. Fries was not previously subject to an employment agreement with us.
57
Although we are incorporated in the
U.K.
, our ordinary shares are listed and traded on the NASDAQ Global Select Market, and Mr. Fries is based in Denver, Colorado. Consequently, the compensation for Mr. Fries, and the terms of the
Fries Agreement
, are based on
U.S.
customs and standards as we are competing with
U.S.
companies for senior management personnel based in the
U.S.
U.K.
law requires that the compensation of our directors (including that of Mr. Fries who is a member of our board of directors), including historical compensation, whether awarded on terms subject to
U.S.
law or not, be consistent with a compensation policy approved by our shareholders. In accordance with these regulations, our shareholders approved our director compensation policy at the 2014
AGM
, including compensation payable to Mr. Fries pursuant to the terms of the
Fries Agreement
. The directors’ compensation policy is set out in Appendix A of the proxy statement for the 2014
AGM
, which is available at
www.sec.gov
or
www.libertyglobal.com
.
Summary of the
Fries Agreement
. The
Fries Agreement
became effective on April 30, 2014 and has an initial five-year term ending on April 30, 2019. After the initial term, the
Fries Agreement
automatically renews for successive one-year terms unless either party provides at least 180 days written notice to the other party of its intention not to renew the term. Notwithstanding the foregoing, the
Fries Agreement
and Mr. Fries’ employment may be terminated by either party at any time during the initial five-year term or a renewal term.
Mr. Fries’ 2014 base salary is $2.0 million per year, subject to annual increase at the discretion of the compensation committee. Mr. Fries received a cash bonus of $5.0 million within ten days of signing the
Fries Agreement
.
Upon signing the
Fries Agreement
and as provided therein, Mr. Fries received the CEO Performance Award. The CEO Performance Award was subject to the achievement of a performance condition measured in 2014 substantially similar to the performance condition established for the
2014 Annual Award Program
, except the performance period was for the nine-month period commencing on April 1, 2014. In December 2014, the compensation committee determined the performance condition had been met and the CEO Performance Award was converted to time-vested
RSU
s, which vest over a three-year service period. See
—Elements of Our Compensation Packages—Equity Incentive Awards—CEO Performance Award
above
.
The CEO Performance Award is intended to qualify as “performance-based compensation” under Section 162(m) of the
Code
.
Mr. Fries’ maximum annual cash performance award opportunity for 2014 of $8.0 million will increase by $500,000 each year, provided that no increase is required if the base performance objective applicable to Mr. Fries’ annual cash performance award is not achieved in the previous year. There is no guaranteed amount of the annual cash performance award. The actual amount paid to Mr. Fries will depend on the achievement of qualitative and quantitative performance objectives, which will be determined each year by the compensation committee.
During the term of the
Fries Agreement
, Mr. Fries will participate in our company’s equity compensation programs on the same basis as other executives of our company. Pursuant to these programs, Mr. Fries will be entitled to receive grants of annual equity awards (the
Annual Equity Awards
). The
Annual Equity Awards
granted to Mr. Fries may be in the form of
PSU
s,
SAR
s or other forms of equity as determined by the compensation committee, with the terms and conditions substantially the same as those for our other senior executive officers. The target value of these
Annual Equity Awards
is intended to be based on the target value for similar awards in
2014
as disclosed under
—Elements of Our Compensation Packages—Equity Incentive Awards
above and will be increased each year (beginning in 2016) by $2.5 million. The compensation committee may, however, determine the actual target value of
Annual Equity Awards
each year in its sole discretion and may reduce this amount subject to the terms of the
Fries Agreement
.
In addition to participating in
U.S.
employee benefit plans and arrangements sponsored by our company for the benefit of its senior executive group, Mr. Fries is entitled to use our company’s aircraft for up to 120 hours of personal use per year, in accordance with the terms of an aircraft time sharing agreement with our company. In addition, our company agreed to pay all reasonable legal fees and expenses incurred by Mr. Fries in connection with the negotiation and execution of the
Fries Agreement
.
If Mr. Fries’ employment is terminated as a result of his death or disability (as defined in the
Fries Agreement
), Mr. Fries or his heirs, as applicable, will be entitled to receive: (1) Mr. Fries’ accrued but unpaid base salary through the date of termination; (2) any annual cash performance award for a completed year that was earned but not paid as of the date of termination; (3) any accrued but unused vacation leave pay as of the date of termination; (4) any accrued vested benefits under our company’s employee welfare and tax-qualified retirement plans, in accordance with the terms of those plans; and (5) reimbursement of any business expenses (
Accrued Benefits
). In addition, (a) our company will pay Mr. Fries or his heirs, as applicable, an amount equal to a pro rata portion of the annual cash performance award Mr. Fries would have received for the calendar year of his termination (the
Pro-Rata Bonus
); (b) any options,
SAR
s or other nonperformance based awards will fully vest, with options and
SAR
s remaining exercisable until the earlier of three years from Mr. Fries’ termination or the original expiration of such award; (c) if Mr. Fries’ termination is during a performance period with respect to any
PSU
(or other performance based award)
58
that were granted as part of an Annual Equity Award, Mr. Fries will be entitled to a pro-rata amount of such awards based on performance through the end of the year of Mr. Fries’ termination and (d) Mr. Fries’ family may elect to continue to receive coverage under our company’s group health benefits plan subject to the terms of such plan or receive COBRA continuation of the group health benefits with premiums paid or reimbursed by our company.
If Mr. Fries is terminated for cause (as defined in the
Fries Agreement
) or resigns (other than for good reason (as defined in the
Fries Agreement
)), he will be entitled to receive the
Accrued Benefits
and Mr. Fries will not be entitled to any other amounts under the
Fries Agreement
.
If Mr. Fries’ employment is involuntarily terminated by our company without cause, or if Mr. Fries voluntarily terminates his employment for good reason, Mr. Fries will be entitled to receive: (1) the
Accrued Benefits
; (2) an amount equal to the
Pro-Rata Bonus
, subject to achievement of the applicable performance metric; (3) an amount equal to one-twelfth (1/12) of the average annual base salary Mr. Fries was earning in the calendar year of the termination and the immediately preceding calendar year, multiplied by the applicable number of months in the
Severance Period
(as defined below), which amount shall be paid in substantially equal payments over the course of the
Severance Period
in accordance with our company’s normal payroll practices during such period; and (4) an amount equal to one-twelfth (1/12) of the average annual cash performance award paid to Mr. Fries for the immediately preceding two years (regardless when paid), multiplied by the number of months in the
Severance Period
, which amount shall be paid in substantially equal payments over the course of the
Severance Period
in accordance with our company’s normal payroll practices during such period. In addition, any options,
SAR
s or other nonperformance based awards will fully vest, with options and
SAR
s remaining exercisable until the earlier of three years from Mr. Fries’ termination or the original expiration of such award, other nonperformance based awards and the CEO Performance Award (to the extent the performance conditions are satisfied) shall be accelerated and settled, and Mr. Fries and his family may elect to continue to receive coverage under our company’s group health benefits plan subject to the terms of such plan or receive COBRA continuation of the group health benefits previously provided to Mr. Fries and his family with premiums paid or reimbursed by our company. The
Severance Period
is a period of 24 months commencing on the termination of Mr. Fries’ employment.
If Mr. Fries’ employment is involuntarily terminated by our company without cause, or if Mr. Fries voluntarily terminates his employment for good reason, Mr. Fries shall continue to earn each of the outstanding
PSU
s or other performance based awards that were granted as part of an Annual Equity Award, if and to the extent the performance metrics are satisfied during the applicable performance period, based upon actual performance through the end of the applicable performance period, as certified by the compensation committee, as if Mr. Fries’ employment had not terminated. If the termination is prior to the grant date for all
Annual Equity Awards
that would have been granted during the initial term (or applicable renewal term) in which Mr. Fries’ termination took place, then our company shall pay to Mr. Fries additional amounts equal to the
Applicable Percentage
(as defined below) of the target value of the
Annual Equity Awards
that would have been made during such term, with lump sum cash payments being made in the first 90 days of the applicable grant years. The
Applicable Percentage
is the percentage of the Annual Equity Grant value that is made in the form of
PSU
s (or other full value equity awards) and shall not be less than 50%.
If Mr. Fries’ employment is involuntarily terminated by our company without cause or if Mr. Fries voluntarily terminates his employment for good reason and the termination is prior to the grant date for all
Annual Equity Awards
that would have been granted during the initial term (or applicable renewal term) in which Mr. Fries’ termination took place, then in respect of options,
SAR
s or other share-based appreciation awards (other than
PSU
s or other full value equity awards, the treatment of which under these circumstances is described above) that would have been granted (the
Ungranted Appreciation Awards
), our company will be obligated to pay to Mr. Fries, on each date such awards would have vested and based on certain assumptions included in the
Fries Agreement
(including, taking into account the Applicable Percentage as described above), a lump sum cash amount equal to (1) the number of shares underlying the
Ungranted Appreciation Awards
that would have vested on the applicable vesting date, multiplied by (2) the excess of the closing share price on the applicable assumed vesting date over the closing share price on the assumed grant date.
If Mr. Fries remains employed by our company (or our successor) for 12 months following a change in control (as defined in the
Fries Agreement
), or is involuntarily terminated by our company without cause or voluntarily terminates for good reason prior to such time, then the outstanding
PSU
s (for which the performance period has not expired) and the unvested
SAR
s will become fully vested as of the first anniversary of the change in control (or earlier date of termination or resignation), with outstanding
PSU
s deemed to be earned at the maximum level. If Mr. Fries’ employment is involuntarily terminated by our company without cause or if Mr. Fries voluntarily terminates his employment for good reason, either of which occurs within 13 months following a change in control, then Mr. Fries shall be treated as if his employment was terminated without cause or for good reason except that the
Severance Period
shall be the lesser of: (1) 36 months; or (2) the number of full calendar months
59
remaining until the expiration of the initial term (or applicable renewal term) of the
Fries Agreement
in which Mr. Fries’ termination took place; provided that in no event shall the
Severance Period
be less than 24 months.
Pursuant to the
Fries Agreement
, Mr. Fries is subject to customary restrictive covenants, including those relating to non-solicitation, noninterference, non-competition and confidentiality, during the term of the
Fries Agreement
and, depending on the circumstances of termination, for a period of up to two years thereafter.
Mr. Fries has agreed to waive any rights he would have under any agreement to a gross-up for any taxes associated with a parachute payment.
Charles H.R. Bracken.
On December 15, 2004, we entered into an Executive Service Agreement with Mr. Bracken in connection with his continued appointment as Co-Chief Financial Officer of
UGC
. In 2005, Mr. Bracken became our Co-Chief Financial Officer (principal financial officer). The Executive Service Agreement has an indefinite term and may be terminated by either party upon six months’ notice or by us at any time upon shorter notice. Mr. Bracken will be entitled to his salary and benefits for any unexpired portion of the six months’ notice period at the date his employment terminates. His equity awards will also continue to vest during such six-month notice period. Mr. Bracken’s employment may also be terminated immediately upon notice for cause. If we terminate Mr. Bracken’s employment other than for cause or disability, Mr. Bracken will also be entitled to a lump sum severance payment equivalent to his base salary and benefits for six months, subject to his signing a release. In the event Mr. Bracken becomes disabled and the disability continues for a specified period, we may reduce future payments under the Executive Service Agreement to the amount reimbursed by its disability insurer for the duration of Mr. Bracken’s disability or, under certain circumstances, terminate his employment as described above.
Mr. Bracken’s salary, which was £666,700 for
2014
, is subject to annual review and, in the discretion of our compensation committee, upward adjustment. The benefits to which he is entitled pursuant to the Executive Service Agreement include an auto allowance and participation in the Liberty Global Group Pension Plan for
U.K.
employees and group life insurance, permanent ill health insurance (equivalent to disability insurance) and medical and dental insurance schemes. In addition, the Executive Service Agreement provides for Mr. Bracken to be made whole for any non-
U.K.
tax liability he may incur with respect to his salary and other amounts due him and for any additional
U.K.
tax or social security cost he may incur with respect to business expenses or reimbursement paid by us for work performed by him outside the
U.K.
The Executive Service Agreement includes restrictions on Mr. Bracken’s (1) use or disclosure of trade secrets for so long as they are trade secrets, (2) use or disclosure of confidential or proprietary information during the term of his employment and for two years after termination of his employment and (3) competition with and solicitation of executives or certain employees of Liberty Global, or any subsidiary of Liberty Global or its parent entities, for a period of six months after termination of his employment.
Diederik Karsten.
Effective January 1, 2011,
LG BV
entered into an Employment Agreement with Mr. Karsten in connection with his appointment as Managing Director, European Broadband Operations of
LG BV
.
LG BV
and Mr. Karsten amended the Employment Agreement to reflect his new title, Executive Vice President, European Broadband Operations. The Employment Agreement has an indefinite term and may be terminated by
LG BV
upon six months’ notice or by Mr. Karsten upon three months’ notice. Mr. Karsten will be entitled to his salary and benefits for the duration of the notice period. In addition, Mr. Karsten’s equity awards will also continue to vest during the applicable notice period. Mr. Karsten’s employment may also be terminated immediately upon notice for cause. In the event Mr. Karsten becomes disabled and the disability continues over a year,
LG BV
may reduce future payments under the Employment Agreement to the amount reimbursed by its disability insurer for the duration of Mr. Karsten’s disability or, under certain circumstances, terminate his employment as described above.
Mr. Karsten’s salary under the Employment Agreement, which was €787,400 for
2014
, is subject to annual review and, in the discretion of our compensation committee, adjustment. The benefits to which he is entitled pursuant to the Employment Agreement include use of an automobile, participation in the Dutch Liberty Global Pension Plan for Netherlands employees, disability insurance, travel and accident insurance and medical insurance schemes. The Employment Agreement includes restrictions similar to those described for Mr. Bracken above.
Aircraft Policy
Our policy for the personal use of our aircraft by members of our board, our
CEO
and such other officers as may be approved by our
CEO
was originally adopted by our board in 2005 and amended in 2009. The policy allows non-employee directors to use our aircraft for personal flights, subject to availability, without charge. The policy requires each user who is an
60
officer to lease the corporate aircraft for personal use pursuant to an aircraft time sharing agreement and to pay us an amount equal to the aggregate incremental cost of each flight up to certain limits established under the
U.S.
Federal Aviation Administration rules. Incremental costs may include fuel, oil, lubricants and other additives, hangar and tie down costs away from aircraft home airport, travel expenses for crew, landing and parking fees, customs and immigration fees, insurance obtained for a specific flight, in-flight food and beverage services, ground transportation, de-icing fees and flight planning and weather contract services. With approval, family members or guests may join an executive or senior officer or director on a business flight without charge for these additional passengers. Also, on limited occasions, we have allowed a business-related flight to land at an airport other than its destination to drop off or pick up a passenger for personal convenience without requiring reimbursement of our incremental cost.
With respect to Mr. Fries, our compensation committee approved his personal use of our aircraft for a specified number of flight hours per year without charge as part of his compensation package, subject to annual review by the committee. During the negotiation of the
Fries Agreement
, our compensation committee agreed to allow 120 annual flight hours for Mr. Fries’ personal use of our aircraft. While in effect, this compensation arrangement will be in lieu of and not in addition to his rights under our aircraft policy. In February 2010, our compensation committee authorized personal use of our aircraft by our chairman Mr. Malone for up to 200 flight hours per year as part of his compensation for his services to us. Such authorization is subject to modification by our compensation committee from time to time and will terminate when Mr. Malone ceases to be a director.
For
U.S.
tax reporting purposes, when family members or guests of a director or executive or senior officer travel on business flights, the value of such personal use, determined using a method based on
SIFL
rates as published by the
IRS
, is imputed as income to such director or executive or senior officer. For tax reporting purposes in Europe, when family members or guests of an executive or senior officer travel on business flights, the value of such personal use, determined based on the cost of a commercial ticket, is imputed as income to such executive or senior officer. A director or executive or senior officer will also have imputed income based on
SIFL
rates (in the case of
U.S.
taxpayers) or the cost of the flight (in the case of European taxpayers) for a personal flight, less any amounts reimbursed to us. In accordance with applicable tax rules and regulations, such imputed income is included in taxable income for the applicable director or executive or senior officer.
Notwithstanding the policy, we and our flight crew retain the authority to determine when a flight may be cancelled or changed for safety or maintenance reasons.
Potential Payments upon Termination or Change in Control
The Termination of Employment Table and the Change in Control Table set forth below reflect the potential payments to our
NEO
s in connection with termination of their employment or a change in control as of
December 31, 2014
. The Termination of Employment Table assumes that a change in control has not occurred. The Change in Control Table assumes that a change in control has occurred. Certain of our plans and agreements provide benefits upon the occurrence of a change in control without regard to whether employment is terminated, whereas others have a “double trigger” requiring employment to be terminated for benefits to be realized. These are separately reflected in the Change in Control Table.
The amounts provided in the tables are based on the assumptions stated below. The actual amounts may be different at the time of termination due to various factors. In addition, we may enter into new arrangements or modify these arrangements from time to time.
|
•
|
The amounts in the tables for unvested
SAR
s that vest on an accelerated basis or continue to vest are based on the spread between the base price of the award and the applicable closing market price on
December 31, 2014
. Restricted shares or units and
PSU
s that would vest on an accelerated basis or continue to vest are valued using the applicable closing market price on
December 31, 2014
. On
December 31, 2014
, the closing market price for our Class A shares was
$50.21
per share, for our Class B shares was
$50.73
per share and for our Class C shares was
$48.31
per share.
|
|
•
|
The amounts for Messrs. Bracken and Karsten assume they receive a lump sum payment in cash of salary and benefits instead of six months’ notice of termination under their employment agreements. Also, to the extent compensation to these executive officers is paid in British pounds or euros, it has been converted to
U.S.
dollars based upon the average exchange rate in effect during
2014
.
|
|
•
|
Under the
2013 PSU
s, the effect of termination of employment or a change-in-control varies depending on whether it occurs during the performance period or during the service period. Because no termination of employment or change-in-control occurred on
December 31, 2014
, the last day of the performance period, the information in the tables assumes that the event triggering potential accelerated vesting of the
2013 PSU
s occurred during the service
|
61
period and the benefits were calculated based on the participant’s actual earned
2013 PSU
s, which were converted to time-vested
RSU
s.
|
•
|
Under the
Fries Agreement
, the effect of termination of employment upon a change-in-control varies depending on whether it occurs during the performance period or during the service period of a
PSU
. Because no change-in-control occurred on
December 31, 2014
, the last day of the performance period in the
2013 PSU
s, the information in the tables assumes that such event occurred during the service period of the
2013 PSU
s and the benefits were calculated based on Mr. Fries’ actual earned
2013 PSU
s, which were converted to time-vested
RSU
s.
|
|
•
|
The
2013 Challenge Awards
provide that if the compensation committee does not exercise its discretion to reduce a 2013 Challenge Award, the grantee is assumed to have met the minimum performance levels. The benefits under the
2013 Challenge Awards
were calculated on that basis.
|
|
•
|
Under the
Fries Agreement
, if a termination of employment occurs without cause or by Mr. Fries for good reason, he will also receive an amount equal to the
Applicable Percentage
and the value of the
Ungranted Appreciation Awards
. For purposes of the tables, these amounts are based on the following:
|
|
◦
|
beginning in 2016, the target annual grant value increases by $2.5 million each year from the
2014
target annual compensation for Mr. Fries;
|
|
◦
|
two-thirds of such target annual grant value are treated as
PSU
s; and
|
|
◦
|
one-third of such target annual grant value is treated as if the spread between the closing market prices of the underlying shares over the grant date value of the
Ungranted Appreciation Awards
over the vesting period equaled such amount.
|
As of
December 31, 2014
, each of our
NEO
s had, under the
2005 Incentive Plan
, unvested
SAR
s, unvested
2013 PSU
awards and unvested
2013 Challenge Awards
and under the
2014 Incentive Plan
, unvested
SAR
s and unvested
PSU
awards. Mr. Fries also had an unvested CEO Performance Award that had been earned and converted into time-vested
RSU
s under the
2014 Incentive Plan
. The termination provisions of the employment agreements of Messrs. Fries, Bracken and Karsten are described under
—Employment and Other Agreements
above. The
2005 Incentive Plan
is described, together with our other current equity incentive plans, under
Incentive Plans
below. The relevant provisions of the awards of
2014 PSU
s and the CEO Performance Award granted under the
2014 Incentive Plan
are described under —
Elements
of Our Compensation Packages
—
Equity Incentive Awards
—
2014 Equity Incentive Awards
and —
CEO Performance Award,
respectively,
above and the relevant provision of the awards of the
2013 PSU
s granted under the
2005 Incentive Plan
are described under —
Elements
of Our Compensation Packages
—
Equity Incentive Awards
—
Decisions for
2013 PSU
s
above. In addition to such descriptions, additional information on the termination and/or change-in-control provisions of these plans and agreements is provided below.
Termination of Employment
The availability of benefits under our plans or agreements varies with the reason employment terminates as described below. For periods commencing after the entry into the
Fries Agreement
in April 2014, the availability of benefits for Mr. Fries varies with the reason employment terminates as provided in the
Fries Agreement
. See —
Employment and Other Agreements
above.
Voluntary Termination
. The executive would retain his vested equity grants under the incentive plans, which must be exercised within the period following termination prescribed by the applicable plan. There would be no other payments or benefits.
Retirement
. No benefits are payable in the event of retirement; however, under the
2014 Incentive Plan
a person who retires with a combined age and years of service of 70 or greater will vest an additional year of unvested
SAR
s and
RSU
s granted under this plan from the date of termination. Mr. Fries and Mr. Dvorak would meet this requirement and such benefit is reflected in the “Retirement” column in the Termination of Employment Table below.
Termination for Cause
. The executive would not receive any payment or benefit and typically would forfeit all unexercised equity awards, whether or not vested; provided, however, Mr. Fries would still receive his annual cash performance award for a prior completed year not yet paid. The definition of “cause” varies among the plans and agreements, but generally includes
62
(1) insubordination, dishonesty, incompetence or other misconduct, (2) failure to perform duties and (3) a felony conviction for fraud, embezzlement or other illegal conduct. For purposes of such a termination within 12 months of a change-in-control event, in the case of the
2005 Incentive Plan
, the
2013 PSU
s or the
2013 Challenge Awards
, and in the case of the
2014 Incentive Plan
, the
2014 PSU
s, “cause” is defined to mean only a felony conviction for fraud, embezzlement or other illegal conduct. For purposes of such a termination within 13 months of a change-in-control event, in the case of the CEO Performance Award, “cause” is defined to mean only a felony conviction or other illegal conduct.
Termination Without Cause
. Certain of the employment agreements provide for benefits in the case of termination by our company not for cause. See —
Employment and Other Agreements
above. Under the
2005 Incentive Plan
and the
2014 Incentive Plan
, the employee would be entitled to accelerated vesting of a pro rata portion of that amount of each award that would have vested on the next vesting date, based on the number of full months of the current vesting period that employment continued prior to termination. For the benefits payable under the applicable employment agreement and the value of the prorated vesting of awards, if any, see the “By Company Without Cause” column in the Termination of Employment Table below.
Death
. In the event of death, the equity incentive plans provide for vesting in full of any outstanding options or
SAR
s and the lapse of restrictions on any restricted share or restricted share unit awards. In addition, under the
Fries Agreement
, the CEO Performance Award will vest in full. The
2013 PSU
s provide that, in the event of termination of employment due to death during the service period and prior to a change in control, the unvested portion of the grantee’s award will vest and the underlying ordinary shares will be issued as of the originally scheduled vesting dates. The
2014 PSU
s provide that, in the event of termination of employment due to death during the performance period and prior to a change in control, the prorated portion of the grantee’s target
2014 PSU
s, based on the portion of the performance period completed prior to the date of death, will vest and the underlying ordinary shares will be issued no later than March 15 of the calendar year immediately following the date of death. The
2013 Challenge Awards
provide that if termination of employment due to death occurs during the performance period, the unearned awards will vest in full and become immediately exercisable unless the compensation committee reduces the number of
2013 Challenge Awards
due to individual performance issues. The value of all these benefits is in the “Death/Disability” column in the Termination of Employment Table. No amounts are shown for payments pursuant to life insurance policies, which we make available to all our salaried employees.
Disability
. In the event of termination of employment due to disability, the equity incentive plans provide for vesting in full of any outstanding options or
SAR
s and the lapse of restrictions on any restricted share or restricted share unit awards. In addition, the
Fries Agreement
provides that the CEO Performance Award will vest in full. The
2013 PSU
s provide that if termination of employment due to disability occurs during the service period, the unvested portion of the grantee’s
2013 PSU
s will vest and the underlying ordinary shares will be issued as of the originally scheduled vesting dates. The
2014 PSU
s provide that, if termination of employment due to disability occurs after June 30, 2013 but prior to January 1, 2014, and prior to a change-in-control event, the prorated portion of the grantee’s
2014 PSU
s that would have been earned if the performance period had ended on
December 31, 2014
, will vest and the underlying ordinary shares will be issued no later than March 15, 2015. The
2013 Challenge Awards
provide that if termination of employment due to disability occurs during the performance period, the unearned awards will vest in full and become immediately exercisable unless the compensation committee reduces the number of
2013 Challenge Awards
due to individual performance issues. The value of all these benefits is in the “Death/Disability” column in the Termination of Employment Table. For this purpose, the amounts set forth in the table below assume that 100% of the target
2014 PSU
s would have been earned prorated as stated above and that 100% of the
2013 Challenge Awards
would have vested as stated above. No amounts are shown for payments pursuant to short-term and long-term disability policies, which we make available to all our employees. For purposes of the
2005 Incentive Plan
, the
2013 PSU
s, the
2013 Challenge Awards
, the
2014 Incentive Plan
, the
2014 PSU
s and the CEO Performance Award, “disability” means the inability to engage in any substantial gainful activity by reason of any medically determinable condition which has lasted or can be expected to last for a continuous period of at least 12 months or can be expected to result in death.
Resignation for Good Reason.
The
Fries Agreement
provides for benefits in the case of resignation by Mr. Fries for good reason. See —
Employment and Other Agreements
above. Otherwise, no payment or benefit is required upon resignation by an executive for good reason absent a change in control. The benefits payable under the
Fries Agreement
for good reason are the same as the benefits payable upon a termination by our company without cause. See the “By Company Without Cause” column in the Termination of Employment Table below.
63
Termination of Employment
|
Name
|
By Company
Without Cause |
Death/Disability
|
Retirement
|
||||||||||
|
Michael T. Fries
|
|||||||||||||
|
Options/SARs Accelerated
|
$
|
8,173,744
|
|
$
|
8,173,744
|
|
$
|
1,331,631
|
|
||||
|
2013 PSUs
|
6,489,966
|
|
6,489,966
|
|
(1)
|
—
|
|
||||||
|
2014 PSUs
|
11,493,265
|
|
5,746,633
|
|
—
|
|
|||||||
|
2013 Challenge Award
|
55,389,000
|
|
55,389,000
|
|
—
|
|
|||||||
|
CEO Performance Award
|
100,940,000
|
|
100,940,000
|
|
—
|
|
|||||||
|
Severance Payment
|
18,656,847
|
|
7,846,000
|
|
—
|
|
|||||||
|
Applicable Percentage (ungranted PSUs)
|
50,000,000
|
|
—
|
|
—
|
|
|||||||
|
Ungranted Appreciation Awards
|
25,000,000
|
|
—
|
|
—
|
|
|||||||
|
Benefits (2)
|
38,004
|
|
38,004
|
|
—
|
|
|||||||
|
Total
|
$
|
276,180,826
|
|
$
|
184,623,347
|
|
$
|
1,331,631
|
|
||||
|
Charles H.R. Bracken
|
|||||||||||||
|
Options/SARs Accelerated
|
$
|
239,863
|
|
$
|
4,626,977
|
|
$
|
—
|
|
||||
|
2013 PSUs
|
—
|
|
3,785,959
|
|
(1)
|
—
|
|
||||||
|
2014 PSUs
|
—
|
|
1,915,544
|
|
—
|
|
|||||||
|
2013 Challenge Award
|
—
|
|
9,730,500
|
|
—
|
|
|||||||
|
Salary
|
512,039
|
|
—
|
|
—
|
|
|||||||
|
Severance Payment
|
512,039
|
|
—
|
|
—
|
|
|||||||
|
Continued Vesting of Awards
|
1,199,301
|
|
—
|
|
—
|
|
|||||||
|
Benefits (3)
|
66,355
|
|
—
|
|
—
|
|
|||||||
|
Total
|
$
|
2,529,597
|
|
$
|
20,058,980
|
|
$
|
—
|
|
||||
|
Bernard G. Dvorak
|
|||||||||||||
|
Options/SARs Accelerated
|
$
|
239,863
|
|
$
|
4,626,977
|
|
$
|
443,840
|
|
||||
|
2013 PSUs
|
—
|
|
3,785,959
|
|
(1)
|
—
|
|
||||||
|
2014 PSUs
|
—
|
|
1,915,544
|
|
—
|
|
|||||||
|
2013 Challenge Award
|
—
|
|
9,730,500
|
|
—
|
|
|||||||
|
Total
|
$
|
239,863
|
|
$
|
20,058,980
|
|
$
|
443,840
|
|
||||
|
Diederik Karsten
|
|||||||||||||
|
Options/SARs Accelerated
|
$
|
239,863
|
|
$
|
4,626,977
|
|
—
|
|
|||||
|
2013 PSUs
|
—
|
|
3,785,959
|
|
(1)
|
—
|
|
||||||
|
2014 PSUs
|
—
|
|
1,915,544
|
|
—
|
|
|||||||
|
2013 Challenge Award
|
—
|
|
9,730,500
|
|
—
|
|
|||||||
|
Salary
|
487,849
|
|
—
|
|
—
|
|
|||||||
|
Continued Vesting of Awards
|
1,199,301
|
|
—
|
|
—
|
|
|||||||
|
Benefits (3)
|
124,319
|
|
—
|
|
—
|
|
|||||||
|
Total
|
$
|
2,051,332
|
|
$
|
20,058,980
|
|
$
|
—
|
|
||||
|
Balan Nair
|
|||||||||||||
|
Options/SARs Accelerated
|
$
|
239,863
|
|
$
|
4,626,977
|
|
$
|
—
|
|
||||
|
2013 PSUs
|
—
|
|
3,785,959
|
|
(1)
|
—
|
|
||||||
|
2014 PSUs
|
—
|
|
1,915,544
|
|
—
|
|
|||||||
|
2013 Challenge Award
|
—
|
|
9,730,500
|
|
—
|
|
|||||||
|
Total
|
$
|
239,863
|
|
$
|
20,058,980
|
|
$
|
—
|
|
||||
___________________
|
(1)
|
Although the earned
2013 PSU
s are deemed vested, they are not payable until the originally scheduled vesting dates under the grant agreements, as amended.
|
|
(2)
|
For Mr. Fries, represents the estimated cost to maintain health benefits for him and/or his dependents during the 18 month period following his termination.
|
|
(3)
|
For Mr. Bracken and Mr. Karsten, represents the estimated cost to maintain their employee benefits during their six-month notice period.
|
64
Change in Control
The
2005 Incentive Plan
, the
2013 PSU
s, the
2013 Challenge Awards
,
2014 Incentive Plan
, the
2014 PSU
s and the CEO Performance Award each provide for various benefits either upon the occurrence of specified change-in-control events or upon termination of employment following a change-in-control event.
Change-in-Control Events.
The change-in-control events vary under the relevant plans but generally fall into three categories:
|
1.
|
A person or entity, subject to specified exceptions, acquires beneficial ownership of at least
20%
of the combined voting power of our outstanding securities ordinarily having the right to vote in the election of directors in a transaction that has not been approved by our board of directors. We refer to this change-in-control event as an “Unapproved Control Purchase”.
|
|
2.
|
During any two-year period, persons comprising the board of directors at the beginning of the period cease to be a majority of the board, unless the new directors were nominated or appointed by two-thirds of the continuing original directors. We refer to this change-in-control event as a “Board Change”.
|
|
3.
|
Our board of directors approves certain transactions such as (a) a merger, consolidation or binding share exchange that results in the shareholders of our company prior to the transaction owning less than a majority of the combined voting power of our capital stock after the transaction or in which our ordinary shares are converted into cash, securities or other property, subject to certain exceptions, (b) a plan of liquidation of our company, or (c) a sale of substantially all the assets of our company. We refer to this change-in-control event as a “Reorganization”.
|
Under the
2005 Incentive Plan
and the
2014 Incentive Plan
, outstanding equity awards will vest in full upon the occurrence of an Unapproved Control Purchase or Board Change and immediately prior to consummation of a Reorganization, unless, in the case of a Reorganization only, the compensation committee determines that effective provision has been made for the award to be assumed or replaced with an equivalent award.
The
2013 PSU
s and the
2014 PSU
s provide that if any of these change-in-control events occurs during the service period or performance period, respectively, and the grant agreements are not continued on the same terms and conditions, in the case of a Board Change or Unapproved Control Purchase, or not continued or assumed on equivalent terms, in the case of a Reorganization, then each grantee will be deemed to be vested in his or her earned
2013 PSU
s and to have earned his or her target
2014 PSU
s, which will vest, and in each case, the underlying ordinary shares will be issued within 30 days of such change- in-control event. If the grant agreements are continued or assumed, then each grantee will (1) continue to have his or her rights in his or her earned
2013 PSU
s in accordance with the grant agreement and (2) be deemed to have earned his or her target
2014 PSU
s, which will be converted to time-vested
RSU
s subject to service and vesting requirements in accordance with the grant agreement. Accelerated vesting would only be triggered on a subsequent termination of employment.
The
2013 Challenge Awards
provide that if any of these change-in-control events occurs during the service period or performance period, respectively, and the grant agreements are not continued on the same terms and conditions, in the case of a Board Change or Unapproved Control Purchase, or not continued or assumed on equivalent terms, in the case of a Reorganization, then each grantee will be deemed to be vested in his or her
2013 Challenge Awards
unless the compensation committee reduces the number of
2013 Challenge Awards
prior to the change-in-control event, and the vested
2013 Challenge Awards
will be immediately exercisable. If the grant agreements are continued or assumed, then each grantee will continue to have his or her rights in his or her
2013 Challenge Awards
, subject to service and vesting requirements in accordance with the grant agreement. Accelerated vesting would only be triggered on a subsequent termination of employment.
Upon a change-in-control event, the
Fries Agreement
provides that upon the first anniversary of a change-in-control event, where employment is continued, any outstanding options, or
SAR
s or other non-performance awards will vest in full and any outstanding
PSU
s will vest in full, provided that any
PSU
s for which the performance period has not expired will be deemed earned at the maximum level.
Termination After Change in Control.
Under the
2005 Incentive Plan
and the
2014 Incentive Plan
, if a termination of employment occurs without cause or the employee resigns for good reason within 12 months of a Reorganization, then any outstanding
SAR
and
RSU
awards will vest and become fully exercisable as of the date of termination of employment. The
2013 PSU
s, the
2014 PSU
s, the
2013 Challenge Awards
and the CEO Performance Award provide that, if a change-in-control event occurs that does not result in accelerated vesting of such awards, a subsequent termination of employment will accelerate
65
vesting of the earned
2013 PSU
s, earned CEO Performance Award, target
2014 PSU
s and
2013 Challenge Awards
(subject to downward adjustment by the compensation committee) if the termination is due to death or disability or is without cause or the participant resigns for good reason. The ordinary shares underlying the vested
2013 PSU
s and the
2014 PSU
s will be issued no later than March 15 of the calendar year immediately following the calendar year in which the termination occurred. The
2013 Challenge Awards
will be exercisable in accordance with their terms, similar to time-vested
SAR
awards. Pursuant to the
Fries Agreement
, if a termination of employment occurs without cause or Mr. Fries resigns for good reason within 13 months of a change-in-control event then Mr. Fries will receive the benefits described above under —
Employment and Other Agreements
.
For purposes of each of the plans, “good reason” for a participant to resign following a change-in-control event requires that one of the following has occurred without the consent of the participant: (1) a material diminution in the participant’s base compensation; (2) a material diminution of his official position or authority; or (3) a required relocation of his principal business office to a different country. In addition, the
Fries Agreement
defines good reason to also include a reduction in his target equity value for annual awards or in the amount of annual cash performance awards he is eligible to earn, failure to re-nominate or re-elect Mr. Fries to serve on our board or removal from our board, ceasing to be a member of the executive committee, non-renewal of the
Fries Agreement
and a material breach of the
Fries Agreement
. Following a change-in-control event, good reason under the
Fries Agreement
also includes failure to increase Mr. Fries’ total target direct compensation such that it equals or exceeds the 75th percentile of chief executive officers at peer companies of the successor entity. For all
NEO
s, additional procedural requirements apply for a resignation to qualify as being for “good reason”.
The “Employment Terminated” columns assume that the executive’s employment is terminated as of
December 31, 2014
, without cause and include the incremental benefits that would result from such a termination under the employment agreements and equity incentive plans as described under —
Potential Payments upon Termination or Change in Control
—
Termination of Employment
above.
280G Tax Gross-Up.
Under the grant agreements for the
2013 PSU
s and the
2014 PSU
s, when a benefit is triggered due to a change-in-control event that would be subject to an excise tax pursuant to Section 280G of the
Code
, we have agreed to make a payment to the plan participants, including our
NEO
s, for all excise taxes incurred under Section 280G and related income and excise taxes that are payable by such participants as a result of any reimbursement for such Section 280G excise taxes. Notwithstanding the foregoing, in the case of the
2013 PSU
s and the
2014 PSU
s, if the excise tax can be avoided through a reduction in the amount of “parachute payments” (as defined in Section 280G) required to be provided to the grantee with respect to the
2013 PSU
s and the
2014 PSU
s, not to exceed
20%
of such amount, then the amount of “parachute payments” shall automatically be reduced to the minimum extent necessary to avoid the excise tax.
For purposes of the change-in-control events in the table below, no one exceeded the threshold that would have entitled him to a 280G tax gross-up payment. Also, Messrs. Bracken and Karsten are not subject to the excise tax under 280G as they are not
U.S.
taxpayers. In addition, Mr. Fries has agreed in the
Fries Agreement
to waive any rights he would have under any such agreements to any 280G tax gross-up payment from us.
66
Change In Control
|
Unapproved Control
Purchase /Board Change – Plan Benefits Continued |
Reorganization–Plan
Benefits Continued |
Change in Control – Plan
Benefits Not Continued |
|||||||||||||||
|
Name
|
Employment
Terminated |
Employment
Continues |
Employment
Terminated |
Employment
Continues |
|||||||||||||
|
Michael T. Fries
|
|||||||||||||||||
|
Options/SARs Accelerated
|
$
|
8,173,744
|
|
$
|
8,173,744
|
|
$
|
8,173,744
|
|
$
|
8,173,744
|
|
|||||
|
2013 PSUs
|
6,489,966
|
|
—
|
|
(1)
|
6,489,966
|
|
6,489,966
|
|
||||||||
|
2014 PSUs
|
17,239,898
|
|
—
|
|
(2)
|
17,239,898
|
|
17,239,898
|
|
||||||||
|
2013 Challenge Awards
|
55,389,000
|
|
—
|
|
55,389,000
|
|
55,389,000
|
|
|||||||||
|
CEO Performance Award
|
100,940,000
|
|
100,940,000
|
|
100,940,000
|
|
100,940,000
|
|
|||||||||
|
Severance Payment
|
24,062,271
|
|
—
|
|
24,062,271
|
|
—
|
|
|||||||||
|
Applicable Percentage (ungranted PSUs)
|
50,000,000
|
|
—
|
|
50,000,000
|
|
50,000,000
|
|
|||||||||
|
Ungranted Appreciation Awards
|
25,000,000
|
|
—
|
|
25,000,000
|
|
25,000,000
|
|
|||||||||
|
Benefits (3)
|
38,004
|
|
—
|
|
38,004
|
|
—
|
|
|||||||||
|
Total
|
$
|
287,332,883
|
|
$
|
109,113,744
|
|
$
|
287,332,883
|
|
$
|
263,232,608
|
|
|||||
|
Charles H.R. Bracken
|
|||||||||||||||||
|
Options/SARs Accelerated
|
$
|
239,863
|
|
$
|
239,863
|
|
$
|
239,863
|
|
$
|
239,863
|
|
|||||
|
2013 PSUs
|
3,785,959
|
|
—
|
|
(1)
|
3,785,959
|
|
3,785,959
|
|
||||||||
|
2014 PSUs
|
3,831,088
|
|
—
|
|
(2)
|
3,831,088
|
|
3,831,088
|
|
||||||||
|
2013 Challenge Awards
|
9,730,500
|
|
—
|
|
9,730,500
|
|
9,730,500
|
|
|||||||||
|
Salary
|
512,039
|
|
—
|
|
512,039
|
|
—
|
|
|||||||||
|
Severance Payment
|
512,039
|
|
—
|
|
512,039
|
|
—
|
|
|||||||||
|
Benefits (4)
|
66,355
|
|
—
|
|
66,355
|
|
—
|
|
|||||||||
|
Total
|
$
|
18,677,843
|
|
$
|
239,863
|
|
$
|
18,677,843
|
|
$
|
17,587,410
|
|
|||||
|
Bernard G. Dvorak
|
|||||||||||||||||
|
Options/SARs Accelerated
|
$
|
239,863
|
|
$
|
239,863
|
|
$
|
239,863
|
|
$
|
239,863
|
|
|||||
|
2013 PSUs
|
3,785,959
|
|
—
|
|
(1)
|
3,785,959
|
|
3,785,959
|
|
||||||||
|
2014 PSUs
|
3,831,088
|
|
—
|
|
(2)
|
3,831,088
|
|
3,831,088
|
|
||||||||
|
2013 Challenge Awards
|
9,730,500
|
|
—
|
|
9,730,500
|
|
9,730,500
|
|
|||||||||
|
Total
|
$
|
17,587,410
|
|
$
|
239,863
|
|
$
|
17,587,410
|
|
$
|
17,587,410
|
|
|||||
|
Diederik Karsten
|
|||||||||||||||||
|
Options/SARs Accelerated
|
$
|
239,863
|
|
$
|
239,863
|
|
$
|
239,863
|
|
$
|
239,863
|
|
|||||
|
2013 PSUs
|
3,785,959
|
|
—
|
|
(1)
|
3,785,959
|
|
3,785,959
|
|
||||||||
|
2014 PSUs
|
3,831,088
|
|
—
|
|
(2)
|
3,831,088
|
|
3,831,088
|
|
||||||||
|
2013 Challenge Awards
|
9,730,500
|
|
—
|
|
9,730,500
|
|
9,730,500
|
|
|||||||||
|
Salary
|
487,849
|
|
—
|
|
487,849
|
|
—
|
|
|||||||||
|
Benefits (4)
|
124,319
|
|
—
|
|
124,319
|
|
—
|
|
|||||||||
|
Total
|
$
|
18,199,578
|
|
$
|
239,863
|
|
$
|
18,199,578
|
|
$
|
17,587,410
|
|
|||||
|
Balan Nair
|
|||||||||||||||||
|
Options/SARs Accelerated
|
$
|
239,863
|
|
$
|
239,863
|
|
$
|
239,863
|
|
$
|
239,863
|
|
|||||
|
2013 PSUs
|
3,785,959
|
|
—
|
|
(1)
|
3,785,959
|
|
3,785,959
|
|
||||||||
|
2014 PSUs
|
3,831,088
|
|
—
|
|
(2)
|
3,831,088
|
|
3,831,088
|
|
||||||||
|
2013 Challenge Awards
|
9,730,500
|
|
—
|
|
9,730,500
|
|
9,730,500
|
|
|||||||||
|
Total
|
$
|
17,587,410
|
|
$
|
239,863
|
|
$
|
17,587,410
|
|
$
|
17,587,410
|
|
|||||
___________________
|
(1)
|
Although the earned
2013 PSU
s are deemed to be vested, they are not payable until the vesting dates under the grant agreements.
|
|
(2)
|
Although the target
2014 PSU
s are deemed to be earned, they remain subject to the service and vesting requirements of the grant agreements.
|
|
(3)
|
For Mr. Fries, represents the estimated cost to maintain health benefits for him and/or his dependents during the 18 month period following his termination.
|
67
|
(4)
|
For Messrs. Bracken and Karsten, represents the estimated cost to maintain their employee benefits during their six-month notice period.
|
Director Compensation
Set forth below is a description of the compensation for our nonemployee (or non-executive) directors. Such compensation is subject to review annually by our nominating and corporate governance committee and as provided in the directors compensation policy approved by our shareholders at the 2014
AGM
. In connection with our company redomiciling to the
U.K.
, the board adopted the following compensation effective June 7, 2013. Such compensation is substantially similar to the compensation paid by our predecessor
LGI
to its non-executive directors. Our directors are also entitled to the benefit of our policy on personal usage of our aircraft set forth above under
—Aircraft Policy
.
Fees and Expenses
Each member of our board, who is not an employee of
Liberty Global
(other than our chairman Mr. Malone), receives an annual retainer of
$100,000
. In addition, each such member receives
$1,500
for each in-person meeting attended (in person or by conference telephone) and
$750
for each telephonic meeting attended of the board or any committee of the board on which he or she serves. Each director who serves as the chair of the audit committee, the compensation committee or the nominating and corporate governance committee receives a fee for such service of
$25,000
,
$25,000
and
$10,000
, respectively, for each full year of service in such position. All annual director fees, including fees for chairpersons, are payable in arrears in four equal quarterly installments. Our directors may elect to have their quarterly fee installments paid in Class A and Class C shares instead of in cash. Such election for fees payable for a specific calendar quarter must be made not later than the last day of the immediately preceding calendar quarter. The number of shares issued is based on the fair market value on the last trading day of the quarter for which the election is made. Any fractional share is paid in cash. Directors who are employees of
Liberty Global
, or its subsidiaries, do not receive any additional compensation for their service as directors. Currently, our
CEO
Mr. Fries is our only executive director.
Generally, the in-person board meetings are held at one of our corporate offices and each year at least one in-person meeting is held at the location of one of our operations. In addition, members of our board have periodic strategy retreats with certain members of senior management to review our strategies and goals. We reimburse our non-executive directors for travel, lodging and other reasonable expenses related to their service on our board, including the travel costs of a companion for one of our directors who is visually impaired. We also occasionally make our aircraft available to directors for attendance at meetings or other company-related events.
For the board meeting held at the location of one of our operations or other company-related events, we may provide extra activities for members of our board. We may also invite the spouse or a guest of each director to attend events associated with board meetings or other company-related events. We generally provide for, or reimburse expenses of, the spouse’s or guest’s travel, food and lodging for attendance at these events and participation in related activities. If the spouse or guest travels on our aircraft for an event, the incremental cost for such personal passenger is determined based on our average direct variable cost per passenger for aircraft fuel and in-flight food and beverage services, plus, when applicable, customs and immigration fees specifically incurred. To the extent costs for these activities, including the incremental cost for traveling on our aircraft, and costs for any other personal benefits, for a director exceeds
$10,000
for the year, they are included in the amounts in the table below.
From time to time, we provide our directors information on conferences and seminars that may be of interest to them as a director of
Liberty Global
. For directors who elect to attend these events, we cover the costs as part of our policy to keep members of our board informed on issues that relate to their duties as a director. In addition, we make available to members of our board, at their election, health insurance under our health insurance policies.
Equity Awards
As of the date of each annual general meeting of shareholders, each continuing non-executive director receives an equity award under the 2005 Liberty Global Inc. Nonemployee Director Incentive Plan (the
2005 Director Plan
) until March
2014
and thereafter under the
2014
Liberty Global Nonemployee Director Incentive Plan (the
2014 Director Plan
). On the date of such meeting, each non-executive director will receive equity grants with a combined grant date fair value of
$187,500
awarded, at his or her election, either as (1) a grant of options for Class A shares and a grant of options for Class C shares, or (2) a grant
68
of options for Class A shares and a grant of options for Class C shares for one-half the value and a grant of Class A
RSU
s and a grant of Class C
RSU
s for the remaining value. Such election must be made at least two business days prior to the applicable shareholders meeting. If no election is made, the director will receive the award of options. The option grants have a term of seven years and vest as to one-third of the option shares on the date of the first annual general meeting of shareholders after the date of grant and as to an additional one-third of the option shares each on the date of the following two annual general meetings of shareholders thereafter, provided that the director continues to serve as a director immediately prior to the applicable vesting date. For purposes of determining the number of
RSU
s of a class to be granted, the grant date fair value of the options for the same class is determined using the same valuation methodology as we use to determine the value of option grants in accordance with
FASB ASC 718
on the date of the applicable annual shareholders meeting. The awards of
RSU
s vest in full on the date of the first annual shareholders meeting after the date of grant.
A non-executive director will receive a grant of options for Class A shares and a grant of options for Class C shares with a combined grant date fair value equal to
$187,500
upon the date he or she is first elected or appointed to our board of directors. The grant date fair value of the options awarded is determined using the same valuation methodology as we use to determine the value of option grants in accordance with
FASB ASC 718
on the date of election or appointment. The option grants have a term of seven years and vest as to one-third of the option shares on the later to occur of (1) the six month anniversary date of the date of grant or (2) the date of the first annual shareholders meeting after the date of grant. Thereafter the remaining option shares vest as to an additional one-third of the option shares on the date of each annual shareholders meeting, provided that the director continues to serve as a director immediately prior to the applicable vesting date. From March 3, 2014, all awards to our non-executive directors are granted under our
2014 Director Plan
.
Although Mr. Malone is a non-executive director, he currently serves without cash compensation other than the reimbursement of certain expenses as described below. As chairman of our board, any compensation paid to him is subject to review and approval of our compensation committee. Prior to our company redomiciling to the
U.K.
, the board of
Liberty Global
delegated to the compensation committee the authority to approve annual awards of options to Mr. Malone under the
2005 Director Plan
(the
2014 Director Plan
after March 2014) with a combined grant date fair value equivalent to
$1.0 million
for so long as he continues to serve as chairman of the board and a non-executive director. The terms of the option awards are equivalent to those for our other non-executive directors, except that the annual vesting over three years occurs on each anniversary of the grant date rather than on the date of the annual general meeting of shareholders. Any such awards will be subject to review and approval by the compensation committee in connection with its annual equity grant approval process. On May 1, 2014, the compensation committee, with the approval of our independent directors, approved a grant to Mr. Malone for his services as chairman of the
Liberty Global
board and a non-executive director of options to purchase Class A shares and Class C shares, with an aggregate grant date fair value of
$1.0 million
. It is anticipated that these provisions will apply to future annual grants to Mr. Malone as chairman of our board.
At a meeting of our independent directors in December 2013, they authorized the payment or reimbursement of personal expenses incurred by Mr. Malone of up to $300,000 per year related to his ownership of our shares and his service as our chairman. These expenses include professional fees and other expenses incurred by Mr. Malone for estate or tax planning, regulatory filings and other services.
Deferred Compensation Plan
At its December 2009 meeting, the
LGI
board of directors adopted the Liberty Global Nonemployee Director Deferred Compensation Plan, as amended (the
Director Deferred Compensation Plan
), which has since been assumed by
Liberty Global
. Under the Director Deferred Compensation Plan, beginning with deferral elections for
2014
and after, non-executive directors may elect to defer payment of up to
85%
of their annual retainer, whether payable in cash or equity, and their annual equity awards to the extent payable in restricted shares or
RSU
s. For deferral elections for 2013 and before, non-executive directors could elect to defer all or a portion of such compensation. The Director Deferred Compensation Plan became effective beginning with compensation payable in 2010.
Annual retainers payable in cash and deferred under the Director Deferred Compensation Plan will be credited with interest at the rate of
9%
per year, compounded quarterly at the end of each calendar quarter for amounts deferred before January 1, 2013 and compounded daily for amounts deferred thereafter (the credited interest fund). Our board reserved the right to change the interest rate in the future, provided that any decreases in the rate will apply only to deferred elections that become irrevocable after the new rate is set. Annual retainers payable in shares and annual equity awards payable in restricted shares or
RSU
s that are deferred will not be credited with interest, but will be adjusted for splits, combinations, dividends or distributions (the stock
69
fund). The deferred annual retainers and deferred equity awards may be distributed in a lump sum or in a series of up to 10 equal annual installments upon a distribution event. A distribution event is when (1) the director ceases to be a member of our board or dies, or (2) at the election of our board, within 12 months of certain change-in-control events, or (3) beginning with compensation deferred in 2012, a specific date is selected by the director at the time he or she makes his deferral election.
The Director Deferred Compensation Plan provides our board with the discretion to terminate the Director Deferred Compensation Plan at any time. Such an optional termination will not result in accelerated distributions.
2014
Compensation of Liberty Global Directors
The following table sets forth information concerning the compensation of our nonemployee directors for fiscal year
2014
.
|
Name (1)
|
Fees Earned or Paid in Cash ($)
|
Stock Awards ($)(2)(3)
|
Option Awards
($)(2)(3)
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4)
|
All Other Compensation ($)
|
Total ($)
|
|||||||||||||||
|
John C. Malone
|
—
|
|
(5)
|
|
|
|
|
—
|
|
475,806
|
|
(6)
|
1,476,692
|
|
(5)
|
||||||
|
Class A
|
—
|
|
—
|
|
343,826
|
|
|||||||||||||||
|
Class C
|
—
|
|
—
|
|
657,060
|
|
|||||||||||||||
|
Andrew J. Cole
|
51,028
|
|
|
|
|
|
—
|
|
127
|
|
(8)
|
302,815
|
|
||||||||
|
Class A
|
27,366
|
|
(7)
|
—
|
|
64,128
|
|
||||||||||||||
|
Class C
|
36,606
|
|
(7)
|
—
|
|
123,560
|
|
||||||||||||||
|
John P. Cole, Jr.
|
21,098
|
|
|
|
|
|
—
|
|
99
|
|
(8)
|
308,787
|
|
||||||||
|
Class A
|
42,511
|
|
(7)
|
—
|
|
64,128
|
|
||||||||||||||
|
Class C
|
57,391
|
|
(7)
|
—
|
|
123,560
|
|
||||||||||||||
|
Miranda Curtis
|
121,750
|
|
|
|
|
|
—
|
|
201
|
|
(9)
|
309,639
|
|
||||||||
|
Class A
|
—
|
|
—
|
|
64,128
|
|
|||||||||||||||
|
Class C
|
—
|
|
—
|
|
123,560
|
|
|||||||||||||||
|
John W. Dick
|
23,348
|
|
|
|
|
|
—
|
|
33,073
|
|
(10)
|
344,011
|
|
||||||||
|
Class A
|
42,511
|
|
(7)
|
—
|
|
64,128
|
|
||||||||||||||
|
Class C
|
57,391
|
|
(7)
|
—
|
|
123,560
|
|
||||||||||||||
|
Paul A. Gould
|
24,076
|
|
(11)
|
|
|
|
|
11,587
|
|
189
|
|
(8)
|
348,464
|
|
(11) (12)
|
||||||
|
Class A
|
53,143
|
|
(7)
|
—
|
|
64,128
|
|
||||||||||||||
|
Class C
|
71,781
|
|
(7)
|
—
|
|
123,560
|
|
||||||||||||||
|
Richard R. Green
|
14,348
|
|
|
|
|
|
14
|
|
84
|
|
(8)
|
302,036
|
|
||||||||
|
Class A
|
42,511
|
|
(7)
|
—
|
|
64,128
|
|
||||||||||||||
|
Class C
|
57,391
|
|
(7)
|
—
|
|
123,560
|
|
||||||||||||||
|
David E. Rapley
|
125,750
|
|
(13)
|
|
|
|
|
23,952
|
|
1,164
|
|
(14)
|
338,490
|
|
(13)
|
||||||
|
Class A
|
—
|
|
32,038
|
|
32,064
|
|
|||||||||||||||
|
Class C
|
—
|
|
61,736
|
|
61,786
|
|
|||||||||||||||
|
Larry E. Romrell
|
121,750
|
|
|
|
|
|
—
|
|
22,389
|
|
(15)
|
331,827
|
|
||||||||
|
Class A
|
—
|
|
—
|
|
64,128
|
|
|||||||||||||||
|
Class C
|
—
|
|
—
|
|
123,560
|
|
|||||||||||||||
|
JC Sparkman
|
147,500
|
|
|
|
|
|
—
|
|
126
|
|
(8)
|
335,250
|
|
||||||||
|
Class A
|
—
|
|
32,038
|
|
32,064
|
|
|||||||||||||||
|
Class C
|
—
|
|
61,736
|
|
61,786
|
|
|||||||||||||||
|
J. David Wargo
|
23,348
|
|
(16)
|
|
|
|
|
7,393
|
|
11,883
|
|
(17)
|
330,214
|
|
(16) (18)
|
||||||
|
Class A
|
42,511
|
|
(7)
|
—
|
|
64,128
|
|
||||||||||||||
|
Class C
|
57,391
|
|
(7)
|
—
|
|
123,560
|
|
||||||||||||||
___________________
|
(1)
|
Mr. Fries, our
CEO
and president, is not included in this table because he is a named executive officer of
Liberty Global
and does not receive any additional compensation as an executive director. For information on Mr. Fries’ compensation, please see
—Summary Compensation
above.
|
|
(2)
|
The dollar amounts in the table reflect the grant date fair value of the option awards and the fair value of share awards related to Class A shares and Class C shares at the time of grant in accordance with
FASB ASC 718
.
|
70
|
(3)
|
At
December 31, 2014
, the directors had the following awards outstanding:
|
|
Name
|
Class
|
Options (#)
|
Restricted Shares (#)(a)
|
|||||
|
J. Malone
|
Class A
|
121,461
|
|
—
|
|
|||
|
Class C
|
344,352
|
|
—
|
|
||||
|
A. Cole
|
Class A
|
26,346
|
|
—
|
|
|||
|
Class C
|
65,953
|
|
—
|
|
||||
|
J. Cole
|
Class A
|
59,151
|
|
—
|
|
|||
|
Class C
|
172,944
|
|
—
|
|
||||
|
M. Curtis
|
Class A
|
15,557
|
|
—
|
|
|||
|
Class C
|
42,158
|
|
—
|
|
||||
|
J. Dick
|
Class A
|
65,557
|
|
—
|
|
|||
|
Class C
|
142,158
|
|
—
|
|
||||
|
P. Gould
|
Class A
|
54,151
|
|
—
|
|
|||
|
Class C
|
157,944
|
|
—
|
|
||||
|
R. Green
|
Class A
|
35,557
|
|
—
|
|
|||
|
Class C
|
102,158
|
|
—
|
|
||||
|
D. Rapley
|
Class A
|
14,294
|
|
736
|
|
|||
|
Class C
|
41,095
|
|
1,472
|
|
||||
|
L. Romrell
|
Class A
|
12,882
|
|
—
|
|
|||
|
Class C
|
34,109
|
|
—
|
|
||||
|
JC Sparkman
|
Class A
|
36,430
|
|
736
|
|
|||
|
Class C
|
107,503
|
|
1,472
|
|
||||
|
D. Wargo
|
Class A
|
64,151
|
|
—
|
|
|||
|
Class C
|
187,944
|
|
—
|
|
||||
___________________
(a) Represents shares to be issued upon vesting of restricted share units.
|
(4)
|
The dollar amounts shown in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column reflect the above-market value of accrued interest, which is the portion of the accrued interest equal to the amount that exceeds
120%
of the applicable federal long-term rate (with compounding) at the time the rate was set, on compensation previously deferred by such director under our Director Deferred Compensation Plan.
|
|
(5)
|
Mr. Malone serves without cash compensation. On May 1, 2014, our compensation committee granted Mr. Malone option awards for his services as chairman of the board and a non-executive director, which options vest in three equal annual installments, commencing May 1, 2015.
|
|
(6)
|
Includes our aggregate incremental cost attributable to the director’s spouse accompanying him on a business trip to and from Brussels, Belgium for the July
2014
board meeting with personal stops ($22,488), plus the cost for ground transportation, food and tours for his spouse while in Brussels for the meeting. Also includes our aggregate incremental cost of $26,362 attributable to the personal use of our aircraft, reimbursement for personal expenses related to the ownership of our shares and his service as our chairman (
$300,000
), the cost of a Hart Scott Rodino filing fee ($125,000) and gifts from us valued at approximately $330, plus the related tax gross-up in the amount of $139.
|
|
(7)
|
This is the dollar amount of fees paid in our Class A shares and Class C shares at the election of the director.
|
|
(8)
|
Represents the amount paid as a tax gross-up on gifts from us valued at less than $300.
|
|
(9)
|
Represents the amount paid as a tax gross-up on gifts from us valued at less than $500.
|
|
(10)
|
Includes our aggregate incremental cost attributable to the personal use of our aircraft ($28,661). Also includes the cost of ground transportation, food and tours for his companion while in Brussels, Belgium for the July
2014
board meeting, health insurance premiums for the benefit of such director and his companion, and gifts from us valued at approximately $220, plus the related tax gross-up in the amount of $94.
|
71
|
(11)
|
Amount includes $77 of Mr. Gould’s fees, the payment of which Mr. Gould elected to defer pursuant to the Director Deferred Compensation Plan. Such deferred amount accrues interest at the rate of
9%
per annum compounded daily until paid in full to him.
|
|
(12)
|
Such amount includes the value of
1,205
Class A shares and
1,666
Class C shares, the issuance of which Mr. Gould elected to defer pursuant to the Director Deferred Compensation Plan.
|
|
(13)
|
Amount includes $110,000 of Mr. Rapley’s fees, the payment of which Mr. Rapley elected to defer pursuant to the Director Deferred Compensation Plan. Such deferred amount accrues interest at the rate of
9%
per annum compounded daily until paid in full to him.
|
|
(14)
|
Includes a tax gross-up in the amount of $164 on gifts from us valued at less than $500 and a contribution to a charitable organization made by Liberty Global at the request of Mr. Rapley.
|
|
(15)
|
Includes our cost for a commercial airline ticket for the director’s spouse’s flight to Brussels, Belgium ($8,115) for the July
2014
board meeting. Also includes the cost for ground transportation, food and tours for his spouse while in Brussels, Belgium for the meeting and gifts from us valued at approximately $400, plus the related tax gross-up in the amount of $168. Also includes our aggregate incremental cost of $12,185 attributable to the personal use of our aircraft.
|
|
(16)
|
Amount includes $98 of Mr. Wargo’s fees, the payment of which such director elected to defer pursuant to the Director Deferred Compensation Plan. Such deferred amount accrues interest at the rate of
9%
per annum compounded daily until paid in full to him.
|
|
(17)
|
Includes our cost for a commercial airline ticket for the director’s spouse’s flight to and from Brussels, Belgium ($9,753) for the July
2014
board meeting, plus the cost of ground transportation, food and tours for his spouse while in Brussels, Belgium for the board meeting. In addition, it includes gifts from us valued at approximately $325, plus the related tax gross-up in the amount of $208.
|
|
(18)
|
Such amount includes the value of
964
Class A shares and
1,332
Class C shares, the issuance of which Mr. Wargo elected to defer pursuant to the Director Deferred Compensation Plan
|
72
RESOLUTION 5
|
5.
|
To approve, on an advisory basis, the annual report on the implementation of the directors’ compensation policy for the year ended
December 31, 2014
, contained in Appendix A of this proxy statement (in accordance with requirements applicable to
U.K.
companies).
|
In accordance with the regulations promulgated under the
Companies Act
, we are providing our shareholders the opportunity to approve, on an advisory basis, the compensation paid to our directors for the year ended
December 31, 2014
. The annual report on the implementation of the directors’ compensation policy is set forth in Appendix A to this proxy statement beginning on page A-3. In accordance with the
Companies Act
, the implementation of the directors’ compensation policy has been approved by and signed on behalf of our board and will be delivered to the Registrar of Companies in the
U.K.
following the
AGM
.
We are asking our shareholders to indicate their support for the compensation packages we provided in
2014
as described in Appendix A under
Annual Compensation Report
. This vote is not intended to address any specific item of the report but rather the overall compensation packages for our directors.
This vote is advisory and therefore is not binding on
Liberty Global
or our board of directors. The outcome of this advisory vote will not overrule any portion of the compensation packages made available to our directors in
2014
and will not create or imply any additional fiduciary duties or change to the fiduciary duties of our board. However, we value the opinion of our shareholders and our board will consider the outcome of the vote when making future compensation packages available to directors, including our executive director.
Vote and Recommendation
The affirmative vote of a simple majority of the votes cast by the holders of our Class A shares and our Class B shares (voting together as a single class) is required to approve resolution 5.
Our board of directors unanimously recommends a vote “
FOR
” the approval of resolution 5.
73
RESOLUTIONS 6, 7 AND 8
|
6.
|
To ratify the appointment of KPMG LLP (U.S.) as
Liberty Global
’s independent auditor for the year ending
December 31, 2015
.
|
|
7.
|
To appoint KPMG LLP (U.K.) as
Liberty Global
’s
U.K.
statutory auditor under the U.K. Companies Act 2006 (to hold office until the conclusion of the next annual general meeting at which accounts are laid before
Liberty Global
).
|
|
8.
|
To authorize the audit committee of
Liberty Global
’s board of directors to determine the
U.K.
statutory auditor’s compensation.
|
As provided in its charter, the audit committee selects our independent auditor, approves in advance all auditing and permissible non-auditing services to be performed by our independent auditor and reviews the scope of our annual audit. The audit committee has evaluated the performance of KPMG LLP (U.S.) and has selected it as our independent auditor for the fiscal year ending
December 31, 2015
. In addition to our independent auditor, as a
U.K.
company, we are also required to have a
U.K.
statutory auditor. Our board has selected KPMG LLP (U.K.), the
U.K.
affiliate of KPMG LLP (U.S.), to serve as our statutory auditors under the
Companies Act
. We are asking our shareholders to ratify the selection of KPMG LLP (U.S.) as our independent auditor and to appoint KMPG LLP (U.K.) as our
U.K.
statutory auditor.
Even if the selection of KPMG LLP (U.S.) is ratified, the audit committee of our board in its discretion may direct the appointment of a different
U.S.
independent accounting firm at any time during the year if our audit committee determines to make such a change. In the event our shareholders fail to ratify the selection of KPMG LLP (U.S.), our audit committee will consider whether to select other auditors for the year ending
December 31, 2015
.
In accordance with the
Companies Act
, our audit committee will approve, on an annual basis, the fees paid to our
U.K.
statutory auditors after authorization by our shareholders. Therefore, we are asking our shareholders to authorize our audit committee to determine the fee to be paid KPMG LLP (U.K.) as our
U.K.
statutory auditors in accordance with the audit committee’s procedures and applicable law.
Representatives of KPMG LLP (U.S.) and KMPG LLP (U.K.) are expected to be present at the
AGM
, will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Vote and Recommendation
The affirmative vote of a simple majority of the votes cast by the holders of our Class A shares and our Class B shares (voting together as a single class) is required to approve resolution 6 to ratify the selection of KPMG LLP (U.S.) as our independent auditors for the year ending
December 31, 2015
, to approve resolution 7 to appoint KPMG LLP (U.K.) as our
U.K.
statutory auditors under the
Companies Act
and to approve resolution 8 to authorize the audit committee to determine our
U.K.
statutory auditor’s fee.
Our board of directors recommends a vote “
FOR
” each of resolutions 6, 7 and 8.
Audit Fees and All Other Fees
The following table presents fees for professional audit services rendered by KPMG LLP and its international affiliates (including KPMG LLP (U.K.)) during the indicated periods for the audit of our consolidated financial statements and the separate financial statements of certain of our subsidiaries and for other services rendered by KPMG LLP and its international affiliates.
74
Fees billed in currencies other than
U.S.
dollars were translated into
U.S.
dollars at the average exchange rate in effect during the applicable year.
|
Year ended December 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
in thousands
|
||||||||
|
Audit fees (1)
|
$
|
17,458
|
|
$
|
16,535
|
|
||
|
Audit related fees (2)
|
378
|
|
351
|
|
||||
|
Audit and audit related fees
|
17,836
|
|
16,886
|
|
||||
|
Tax fees (3)
|
35
|
|
236
|
|
||||
|
All other services (4)
|
497
|
|
190
|
|
||||
|
Total fees
|
$
|
18,368
|
|
$
|
17,312
|
|
||
___________________
|
(1)
|
Audit fees include fees for the audit and quarterly reviews of our
2014
and
2013
consolidated financial statements, audit of internal controls over financial reporting, statutory audits, audits required by covenants and fees billed in the respective periods for professional consultations with respect to accounting issues, offering memoranda, registration statement filings and issuance of consents, attest services required by statute or regulation and similar matters.
|
|
(2)
|
Audit related fees include fees billed in the respective periods, primarily related to accounting consultation services associated with the application of International Financial Reporting Standards in
2014
and
2013
and the application of the new revenue recognition standard in 2014.
|
|
(3)
|
Tax fees include fees billed in the respective periods for tax compliance and consultations regarding the tax implications of certain transactions.
|
|
(4)
|
All other services include fees billed in 2014 for network security services and enterprise risk observations and recommendations and fees billed in 2013 for observations and recommendations related to our operations in Chile and Hungary.
|
Our audit committee has considered whether the provision of services by KPMG LLP to our company other than auditing is compatible with KPMG LLP maintaining its independence and does not believe that the provision of such services is incompatible with KPMG LLP maintaining its independence. Our audit committee approved the provision of all the services described in the table above.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor
Effective June 15, 2005, as amended and restated, our audit committee adopted a policy regarding the pre-approval of all audit and certain permissible audit-related and non-audit services provided by our independent auditor. Pursuant to this policy, our audit committee has pre-approved the engagement of our independent auditor to provide:
|
•
|
audit services as specified in the policy, including (a) financial statement audits for us required by statute or regulatory authority, excluding the audit of our annual financial statements, (b) financial statement audits of our subsidiaries required by statute or regulatory authority, (c) services associated with registration statements, periodic reports and other documents filed with the
SEC
, such as consents, comfort letters and responses to comment letters, (d) attestations required by statute or regulatory authority and (e) consultations with management as to the accounting or disclosure treatment of transactions or events and the actual or potential impact of final or proposed rules of applicable regulatory and standard setting bodies (when such consultations are considered “audit services” under the
SEC
rules promulgated pursuant to the
Exchange Act
);
|
|
•
|
audit-related services as specified in the policy, including (a) due diligence services relating to potential business acquisitions and dispositions, (b) financial statement audits of employee benefit plans, (c) consultations with management with respect to the accounting or disclosure treatment of transactions or events and the actual or potential impact of final or proposed rules of applicable regulatory and standard setting bodies (when such consultations are considered “audit-related services” and not “audit services” under the
SEC
rules promulgated pursuant to the
Exchange Act
), (d) attestation services not required by statute or regulation, (e) closing balance sheet audits pertaining to dispositions, (f) assistance with implementation of the requirements of
SEC
, International Accounting Standards Board or Public Company Accounting Oversight Board rules or listing standards promulgated pursuant to the
Sarbanes-
|
75
Oxley Act
, (g) services associated with offering memoranda and other documents filed with or required by applicable regulators, such as consents, comfort letters and responses to comment letters, (h) internal control reviews and assistance with internal control reporting requirements and (i) financial statement audits of our subsidiaries and affiliates not required by statute or regulatory authority but required by contract or other internal reasons;
|
•
|
tax services as specified in the policy, including (a) planning, advice and compliance services in connection with the preparation and filing of
U.S.
federal, state, local or international taxes, (b) review or preparation of
U.S.
federal, state, local and international income, franchise and other tax returns, (c) assistance with tax audits and appeals before the
IRS
or similar local and foreign agencies, (d) tax advice regarding statutory, regulatory or administrative developments, (e) expatriate tax assistance and compliance, (f) mergers and acquisitions tax due diligence assistance and (g) tax advice and assistance regarding structuring of mergers and acquisitions; and
|
|
•
|
non-audit services as specified in the policy, currently limited to assistance with environmental and sustainability reporting (all of the foregoing, being referred to as Pre-Approved Services).
|
Notwithstanding the foregoing general pre-approval, any individual project involving the provision of Pre-Approved Services that is expected to result in fees in excess of
$75,000
requires the specific approval of our audit committee. In addition, any engagement of our independent auditors for services other than the Pre-Approved Services requires the specific approval of our audit committee. Our audit committee has delegated the authority for the foregoing approvals to its chairman, provided that the fees for any individual project for which such approval is requested are not, in the reasonable judgment of the chairman, likely to exceed
$200,000
. At each audit committee meeting, the chairman’s approval of services provided by our independent auditors is subject to disclosure to the entire audit committee. Our pre-approval policy prohibits the engagement of our independent auditor to provide any services that are subject to the prohibition imposed by Section 201 of the
Sarbanes-Oxley Act
.
Audit Committee Report
The audit committee reviews
Liberty Global
’s financial reporting process on behalf of its board of directors. Management has primary responsibility for establishing and maintaining adequate internal controls, for preparing financial statements and for the public reporting process.
Liberty Global
’s independent auditor, KPMG LLP, is responsible for expressing opinions on the conformity of
Liberty Global
’s audited consolidated financial statements with accounting principles generally accepted in the
U.S.
(
GAAP
) and on the effectiveness of
Liberty Global
’s internal control over financial reporting.
The audit committee has reviewed and discussed with management and KPMG LLP,
Liberty Global
’s most recent audited consolidated financial statements, as well as management’s assessment of the effectiveness of
Liberty Global
’s internal control over financial reporting and KPMG LLP’s evaluation of the effectiveness of
Liberty Global
’s internal control over financial reporting. The audit committee has also discussed with KPMG LLP the matters required to be discussed by the Statement on Auditing Standards No. 16, as amended (Communications With Audit Committees), as adopted by the Public Company Accounting Oversight Board, including the auditors’ judgment about the quality of
Liberty Global
’s accounting principles, as applied in its financial reporting.
The audit committee has received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board that relate to the auditors’ communications with the audit committee concerning independence from
Liberty Global
and its subsidiaries, and has discussed with
Liberty Global
’s independent auditors their independence.
Based on the reviews and discussions referred to above, the audit committee recommended to
Liberty Global
’s board of directors that the audited financial statements be included in
Liberty Global
’s Annual Report on Form 10-K for the year ended
December 31, 2014
, which was filed with the
SEC
on February 13, 2015.
Submitted by the Members of the Audit Committee:
Miranda Curtis
John W. Dick
Paul A. Gould (chairman)
J. David Wargo
76
INCENTIVE PLANS
In January
2014
, our shareholders approved the
2014 Incentive Plan
and the
2014 Director Plan
(collectively, the
2014 Plans
). Generally, we may grant non-qualified share options,
SAR
s, restricted shares,
RSU
s, cash awards, performance awards or any combination of the foregoing under either of these incentive plans. Ordinary shares issuable pursuant to awards made under the
2014 Plans
will be made available from either authorized but unissued shares or shares that have been issued but reacquired by our company. Awards may be granted at or above fair value in any class of our ordinary shares. The maximum number of Liberty Global shares with respect to which awards may be issued under the
2014 Incentive Plan
and the
2014 Director Plan
is 100 million (of which no more than 50 million shares may consist of Class B ordinary shares) and 10 million, respectively, in each case, subject to anti-dilution and other adjustment provisions in the respective plan. As of
December 31, 2014
, the
2014 Incentive Plan
and the
2014 Director Plan
had
89,582,279
and
9,745,984
ordinary shares available for grant, respectively. No further awards will be granted under the
2005 Incentive Plan
, the
2005 Director Plan
or the
Virgin Media 2010 Incentive Plan
.
Awards under the
2005 Incentive Plan
and the
2005 Director Plan
issued prior to June 2005 are fully vested and expire
10
years after the grant date. In connection with the
Virgin Media Acquisition
, we assumed the
Virgin Media 2010 Incentive Plan
. Awards under the
Virgin Media 2010 Incentive Plan
issued prior to June 7, 2013 have a 10-year term and become fully exercisable within five years of continued employment. Certain performance-based awards that were granted during the first quarter of 2013 were canceled upon completion of the
Virgin Media Acquisition
. These canceled awards were subsequently replaced by
PSU
s that were granted under the
Virgin Media 2010 Incentive Plan
on June 24, 2013. For the remaining performance-based awards that were outstanding prior to June 7, 2013, the performance objectives lapsed upon the completion of the
Virgin Media Acquisition
and such awards vest on the third anniversary of the grant date.
Awards (other than performance-based awards) under the
2014 Incentive Plan
, the
2005 Incentive Plan
and the
Virgin Media 2010 Incentive Plan
issued after
June 7, 2013
generally (1) vest
12.5%
on the six month anniversary of the grant date and then vest at a rate of
6.25%
each quarter thereafter and (2) expire
seven
years after the grant date. Awards (other than
RSU
s) issued after
June 2005
and before June 2013 under the
2005 Director Plan
generally vest in
three
equal annual installments, provided the director continues to serve as director immediately prior to the vesting date, and expire
10
years after the grant date. Awards (other than restricted shares and
RSU
s) issued in June 2013 under the
2005 Director Plan
and in June 2014 under the
2014 Director Plan
have the same terms as the prior awards, except they expire seven years after the grant date. Restricted shares and
RSU
s vest on the date of the first annual general meeting of shareholders following the grant date. These awards may be granted at or above fair value in any class of ordinary shares, except for shares acquired under a sharesave plan available to
Virgin Media
employees. On February 24, 2015, our shareholders approved amendments to the
2014 Incentive Plan
to permit the grant to employees of our subsidiary Virgin Media of options to acquire our Class C shares at a discount to the market value of such shares.
Although the
2014 Plans
do not prohibit our compensation committee or board of directors, without prior shareholder approval, from repricing outstanding options or
SAR
s, it is our policy that, except for anti-dilution adjustments provided by the
2014 Plans
in connection with corporate transactions, the exercise or base price of ordinary shares for any outstanding option or
SAR
granted under the
2014 Plans
will not be decreased after the date of grant nor will an outstanding option or
SAR
granted under the
2014 Plans
be surrendered to our company as consideration for the grant of a new option or
SAR
with a lower exercise or base price, cash or a new award unless there is prior approval by our shareholders. Any other action that is deemed to be a repricing under any applicable rule of
NASDAQ
shall be prohibited unless there is prior approval by our shareholders.
CERTAIN TRANSACTIONS
Under our corporate governance guidelines, if a director has an actual or potential conflict of interest, the director must promptly inform our
CEO
and the chair of our audit committee or the chair of our nominating and corporate governance committee if the chair of the audit committee is the conflicted director. All directors must recuse themselves from any discussion or decision that involves or affects their personal, business or professional interests. Also, under our corporate governance guidelines, an independent committee of our board will resolve any conflict of interest issue involving a director, our
CEO
or any other executive officer. No related party transaction (as defined by Item 404(a) of Regulation S-K promulgated by the
SEC
) may be effected without the approval of such independent committee. When the potential conflict or transaction involves an executive officer, the audit committee is the independent committee charged by our corporate governance guidelines with this duty. When the potential conflict or transaction involves a director, a committee of the disinterested independent directors is the independent committee charged by our corporate governance guidelines with this duty.
77
Certain Relationships
Charitable Foundation
In
2014
, we and certain of our other subsidiaries contributed an aggregate of
£1,147,945
(
$1,889,812
) based on the
2014
average exchange rate) of cash to the Lessons for Life Foundation UK, an independent educational charity organized in accordance with the non-profit laws of England. Included in such cash contribution was
£159,188
(
$262,065
) based on the
2014
average exchange rate) in matching contributions based on the Lessons for Life Foundation UK’s fund raising efforts. We also contributed in-kind services, directly or indirectly, to the Lessons for Life Foundation UK, the Lessons for Life Foundation Ireland and the Lessons for Life Foundation US for an aggregate value of
£95,619
(
$157,413
based on the
2014
average exchange rate). Each of the Lessons for Life Foundations is an independent charity organized in accordance with the non-profit laws of their respective countries. The focus of the Lessons for Life Foundations is to provide scholarships for AIDS orphans in Africa. Mr. Bracken, an
NEO
, and five other employees of our company are trustees of the Lessons for Life Foundation UK. Mr. Fries, our chief executive officer and president, and Ms. Blair, our senior vice president and chief human resources officer, are trustees of the Lessons for Life Foundation US. The trustees do not receive any compensation for their involvement with any of the Foundations. As part of our charitable giving program, we are supportive of the goals and objectives of the Lessons for Life Foundations.
Other
Amy M. Blair is also the spouse of our named executive officer Bernard G. Dvorak. Ms. Blair and Mr. Dvorak were each officers of our company prior to their marriage. As an officer, Ms. Blair receives an annual salary and is a participant in all programs available to members of our senior management team, including the potential for an annual cash performance award, performance-based and other equity incentive awards and benefits. As with all members of our senior management team, Ms. Blair’s salary, cash performance awards and equity incentive awards are reviewed and approved by our compensation committee. Ms. Blair’s salary and cash performance award for
2014
was approximately
$1,480,800
(including amounts Ms. Blair elected to defer under the Deferred Compensation Plan). Each year, pursuant to her equity-related compensation, she may vest in equity and receive grants of new equity awards, subject to the review and approval of our compensation committee.
78
SHAREHOLDER RESOLUTIONS
We currently expect that our annual general meeting of shareholders for the calendar year
2016
will be held during the second quarter of
2016
in London, England. Shareholders, who, in accordance with Rule 14a-8 under the
Exchange Act
, wish to present a resolution for inclusion in the proxy materials for the
2016
annual general meeting, must submit their resolution in writing to our Corporate Secretary and the resolution must be received at our executive offices at 38 Hans Crescent, London SW1X 0LZ, United Kingdom, by the close of business on January 7,
2016
. In accordance with our articles of association, shareholders who wish to nominate a candidate as a director or bring a resolution not pursuant to Rule 14a-8 before the
2016
annual general meeting must submit their written notice of the matter to our executive offices at the foregoing address on or following February 26,
2016
, and before the close of business on March 28,
2016
, or such later date as may be determined and announced in connection with the actual scheduling of the annual general meeting.
All shareholder resolutions for inclusion in our proxy materials will be subject to the requirements of the proxy rules adopted under the
Exchange Act
and, as with any shareholder resolution (regardless of whether it is included in our proxy materials), our articles of association and the laws of England and Wales.
SHAREHOLDER RIGHTS
Shareholders should note that, on a request made by shareholders of Liberty Global under Section 527 of the
Companies Act
, we may be required to publish on a website a statement setting out any matter relating to: (1) the audit of our accounts (including the auditors’ report and the conduct of the audit) that are to be laid before the
AGM
for the financial year ending
December 31, 2014
; or (2) any circumstance connected with an auditor of Liberty Global ceasing to hold office since the previous meeting at which annual accounts and reports were laid. We cannot require the shareholders requesting any such website publication to pay our expenses in complying with Sections 527 or 528 (requirements as to website availability) of the
Companies Act
. Where we are required to place a statement on a website under Section 527 of the
Companies Act
, we must forward the statement to our auditor not later than the time when we make the statement available on the website. The business which may be dealt with at the AGM for the relevant financial year includes any statement that we have been required under Section 527 of the
Companies Act
to publish on a website.
ADOPTION OF NEW FINANCIAL REPORTING STANDARDS
We prepare our consolidated financial statements included in the
U.K.
Report and Accounts in accordance with
GAAP
, as permitted by the
U.K.
Companies Act 2006 (
Companies Act
) to the extent that those principles do not contravene with any provisions of the
Companies Act
. For more information about the preparation of our consolidated financial statements included in the
U.K. Report and Accounts
see note 1 to our consolidated financial statements included in the
U.K. Report and Accounts
. Beginning with our 2015
U.K.
statutory annual report, we will prepare our consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union beginning with the consolidated financial statements as of and for the year ended December 31, 2015 in order to maintain compliance with the
Companies Act
.
On January 1, 2015 a new
U.K.
financial reporting regime became mandatory for U.K. companies and the financial reporting standard known as the FRS 101
Reduced Disclosure Framework
was introduced. This permits qualifying entities that otherwise apply the recognition, measurement and disclosure requirements of EU-adopted International Financial Reporting Standards to adopt a reduced level of disclosure for their financial statements. The board of directors considers that it is in the best interest of the Company for us to adopt FRS 101
Reduced Disclosure Framework
in our stand-alone financial statements for financial years beginning on and after January 1, 2015. Before a company can apply the reduced disclosure framework it is required to inform its shareholders of such application. A shareholder or shareholders holding in aggregate 5% or more of the total allotted shares in
Liberty Global
may serve objections to the use of the disclosure exemptions on
Liberty Global
, in writing, to its registered office (38 Hans Crescent, London SW1X 0LZ, United Kingdom) not later than August 31, 2015.
79
APPENDIX A
DIRECTORS’ REMUNERATION REPORT
In this
Directors’ Remuneration Report
, the terms “we”, “our”, “our company” and “us” or similar references may refer as the context requires, to
Liberty Global
or its predecessor
LGI
. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the proxy statement. Similar to the proxy statement, unless otherwise indicated, all
Liberty Global
shares and per share amounts presented in this
Directors’ Remuneration Report
have been adjusted to give effect to the
Dividend
(as described in the proxy statement).
Annual Statement of the Chairman of the Compensation Committee
As a
NASDAQ
-listed company, we prepared our proxy statement for the
AGM
in accordance with the disclosure requirements of the
SEC
rules and regulations. Pursuant to these rules and regulations, you will find our compensation discussion and analysis report (the
CD&A
) in the proxy statement. The
CD&A
gives our overall philosophy regarding compensation of our executive officers. In addition to the
SEC
requirements, as a
U.K.
public limited company, we are also subject to the
Companies Act
and the regulations promulgated thereunder. Under the
U.K.
regulations we are required to have a
Directors’ Remuneration Report
approved by our shareholders. The
Directors’ Remuneration Report
consists of a directors’ compensation policy and an annual compensation report on the implementation of the directors’ compensation policy. Pursuant to these regulations, our annual compensation report on the implementation of the directors’ compensation policy for the year
2014
, follows this Annual Statement.
At the 2014
AGM
, on June 26, 2014, our shareholders approved the directors’ compensation policy, which included the compensation payable to our executive director under an employment agreement dated April 30, 2014 (the
Fries Agreement
). The directors’ compensation policy will be in effect until a new policy is submitted for approval at the annual general meeting to be held in 2017, unless an earlier amendment by shareholders is required. To simplify our
Directors’ Remuneration Report
, we have elected to not repeat our directors’ compensation policy in this Report, which is available in Appendix A of our 2014 proxy statement on Schedule 14A filed with the
SEC
at
www.sec.gov
and on our website at
www.libertyglobal.com
.
The directors’ compensation policy applies to our CEO, who is also an executive director and referred to in the
Directors’ Remuneration Report
as an “executive director”, and our nonemployee directors, including our chairman, who are referred to in the
Directors’ Remuneration Report
as “non-executive directors”. Many aspects of the directors’ compensation policy are set forth in the
CD&A
and the
—Directors Compensation
section of the proxy statement for the
AGM
. The
CD&A
is incorporated by reference into this
Directors’ Remuneration Report
and should be read in conjunction with the annual compensation report.
In
2014
, with respect to the compensation for our executive director, the compensation committee approved the
Fries Agreement
. Upon signing the
Fries Agreement
and as provided therein, our executive director received:
|
•
|
a commitment bonus of $5.0 million;
|
|
•
|
a grant of restricted share units of 1.0 million Class A shares and 1.0 million Class B shares (the CEO Performance Award).
|
For a summary of the
Fries Agreement
, see
Employment and Other Agreements
in the proxy statement.
The compensation committee determined that it was in the best interest of our company to enter into the
Fries Agreement
in order to promote stability in management, secure his services for the long term, implement appropriate restrictive covenants and recognize his outstanding performance and our company’s success under his leadership. Mr. Fries was not previously subject to an employment agreement with us. Recently, our executive director led our company in the completion of the
Virgin Media Acquisition
and subsequent integration, the
Ziggo
acquisition, the increase of our next generation subscriber base, the execution of key agreements for mobile services and many other strategic and operational matters. These matters are described under
Elements of Our Compensation Packages—Annual Cash Performance Awards—2014 Performance
in the
CD&A
. In addition, our company met its two key financial metrics of budgeted revenue growth and
OFCF
for payment of any portion of the annual bonus. In recognition of this performance, the compensation committee recommended to the board an annual bonus award for our executive director of 96.8% of his target annual bonus award. Using substantially the same performance criteria, our executive director also earned the CEO Performance Award, subject to continued employment to the vesting dates. With respect to our multi-year incentive awards of
PSU
s granted in March 2013 (the
2013 PSU
s), the compensation committee determined that our company met or exceeded the objectives set by the compensation committee for the two-year performance period ended
December 31, 2014
. Our company achieved
OCF
growth (as adjusted in accordance with the
2013 PSU
grant agreements) of 106.8% of the performance target over the two-year period, resulting in our executive director earning 113.6% of his 2013 target PSUs, subject to continued employment to the vesting dates. Further information on these awards and the changes in our compensation program described above are set out in the annual compensation report and under
Elements of Our Compensation Packages—Equity Incentive Awards
of the
CD&A
.
A-1
The
Directors’ Remuneration Report
demonstrates how much our executive director is earning and how his compensation is linked substantially to the performance of our company and in turn growth in shareholder value. Our total shareholder return graph, which shows a six-year return of over 300% with respect to our Class A shares, is included in the
Directors’ Remuneration Report
under
Annual Compensation Report—Past Performance—Total Shareholder Return Graph
below.
JC Sparkman
Chairman of the Compensation Committee
A-2
Consideration of Shareholder Views
At the 2014
AGM
, held on June 26, 2014, our shareholders representing at least a majority of our shares entitled to vote and present at such meeting approved our directors’ compensation policy (as required under the
Companies Act
), which included the compensation payable to our executive director pursuant to the terms of the
Fries Agreement
, and, on an advisory basis, the compensation of our
NEO
s (as determined pursuant to applicable
SEC
regulations), as disclosed in the proxy statement for our 2014
AGM
. As a result, the compensation committee will maintain the overall compensation program for our executive director with certain modifications as described in the
CD&A
and for our non-executive directors.
The voting results on these matters were as follows:
The directors’ compensation policy was approved by a binding vote of a majority of the votes cast:
|
For
|
Against
|
||||
|
Total Votes Cast
|
203,849,669
|
70,874,020
|
|||
|
% of Votes Cast
|
74.20%
|
25.80%
|
|||
The annual compensation report for the fiscal year
2014
was approved on an advisory basis by a vote of a majority of the votes cast:
|
For
|
Against
|
||||
|
Total Votes Cast
|
177,600,166
|
105,507,146
|
|||
|
% of Votes Cast
|
62.73%
|
37.27%
|
|||
The compensation of our
NEO
s, including the
CD&A
, was approved on an advisory basis by a vote of a majority of the votes cast:
|
For
|
Against
|
||||
|
Total Votes Cast
|
167,760,857
|
105,602,214
|
|||
|
% of Votes Cast
|
61.37%
|
38.63%
|
|||
The following Annual Compensation Report explains how we implemented the directors’ compensation policy in
2014
.
Annual Compensation Report
The members of our compensation committee are John P. Cole, Jr.,
Larry E. Romrell
and JC Sparkman (chairman). The chairman of our compensation committee reports to our board of directors on annual compensation decisions and on the administration of existing programs and development of new programs. The members of our compensation committee are “independent directors” (as defined under the
NASDAQ
Stock Market rules), “non-employee directors” (as defined in Rule 16b-3 under the
Exchange Act
) and “outside directors” (as defined in Section 162(m) of the
Code
).
The compensation committee is responsible for identifying our primary goals with respect to executive compensation, implementing compensation programs designed to achieve those goals, subject to appropriate safeguards to avoid unnecessary risk taking, and monitoring performance against those goals and associated risks. The responsibilities of the compensation committee are more fully described in its charter, which is available on our website at
www.libertyglobal.com
. In making its compensation decisions, the compensation committee ultimately relies on the general business and industry knowledge and experience of its members and the compensation committee’s own evaluation of our company and the performance of our executive officers. From time to time, however, the compensation committee will retain a compensation consultant to assist it in evaluating proposed changes in compensation programs or levels of compensation and to provide comparative data.
In
2014
, in connection with the preparation and negotiation of the
Fries Agreement
, the compensation committee retained
Deloitte
.
Deloitte
has served as the compensation committee’s independent advisor since 2010. We paid
$44,025
, based on hourly rates, to
Deloitte
for its services in
2014
to the compensation committee.
Deloitte
is one of several member firms of
DTTL
. Each member firm of
DTTL
, including
Deloitte
, is a legally separate and independent entity. Our operations use a number of other
DTTL
member firms for non-compensation related services. All of the non-compensation related services provided by these other member firms of
DTTL
were
A-3
performed at the direction of management without oversight or approval by our board or compensation committee, as these services were rendered in the ordinary course of business and were not material in scope or nature. Our compensation committee was aware that other
DTTL
member firms performed non-compensation related services to us at the time it engaged
Deloitte
. Because of the structure of
DTTL
, the compensation committee considers the advice received from
Deloitte
to be objective and independent. For further information regarding the role of
Deloitte
as the compensation committee’s consultant, see the
CD&A
under
—Overview of Compensation Process
in the proxy statement.
All compensation decisions with respect to our executive director and the chairman of our board are made by our compensation committee. Decisions with respect to our executive director’s compensation are made in private sessions of the compensation committee without the presence of management. With the assistance of our Human Resources and Legal Departments, our executive director is involved in formulating the terms of proposed performance or incentive award programs for consideration by the compensation committee, evaluating alternatives and recommending revisions. Other senior officers, within the scope of their job responsibilities, participate in gathering and presenting to the compensation committee, for its consideration, data and legal, tax and accounting analyses relevant to compensation and benefit decisions.
The compensation committee’s approach to equity incentive awards for our executive director places a significant emphasis on performance-based equity awards. Since 2010, the compensation committee’s approach has been to set a target annual equity value for each executive officer, of which approximately two-thirds would be delivered in the form of an annual award of
PSU
s, which if earned convert to time-vested
RSU
s, and approximately one-third in the form of an annual award of time-vested
SAR
s. In
2014
, the compensation committee followed this approach. It also approved the CEO Performance Award as described in the
CD&A
under
—Elements of Our Compensation Packages—Equity Incentive Awards.
Below is the annual compensation report on our directors’ compensation for the year-ended
December 31, 2014
. Pursuant to the requirements of the
Companies Act
, portions of this report have been audited by our
U.K.
auditors, KPMG LLP (U.K.) as indicated.
A-4
Single Total Figure of Compensation for Directors (Audited)
Below is the compensation earned by each of our directors in
2014
and
2013
. The values reflected in the Long-Term Performance Awards column and the
SAR
/Option Awards column are based on market prices as described in footnotes 3 and 4 below and not grant date fair values.
|
Director
|
Year
|
Fees and Salary ($)
|
Taxable Benefits ($)(1)
|
Annual Performance Awards
($)(2)
|
Long-Term Performance Awards
($)(3)
|
SAR/Option Awards
($)(4)
|
Commit-ment Bonus ($)(5)
|
Pension
($)(6)
|
Total ($)
|
||||||||||||||||||
|
Executive
|
|||||||||||||||||||||||||||
|
Michael T. Fries
|
2014
|
1,863,462
|
|
1,231,800
|
|
7,846,000
|
|
107,429,966
|
|
(7)
|
8,292,888
|
|
5,000,000
|
|
—
|
|
131,664,116
|
|
|||||||||
|
2013
|
1,365,385
|
|
834,899
|
|
3,960,000
|
|
6,204,619
|
|
5,616,000
|
|
—
|
|
—
|
|
17,980,903
|
|
|||||||||||
|
Non-Executive
|
|||||||||||||||||||||||||||
|
Andrew J. Cole (8)
|
2014
|
115,000
|
|
(9)
|
421
|
|
—
|
|
—
|
|
43,063
|
|
—
|
|
—
|
|
158,484
|
|
|||||||||
|
2013
|
61,094
|
|
(9)
|
313
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
61,407
|
|
||||||||||
|
John P. Cole, Jr.
|
2014
|
121,000
|
|
(9)
|
319
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
241,409
|
|
|||||||||
|
2013
|
118,233
|
|
(9)
|
313
|
|
—
|
|
—
|
|
206,772
|
|
—
|
|
—
|
|
325,318
|
|
||||||||||
|
Miranda Curtis
|
2014
|
121,750
|
|
3,246
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
245,086
|
|
||||||||||
|
2013
|
125,766
|
|
3,353
|
|
—
|
|
—
|
|
249,019
|
|
—
|
|
—
|
|
378,138
|
|
|||||||||||
|
John W. Dick
|
2014
|
123,250
|
|
(9)
|
33,073
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
276,413
|
|
|||||||||
|
2013
|
128,766
|
|
(9)
|
5,533
|
|
—
|
|
—
|
|
247,961
|
|
—
|
|
—
|
|
382,260
|
|
||||||||||
|
Paul A. Gould
|
2014
|
149,000
|
|
(9)(10)
|
18,003
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
287,093
|
|
|||||||||
|
2013
|
146,983
|
|
(9)(10)
|
10,847
|
|
—
|
|
—
|
|
94,320
|
|
—
|
|
—
|
|
252,150
|
|
||||||||||
|
Richard R. Green
|
2014
|
114,250
|
|
(9)
|
303
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
234,643
|
|
|||||||||
|
2013
|
102,733
|
|
(9)
|
19,613
|
|
—
|
|
—
|
|
136,567
|
|
—
|
|
—
|
|
258,913
|
|
||||||||||
|
John C. Malone
|
2014
|
—
|
|
475,806
|
|
—
|
|
—
|
|
1,096,331
|
|
—
|
|
—
|
|
1,572,137
|
|
||||||||||
|
2013
|
—
|
|
177,391
|
|
—
|
|
—
|
|
1,671,465
|
|
—
|
|
—
|
|
1,848,856
|
|
|||||||||||
|
David E. Rapley
|
2014
|
125,750
|
|
(10)
|
36,383
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
282,223
|
|
|||||||||
|
2013
|
114,234
|
|
(10)
|
33,530
|
|
—
|
|
—
|
|
206,772
|
|
—
|
|
—
|
|
354,536
|
|
||||||||||
|
Larry E. Romrell
|
2014
|
121,750
|
|
22,389
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
264,229
|
|
||||||||||
|
2013
|
110,234
|
|
13,381
|
|
—
|
|
—
|
|
206,772
|
|
—
|
|
—
|
|
330,387
|
|
|||||||||||
|
JC Sparkman
|
2014
|
147,500
|
|
9,750
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
277,340
|
|
||||||||||
|
2013
|
130,975
|
|
6,816
|
|
—
|
|
—
|
|
206,772
|
|
—
|
|
—
|
|
344,563
|
|
|||||||||||
|
J. David Wargo
|
2014
|
123,250
|
|
(9)(10)
|
22,112
|
|
—
|
|
—
|
|
120,090
|
|
—
|
|
—
|
|
265,452
|
|
|||||||||
|
2013
|
120,483
|
|
(9)(10)
|
9,654
|
|
—
|
|
—
|
|
94,320
|
|
—
|
|
—
|
|
224,457
|
|
||||||||||
___________________
|
(1)
|
Taxable benefits provided to our executive director include the following:
|
|
Executive Director
|
Year
|
Group Term Life Insurance ($)
|
Interest on Deferred Compensation ($)
|
Use of Company Plane & Sports Box($)
|
Executive Health Plan ($)
|
Professional Memberships & Fees ($)
|
Gifts & Tax Gross-up ($)
|
Total ($)
|
||||||||||||||||
|
Michael T. Fries
|
2014
|
1,656
|
|
369,921
|
|
292,079
|
|
2,400
|
|
312,587
|
|
(a)
|
253,157
|
|
1,231,800
|
|
||||||||
|
2013
|
1,656
|
|
431,653
|
|
376,690
|
|
—
|
|
22,850
|
|
2,050
|
|
834,899
|
|
||||||||||
___________________
|
(a)
|
As provided in the
Fries Agreement
, includes reimbursement for professional fees incurred in the preparation and negotiation of the
Fries Agreement
(
$289,687
).
|
A-5
Taxable benefits provided to our non-executive directors include the following:
|
Non-Executive Director
|
Year
|
Interest on Deferred Compensation
($)
|
Entertainment & Travel Expenses
($)(a)
|
Miscellaneous Expenses ($)(b)
|
Use of Company Plane ($)
|
U.K. Group Health Insurance ($)
|
Gifts & Tax Gross-up ($)
|
Total ($)
|
|||||||||||||||
|
Andrew J. Cole
|
2014
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
421
|
|
421
|
|
||||||||
|
2013
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
313
|
|
313
|
|
|||||||||
|
John P. Cole, Jr.
|
2014
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
319
|
|
319
|
|
||||||||
|
2013
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
313
|
|
313
|
|
|||||||||
|
Miranda Curtis
|
2014
|
—
|
|
—
|
|
—
|
|
—
|
|
2,577
|
|
669
|
|
3,246
|
|
||||||||
|
2013
|
—
|
|
—
|
|
—
|
|
—
|
|
3,040
|
|
313
|
|
3,353
|
|
|||||||||
|
John W. Dick
|
2014
|
—
|
|
1,522
|
|
—
|
|
28,661
|
|
2,577
|
|
313
|
|
33,073
|
|
||||||||
|
2013
|
—
|
|
1,912
|
|
—
|
|
—
|
|
3,308
|
|
313
|
|
5,533
|
|
|||||||||
|
Paul A. Gould
|
2014
|
16,030
|
|
1,486
|
|
—
|
|
—
|
|
—
|
|
487
|
|
18,003
|
|
||||||||
|
2013
|
9,326
|
|
1,208
|
|
—
|
|
—
|
|
—
|
|
313
|
|
10,847
|
|
|||||||||
|
Richard R. Green
|
2014
|
19
|
|
—
|
|
—
|
|
—
|
|
—
|
|
284
|
|
303
|
|
||||||||
|
2013
|
18
|
|
19,282
|
|
—
|
|
—
|
|
—
|
|
313
|
|
19,613
|
|
|||||||||
|
John C. Malone
|
2014
|
—
|
|
1,486
|
|
425,000
|
|
48,850
|
|
—
|
|
470
|
|
475,806
|
|
||||||||
|
2013
|
—
|
|
157,748
|
|
—
|
|
19,330
|
|
—
|
|
313
|
|
177,391
|
|
|||||||||
|
David E. Rapley
|
2014
|
33,650
|
|
2,180
|
|
—
|
|
—
|
|
—
|
|
553
|
|
36,383
|
|
||||||||
|
2013
|
21,489
|
|
11,590
|
|
—
|
|
138
|
|
—
|
|
313
|
|
33,530
|
|
|||||||||
|
Larry E. Romrell
|
2014
|
—
|
|
9,636
|
|
—
|
|
12,185
|
|
—
|
|
568
|
|
22,389
|
|
||||||||
|
2013
|
—
|
|
12,890
|
|
—
|
|
178
|
|
—
|
|
313
|
|
13,381
|
|
|||||||||
|
JC Sparkman
|
2014
|
—
|
|
—
|
|
—
|
|
9,324
|
|
—
|
|
426
|
|
9,750
|
|
||||||||
|
2013
|
—
|
|
—
|
|
—
|
|
6,816
|
|
—
|
|
—
|
|
6,816
|
|
|||||||||
|
J. David Wargo
|
2014
|
10,229
|
|
11,348
|
|
—
|
|
—
|
|
—
|
|
535
|
|
22,112
|
|
||||||||
|
2013
|
9,341
|
|
—
|
|
—
|
|
—
|
|
—
|
|
313
|
|
9,654
|
|
|||||||||
___________________
|
(a)
|
These expenses include travel and entertainment costs for spouses joining members of our board for board meetings.
|
|
(b)
|
These expenses include reimbursement for personal expenses related to the ownership of our shares and his services as chairman (
$300,000
) and the cost of a Hart Scott Rodino filing fee ($125,000).
|
|
(2)
|
The amount reflects the annual cash performance awards earned by Mr. Fries under the
2005 Incentive Plan
for 2013 and under the
2014 Incentive Plan
for
2014
. For information regarding the operation of our annual cash performance awards, including the performance metrics and maximum achievable performance awards, see the section of the
CD&A
titled
Elements of Compensation Packages—Annual Cash Performance Awards
. Our non-executive directors do not receive annual cash performance awards.
|
|
(3)
|
The amount reflects the value of
PSU
s with a performance period that ended in the year indicated based on the actual number of
PSU
s earned and the closing price of the shares as reported by
NASDAQ
on December 31 of such year. The
PSU
s generally vest in the year following the end of the performance period as long as the executive director is employed by our company on the vesting date. For information regarding the operation of our
PSU
s including the performance measures and targets, see the section of the
CD&A
titled
Elements of Compensation Packages—Equity Awards.
With respect to
2014
, however, the amount also includes the value of the CEO Performance Award with a performance award period that ended on
December 31, 2014
. These
PSU
s vest in three equal installments on March 15, 2015, 2016 and 2017. For information regarding the operation of the CEO Performance Award, including the performance condition, see the section of the
CD&A
titled
Elements of Compensation Packages—Equity Incentive Awards.
Our non-executive directors do not participate in our long-term incentive programs.
|
|
(4)
|
The amounts represent the intrinsic value for all
SAR
s (i.e., the spread between the base price of the applicable
SAR
and the market price of the underlying shares on the respective vesting dates) or options that vested during the years indicated as calculated based on the closing prices of our shares on the applicable vesting dates, as reported by
NASDAQ
. For our executive director, the amounts consist solely of the aggregate value for all
SAR
s that vested quarterly during the applicable year. For our non-executive directors, the amounts consist of the value of shares received by such director upon the vesting of
RSU
s during the years indicated and the value of options that vested annually during the applicable year, added together. No value is included
|
A-6
for vested
RSU
s where the director elected to defer receipt of the shares under the Director Deferred Compensation Plan.
SAR
awards for our executive director and
RSU
and option awards for our non-executive directors are not subject to performance measures but are time-vested only. We believe time-vested awards are appropriate in order to have our directors retain a long-term interest in our company. The value of the awards will move with our share prices, which provides incentive to deliver on our company’s long-term strategic objectives and is in line with our shareholders’ interests.
|
(5)
|
Represents a commitment bonus paid to our executive director at the time the
Fries Agreement
was signed in April 2014 and as stated in the directors’ compensation policy. It was not subject to any performance measures.
|
|
(6)
|
We do not provide a pension or other defined benefit plan for our directors.
|
|
(7)
|
The amount has been adjusted to reflect the division of Mr. Fries’
PSU
awards between him and his former spouse pursuant to a qualified domestic relations order. As required by the order,
Liberty Global
transferred a portion of the
2013 PSU
s to his former spouse in 2014, which were converted in 2015 to time-vested
RSU
s pursuant to the terms of the
2013 PSU
s. The value of the award to his former spouse at December 31, 2014, was $2,163,322.
|
|
(8)
|
Mr. A. Cole was appointed to our board of directors in June 2013, and compensation for his services is from the date of such appointment.
|
|
(9)
|
Includes the dollar amount of fees paid in our Class A shares and Class C shares at the election of the director.
|
|
(10)
|
The following table indicates the amount of fees included in the table that the directors listed have elected to defer in the years indicated pursuant to the Director Deferred Compensation Plan. Such deferred amounts accrue interest at the rate of
9%
per annum, compounded daily, until paid in full.
|
|
Non-Executive Director
|
Year
|
Amount Deferred ($)
|
|||
|
Paul A. Gould
|
2014
|
77
|
|
||
|
2013
|
72,348
|
|
|||
|
David E. Rapley
|
2014
|
110,000
|
|
||
|
2013
|
101,484
|
|
|||
|
J. David Wargo
|
2014
|
98
|
|
||
|
2013
|
1,019
|
|
|||
2014
Equity Incentive Grants (Audited)
During
2014
, the compensation committee approved performance awards to the executive director under the
2014 Incentive Plan
consisting of
2014 PSU
s and the CEO Performance Award in the form of
PSU
s. Details of these awards are summarized below with further details set out in the
CD&A
on the applicable performance metrics.
|
Director
|
Grant Date
|
Type of Award (1)
|
Class of Shares
|
Number of Shares
|
Base Price/Share
|
Face Value (2)
|
Performance Period
|
% Vesting at Threshold
|
|||||||||||||
|
Michael T. Fries
|
4/30/2014
|
CEO-PSUs
|
(3)
|
Class A
|
1,000,000
|
$
|
—
|
|
$
|
39,820,000
|
|
9 months ending 12/31/2014
|
N/A
|
||||||||
|
4/30/2014
|
CEO-PSUs
|
(3)
|
Class B
|
1,000,000
|
$
|
—
|
|
$
|
39,850,000
|
|
9 months ending 12/31/2014
|
N/A
|
|||||||||
|
3/31/2014
|
2014 PSUs
|
(4)
|
Class A
|
78,276
|
$
|
—
|
|
$
|
3,256,282
|
|
2 years ending 12/31/2015
|
N/A
|
|||||||||
|
3/31/2014
|
2014 PSUs
|
(4)
|
Class C
|
156,552
|
$
|
—
|
|
$
|
6,373,232
|
|
2 years ending 12/31/2015
|
N/A
|
|||||||||
__________________
|
(1)
|
The terms of the
PSU
s awarded to our executive director are summarized in the
CD&A
under
Elements of Compensation Packages—Equity Incentive Awards
in the proxy statement. Generally, the compensation committee sets the performance targets corresponding to a selected performance measure or measures and a base (minimum) performance objective that must be achieved in order for any portion of our executive director’s
PSU
awards to be earned. The level of achievement of the performance target within a range established by the compensation committee determines the percentage of the
PSU
award earned during the performance period, subject to reduction or forfeiture based on individual performance.
|
|
(2)
|
For purposes of this table, the
PSU
s have been valued using the closing per share prices on the date of grant. The
U.K.
regulations applying to shares and share options require disclosure of the “face value” of such awards based on the maximum number of shares that would vest if all performance measures and targets are met multiplied by either the share price on the date of grant or an average share price.
|
A-7
|
(3)
|
Details of the performance condition are set forth in the
CD&A
of the proxy statement. These
PSU
s vest in three equal annual installments on each of March 15, 2015, 2016 and 2017.
|
|
(4)
|
Details for the performance measures and targets are set forth in the
CD&A
of the proxy statement. If earned, the
2014 PSU
s will vest in two equal semi-annual installments on March 31, 2016 and September 30, 2016.
|
Payments to Former Directors
There have been no payments made to former directors and no payments made for loss of office during
2014
.
Share Ownership Policy
Our share ownership policy is summarized in the directors’ compensation policy and in the
CD&A
under
Elements of Our Compensation Packages—Share Ownership Policy
of the proxy statement. As of
December 31, 2014
, the value of the ordinary shares owned by our executive director, calculated in accordance with the policy, significantly exceeded the requirements of the policy. Our non-executive directors are not subject to this policy, although they are encouraged to own ordinary shares.
Director Share Ownership and Equity Grants (Audited)
The following table shows the number of shares owned by our directors as well as equity awards outstanding as of
March 31, 2015
. The equity awards consist of options,
SAR
s,
PSU
s and
PSAR
s for our executive director and options and
RSU
s for our non-executive directors.
|
Time Vested Options/SARs/RSUs
|
Performance Awards
|
|||||||||||||||||||||||||
|
Director
|
Amount of Shares Beneficially Owned (#)
|
Number of Shares Underlying Unexercised Options/SARs (#) Exercisable
|
Number of Shares Underlying Unexercised Options/SARs (#) Unexercisable
|
Base or Exercise Price
($)
|
Number of Shares Underlying Unvested RSUs (#)
|
Expiration Date
|
Earned Performance Awards (#)(unvested)
|
Unearned Performance Awards (#)
|
||||||||||||||||||
|
Executive
|
||||||||||||||||||||||||||
|
Michael T. Fries
|
||||||||||||||||||||||||||
|
Class A
|
375,182
|
|
(1)
|
67,960
|
|
—
|
|
13.81
|
|
—
|
|
5/1/2017
|
16,629
|
|
78,276
|
|
(2)
|
|||||||||
|
43,005
|
|
2,867
|
|
(3)
|
23.37
|
|
—
|
|
5/1/2018
|
666,667
|
|
65,152
|
|
(4)
|
||||||||||||
|
29,859
|
|
13,573
|
|
(5)
|
25.12
|
|
—
|
|
5/1/2019
|
925,000
|
|
(6)
|
||||||||||||||
|
17,906
|
|
23,022
|
|
(7)
|
37.23
|
|
—
|
|
5/1/2020
|
|||||||||||||||||
|
36,003
|
|
156,013
|
|
(8)
|
40.91
|
|
—
|
|
5/1/2021
|
|||||||||||||||||
|
Class B
|
333,333
|
|
(9)
|
—
|
|
—
|
|
—
|
|
—
|
|
666,667
|
|
|||||||||||||
|
Class C
|
986,031
|
|
(1)
|
67,960
|
|
—
|
|
13.67
|
|
—
|
|
5/1/2017
|
49,887
|
|
156,552
|
|
(2)
|
|||||||||
|
135,920
|
|
—
|
|
13.54
|
|
—
|
|
5/1/2017
|
130,304
|
|
(4)
|
|||||||||||||||
|
43,005
|
|
2,867
|
|
(3)
|
23.13
|
|
—
|
|
5/1/2018
|
925,000
|
|
(6)
|
||||||||||||||
|
86,010
|
|
5,734
|
|
(3)
|
22.20
|
|
—
|
|
5/1/2018
|
1,850,000
|
|
(6)
|
||||||||||||||
|
29,859
|
|
13,573
|
|
(5)
|
24.87
|
|
—
|
|
5/1/2019
|
|||||||||||||||||
|
59,719
|
|
27,145
|
|
(5)
|
24.10
|
|
—
|
|
5/1/2019
|
|||||||||||||||||
|
17,906
|
|
23,022
|
|
(7)
|
36.85
|
|
—
|
|
5/1/2020
|
|||||||||||||||||
|
35,812
|
|
46,044
|
|
(7)
|
34.41
|
|
—
|
|
5/1/2020
|
|||||||||||||||||
|
72,006
|
|
312,026
|
|
(8)
|
39.09
|
|
—
|
|
5/1/2021
|
|||||||||||||||||
|
Non-Executive
|
||||||||||||||||||||||||||
|
Andrew J. Cole
|
||||||||||||||||||||||||||
|
Class A
|
2,484
|
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
||||||||||||||
|
16,492
|
|
—
|
|
17.08
|
|
—
|
|
6/11/2022
|
||||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
5,542
|
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
16,492
|
|
—
|
|
16.91
|
|
—
|
|
6/11/2022
|
||||||||||||||||||
|
24,616
|
|
—
|
|
15.00
|
|
—
|
|
6/11/2022
|
||||||||||||||||||
|
—
|
|
10,883
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
John P. Cole, Jr.
|
||||||||||||||||||||||||||
|
Class A
|
10,135
|
|
10,000
|
|
—
|
|
11.66
|
|
—
|
|
6/15/2015
|
|||||||||||||||
A-8
|
Time Vested Options/SARs/RSUs
|
Performance Awards
|
|||||||||||||||||||||||||
|
Director
|
Amount of Shares Beneficially Owned (#)
|
Number of Shares Underlying Unexercised Options/SARs (#) Exercisable
|
Number of Shares Underlying Unexercised Options/SARs (#) Unexercisable
|
Base or Exercise Price
($)
|
Number of Shares Underlying Unvested RSUs (#)
|
Expiration Date
|
Earned Performance Awards (#)(unvested)
|
Unearned Performance Awards (#)
|
||||||||||||||||||
|
5,000
|
|
—
|
|
11.15
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
10,000
|
|
—
|
|
19.95
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
10,000
|
|
—
|
|
16.58
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.49
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
1,406
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
28,767
|
|
10,000
|
|
—
|
|
11.55
|
|
—
|
|
6/15/2015
|
|||||||||||||||
|
20,000
|
|
—
|
|
10.99
|
|
—
|
|
6/15/2015
|
||||||||||||||||||
|
5,000
|
|
—
|
|
11.04
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
10,000
|
|
—
|
|
10.79
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
10,000
|
|
—
|
|
19.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
20,000
|
|
—
|
|
18.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
10,000
|
|
—
|
|
16.42
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
20,000
|
|
—
|
|
15.70
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.42
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
20,000
|
|
—
|
|
7.41
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
1,406
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
2,810
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
2,072
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
10,883
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Miranda Curtis
|
||||||||||||||||||||||||||
|
Class A
|
126,355
|
|
2,812
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
|||||||||||||||
|
996
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
371,889
|
|
2,812
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
|||||||||||||||
|
5,618
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
2,072
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
10,883
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
John W. Dick
|
||||||||||||||||||||||||||
|
Class A
|
16,364
|
|
10,000
|
|
—
|
|
11.66
|
|
—
|
|
6/15/2015
|
|||||||||||||||
|
10,000
|
|
—
|
|
11.15
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
10,000
|
|
—
|
|
19.95
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
10,000
|
|
—
|
|
16.58
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.49
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
2,812
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
A-9
|
Time Vested Options/SARs/RSUs
|
Performance Awards
|
|||||||||||||||||||||||||
|
Director
|
Amount of Shares Beneficially Owned (#)
|
Number of Shares Underlying Unexercised Options/SARs (#) Exercisable
|
Number of Shares Underlying Unexercised Options/SARs (#) Unexercisable
|
Base or Exercise Price
($)
|
Number of Shares Underlying Unvested RSUs (#)
|
Expiration Date
|
Earned Performance Awards (#)(unvested)
|
Unearned Performance Awards (#)
|
||||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
42,548
|
|
10,000
|
|
—
|
|
11.04
|
|
—
|
|
6/22/2016
|
|||||||||||||||
|
10,000
|
|
—
|
|
19.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
20,000
|
|
—
|
|
18.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
10,000
|
|
—
|
|
16.42
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
20,000
|
|
—
|
|
15.70
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.42
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
20,000
|
|
—
|
|
7.41
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
2,812
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
5,618
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
2,072
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
10,883
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Paul A. Gould
|
||||||||||||||||||||||||||
|
Class A
|
198,791
|
|
10,000
|
|
—
|
|
11.66
|
|
—
|
|
6/15/2015
|
|||||||||||||||
|
10,000
|
|
—
|
|
11.15
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
10,000
|
|
—
|
|
19.95
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
5,000
|
|
—
|
|
16.58
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
5,000
|
|
—
|
|
7.49
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
1,406
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class B
|
51,429
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||||||
|
Class C
|
915,249
|
|
10,000
|
|
—
|
|
11.55
|
|
—
|
|
6/15/2015
|
|||||||||||||||
|
20,000
|
|
—
|
|
10.99
|
|
—
|
|
6/15/2015
|
||||||||||||||||||
|
10,000
|
|
—
|
|
11.04
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
20,000
|
|
—
|
|
10.79
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
10,000
|
|
—
|
|
19.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
20,000
|
|
—
|
|
18.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
5,000
|
|
—
|
|
16.42
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
10,000
|
|
—
|
|
15.70
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
5,000
|
|
—
|
|
7.42
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.41
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
1,406
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
2,810
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
2,072
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
10,883
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Richard R. Green
|
||||||||||||||||||||||||||
|
Class A
|
4,320
|
|
10,000
|
|
—
|
|
6.42
|
|
—
|
|
12/16/2018
|
|||||||||||||||
A-10
|
Time Vested Options/SARs/RSUs
|
Performance Awards
|
|||||||||||||||||||||||||
|
Director
|
Amount of Shares Beneficially Owned (#)
|
Number of Shares Underlying Unexercised Options/SARs (#) Exercisable
|
Number of Shares Underlying Unexercised Options/SARs (#) Unexercisable
|
Base or Exercise Price
($)
|
Number of Shares Underlying Unvested RSUs (#)
|
Expiration Date
|
Earned Performance Awards (#)(unvested)
|
Unearned Performance Awards (#)
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.49
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
2,812
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
9,017
|
|
10,000
|
|
—
|
|
6.36
|
|
—
|
|
12/16/2018
|
|||||||||||||||
|
20,000
|
|
—
|
|
6.05
|
|
—
|
|
12/16/2018
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.42
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
20,000
|
|
—
|
|
7.41
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
2,812
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
5,618
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
2,072
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
10,883
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
John C. Malone
|
||||||||||||||||||||||||||
|
Class A
|
1,042,480
|
|
(13)
|
27,323
|
|
—
|
|
17.98
|
|
—
|
|
12/16/2020
|
||||||||||||||
|
22,141
|
|
—
|
|
23.37
|
|
—
|
|
5/1/2021
|
||||||||||||||||||
|
16,069
|
|
8,035
|
|
(14)
|
25.12
|
|
—
|
|
5/1/2022
|
|||||||||||||||||
|
6,065
|
|
12,129
|
|
(15)
|
37.23
|
|
—
|
|
5/1/2023
|
|||||||||||||||||
|
—
|
|
29,699
|
|
(16)
|
40.91
|
|
—
|
|
5/1/2021
|
|||||||||||||||||
|
Class B
|
8,677,225
|
|
(9)(13)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||||||||
|
Class C
|
13,203,461
|
|
(13)
|
27,323
|
|
—
|
|
17.80
|
|
—
|
|
12/16/2020
|
||||||||||||||
|
57,638
|
|
—
|
|
16.97
|
|
—
|
|
12/16/2020
|
||||||||||||||||||
|
22,141
|
|
—
|
|
23.13
|
|
—
|
|
5/1/2021
|
||||||||||||||||||
|
46,388
|
|
—
|
|
22.20
|
|
—
|
|
5/1/2021
|
||||||||||||||||||
|
16,069
|
|
8,035
|
|
(14)
|
24.87
|
|
—
|
|
5/1/2022
|
|||||||||||||||||
|
33,332
|
|
16,666
|
|
(14)
|
24.10
|
|
—
|
|
5/1/2022
|
|||||||||||||||||
|
6,065
|
|
12,129
|
|
(15)
|
36.85
|
|
—
|
|
5/1/2023
|
|||||||||||||||||
|
13,056
|
|
26,112
|
|
(15)
|
34.41
|
|
—
|
|
5/1/2023
|
|||||||||||||||||
|
—
|
|
59,398
|
|
(16)
|
39.09
|
|
—
|
|
5/1/2021
|
|||||||||||||||||
|
David E. Rapley
|
||||||||||||||||||||||||||
|
Class A
|
2,049
|
|
—
|
|
—
|
|
—
|
|
736
|
|
(17)
|
6/25/2015
|
||||||||||||||
|
3,333
|
|
—
|
|
7.49
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
937
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
2,721
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
18,185
|
|
—
|
|
—
|
|
—
|
|
1,472
|
|
(17)
|
6/25/2015
|
||||||||||||||
|
3,333
|
|
—
|
|
7.42
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
6,666
|
|
—
|
|
7.41
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
937
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
1,872
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
2,072
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
A-11
|
Time Vested Options/SARs/RSUs
|
Performance Awards
|
|||||||||||||||||||||||||
|
Director
|
Amount of Shares Beneficially Owned (#)
|
Number of Shares Underlying Unexercised Options/SARs (#) Exercisable
|
Number of Shares Underlying Unexercised Options/SARs (#) Unexercisable
|
Base or Exercise Price
($)
|
Number of Shares Underlying Unvested RSUs (#)
|
Expiration Date
|
Earned Performance Awards (#)(unvested)
|
Unearned Performance Awards (#)
|
||||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Larry E. Romrell
|
||||||||||||||||||||||||||
|
Class A
|
26,287
|
|
469
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
|||||||||||||||
|
664
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
61,366
|
|
469
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
|||||||||||||||
|
936
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
664
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,380
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
10,883
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
JC Sparkman
|
||||||||||||||||||||||||||
|
Class A
|
18,330
|
|
—
|
|
—
|
|
—
|
|
736
|
|
(17)
|
6/25/2015
|
||||||||||||||
|
10,000
|
|
—
|
|
19.95
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
10,000
|
|
—
|
|
16.58
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
5,000
|
|
—
|
|
7.49
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
1,406
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
2,721
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
45,940
|
|
—
|
|
—
|
|
—
|
|
1,472
|
|
(17)
|
6/25/2015
|
||||||||||||||
|
10,000
|
|
—
|
|
19.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
20,000
|
|
—
|
|
18.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
10,000
|
|
—
|
|
16.42
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
20,000
|
|
—
|
|
15.70
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
5,000
|
|
—
|
|
7.42
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.41
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
1,406
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
2,810
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
2,072
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
J. David Wargo
|
||||||||||||||||||||||||||
|
Class A
|
4,160
|
|
10,000
|
|
—
|
|
11.66
|
|
—
|
|
6/15/2015
|
|||||||||||||||
|
10,000
|
|
—
|
|
11.15
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
10,000
|
|
—
|
|
19.95
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
A-12
|
Time Vested Options/SARs/RSUs
|
Performance Awards
|
|||||||||||||||||||||||||
|
Director
|
Amount of Shares Beneficially Owned (#)
|
Number of Shares Underlying Unexercised Options/SARs (#) Exercisable
|
Number of Shares Underlying Unexercised Options/SARs (#) Unexercisable
|
Base or Exercise Price
($)
|
Number of Shares Underlying Unvested RSUs (#)
|
Expiration Date
|
Earned Performance Awards (#)(unvested)
|
Unearned Performance Awards (#)
|
||||||||||||||||||
|
10,000
|
|
—
|
|
16.58
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.49
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
1,406
|
|
—
|
|
13.44
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
21.03
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.37
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.93
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
5,442
|
|
(11)
|
43.53
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
|
Class C
|
12,784
|
|
(18)
|
10,000
|
|
—
|
|
11.55
|
|
—
|
|
6/15/2015
|
||||||||||||||
|
20,000
|
|
—
|
|
10.99
|
|
—
|
|
6/15/2015
|
||||||||||||||||||
|
10,000
|
|
—
|
|
11.04
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
20,000
|
|
—
|
|
10.79
|
|
—
|
|
6/22/2016
|
||||||||||||||||||
|
10,000
|
|
—
|
|
19.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
20,000
|
|
—
|
|
18.76
|
|
—
|
|
6/19/2017
|
||||||||||||||||||
|
10,000
|
|
—
|
|
16.42
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
20,000
|
|
—
|
|
15.70
|
|
—
|
|
6/12/2018
|
||||||||||||||||||
|
10,000
|
|
—
|
|
7.42
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
20,000
|
|
—
|
|
7.41
|
|
—
|
|
6/17/2019
|
||||||||||||||||||
|
1,406
|
|
—
|
|
13.32
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
2,810
|
|
—
|
|
13.40
|
|
—
|
|
6/17/2020
|
||||||||||||||||||
|
996
|
|
—
|
|
20.82
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
2,072
|
|
—
|
|
20.10
|
|
—
|
|
6/21/2021
|
||||||||||||||||||
|
1,263
|
|
632
|
|
(12)
|
24.13
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
2,614
|
|
1,306
|
|
(12)
|
23.45
|
|
—
|
|
6/19/2022
|
|||||||||||||||||
|
1,471
|
|
2,941
|
|
(10)
|
36.56
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
3,184
|
|
6,366
|
|
(10)
|
33.95
|
|
—
|
|
6/28/2020
|
|||||||||||||||||
|
—
|
|
10,883
|
|
(11)
|
41.94
|
|
—
|
|
6/26/2021
|
|||||||||||||||||
__________________
|
(1)
|
Includes
1,977
Class A shares and 13,063 Class C shares held in the
401(k) Plan
for the benefit of Mr. Fries.
|
|
(2)
|
Represents the target number of Class A and Class C shares underlying
2014 PSU
s that may be earned by the executive director. If earned, the
2014 PSU
s will vest in two equal installments on March 31, 2016 and September 30, 2016, respectively.
|
|
(3)
|
Vests in one remaining quarterly installment on May 1, 2015.
|
|
(4)
|
Represents the target number of Class A and Class C shares underlying
2015 PSU
s that may be earned by the executive director. If earned, the
2015 PSU
s will vest in two equal installments on March 31, 2017 and September 30, 2017, respectively.
|
|
(5)
|
Vests in five equal remaining quarterly installments from May 1, 2015 to May 1, 2016.
|
|
(6)
|
Represents the target number of Class A and Class C shares subject to the
PSAR
s of the
2013 Challenge Awards
that may be earned by the executive director. If earned, these
PSAR
s will vest on June 24, 2016. Terms of the
PSAR
s are:
|
|
Grant Date
|
Class of Shares
|
Number of Shares (#)
|
Base Price ($)
|
Expiration Date
|
||||||
|
6/24/2013
|
Class A
|
925,000
|
|
35.03
|
|
6/24/2020
|
||||
|
6/24/2013
|
Class C
|
925,000
|
|
34.67
|
|
6/24/2020
|
||||
|
6/24/2013
|
Class C
|
1,850,000
|
|
32.78
|
|
6/24/2020
|
||||
|
(7)
|
Vests in nine equal remaining quarterly installments from May 1, 2015 to May 1, 2017.
|
|
(8)
|
Vests in 13 equal remaining quarterly installments from May 1, 2015 to May 1, 2018.
|
A-13
|
(9)
|
Based on the Schedule 13D/A (Amendment No. 7) of Mr. Malone, filed with the
SEC
on February 18, 2014, pursuant to a letter agreement dated as of February 13, 2014, among
Michael T. Fries
, our
CEO
and our executive director, Mr. Malone and the
Malone Trust
have agreed that, for so long as Mr. Fries is employed as a principal executive officer by us or serving on our board of directors, (a) in the event the
Malone Trust
or any permitted transferee (as defined in the letter agreement) is not voting the Class B shares owned by the
Malone Trust
, Mr. Fries will have the right to vote such Class B shares and (b) in the event the
Malone Trust
or any permitted transferee determines to sell such Class B shares, Mr. Fries (individually or through an entity he controls) will have an exclusive right to negotiate to purchase such shares, and if the parties fail to come to an agreement and the
Malone Trust
or any permitted transferee subsequently intends to enter into a sale transaction with a third party, Mr. Fries (or an entity controlled by him) will have a right to match the offer made by such third party.
|
|
(10)
|
Vests in two equal remaining annual installments on
June 25, 2015
and the date of our annual general meeting in 2016.
|
|
(11)
|
Vests as to one-third of the option shares each on the date of the first, second and third annual general meetings of shareholders following the date of grant.
|
|
(12)
|
Vests in one remaining annual installment on
June 25, 2015
.
|
|
(13)
|
Includes
90,303
Class A shares and
680,041
Class C shares held by Mr. Malone’s spouse, as to which shares Mr. Malone has disclaimed beneficial ownership. Also includes
8,677,225
Class B shares and
7,727,225
Class C shares held by the
Malone Trust
.
|
|
(14)
|
Vests in one remaining annual installment on May 1, 2015.
|
|
(15)
|
Vests in two equal remaining annual installments on May 1, 2015 and May 1, 2016.
|
|
(16)
|
Vests in three equal remaining annual installments on May 1, 2015, 2016 and 2017.
|
|
(17)
|
Vests in full on
June 25, 2015
.
|
|
(18)
|
Includes
32
Class C shares held by Mr. Wargo’s spouse, as to which Mr. Wargo has disclaimed beneficial ownership.
|
Option Exercises and Stock Vested (Audited)
The table below sets forth certain information concerning each exercise of options or
SAR
s by, and each vesting of restricted shares or
RSU
s of, our directors during the year ended
December 31, 2014
. The table below does not include directors who elected to defer receipt of our shares upon vesting of
RSU
s pursuant to the Director Deferred Compensation Plan.
|
Option/SARs Awards
|
Stock Awards
|
||||||||||||||||||||
|
Director
|
Grant Date
|
Number of
Shares Acquired on Exercise (#) |
Value Realized
on Exercise ($)(1) |
Expiration Date
|
Vest Date
|
Number of
Shares Acquired on Vesting (#) |
Value Realized
on Vesting ($)(1) |
||||||||||||||
|
Michael T. Fries
|
|||||||||||||||||||||
|
Class A
|
11/24/2004
|
73,809
|
|
2,526,420
|
|
11/24/2014
|
3/31/2014
|
9,020
|
|
(2)
|
375,232
|
|
|||||||||
|
Class A
|
|
|
|
|
9/30/2014
|
9,021
|
|
(2)
|
383,663
|
|
|||||||||||
|
|
|
|
|
||||||||||||||||||
|
Class C
|
11/24/2004
|
221,425
|
|
7,337,250
|
|
11/24/2014
|
3/31/2014
|
27,060
|
|
(2)
|
1,101,613
|
|
|||||||||
|
Class C
|
|
|
|
|
9/30/2014
|
27,063
|
|
(2)
|
1,109,989
|
|
|||||||||||
|
|
|
|
|
||||||||||||||||||
|
John W. Dick
|
|||||||||||||||||||||
|
Class A
|
3/11/2004
|
11,150
|
|
744,299
|
|
3/11/2014
|
|||||||||||||||
|
Class C
|
3/11/2004
|
10,450
|
|
691,365
|
|
3/11/2014
|
|||||||||||||||
|
Class C
|
6/15/2005
|
30,000
|
|
913,303
|
|
6/15/2015
|
|||||||||||||||
|
Class C
|
6/22/2006
|
20,000
|
|
616,673
|
|
6/22/2016
|
|||||||||||||||
|
Paul Gould
|
|||||||||||||||||||||
|
Class A
|
6/1/2004
|
586
|
|
21,366
|
|
6/1/2014
|
|||||||||||||||
|
Class C
|
6/1/2004
|
1,758
|
|
60,633
|
|
6/1/2014
|
|||||||||||||||
|
J. David Wargo
|
|||||||||||||||||||||
|
Class A
|
6/22/2004
|
3,192
|
|
118,072
|
|
6/22/2014
|
|||||||||||||||
|
Class C
|
6/22/2004
|
9,576
|
|
338,256
|
|
6/22/2014
|
|||||||||||||||
|
(1)
|
Value reflects the aggregate amount realized upon the exercise or vesting of awards for Class A and Class C shares in
2014
.
|
|
(2)
|
Includes shares withheld by us to pay the minimum withholding tax due upon vesting of
RSU
s in
2014
.
|
A-14
Percentage Change in Compensation of Executive Director Compared with Employees
The following table shows the percentage change in salary, taxable benefits and annual cash performance awards for our executive director and, as stated in the note to the table, our corporate employees located in our Denver corporate offices for the last two fiscal years.
|
Executive Director
|
Employees (1)
|
|||
|
Salary
|
36%
|
8%
|
||
|
Taxable benefits
|
3%
|
2%
|
||
|
Annual cash performance awards
|
98%
|
41%
|
||
__________________
|
(1)
|
Due to the complexity of our global operations with operations in multiple countries with different currencies, cost of living and work culture, we selected as the comparator group for the above table our corporate employees based in our Denver office. This group of employees is considered appropriate because our executive director is based in Denver, his compensation is based on
U.S.
customs and standards and most of the employees in our Denver corporate offices participate in an annual cash performance award program and benefit programs similar to those available to our executive director. The main difference on benefits for our executive director is use of our company airplane and participation in the deferred compensation program. To determine the percentage change, we used the average amount of salary, taxable benefits and annual cash performance awards based on the number of corporate salaried employees at the end of each fiscal year (without adjustment for leavers and joiners).
|
Relative Importance of Spend on Pay
The following table shows our expenditures for the last two fiscal years on total compensation costs (as calculated under
GAAP
) for all employees and our share repurchase programs.
|
2014
|
2013
|
Percentage Change
|
|||||||
|
in millions
|
|||||||||
|
Compensation costs (1)
|
$
|
2,960.3
|
|
$
|
2,443.5
|
|
21%
|
||
|
Share repurchase programs (2)
|
$
|
1,596.9
|
|
$
|
1,151.9
|
|
39%
|
||
__________________
|
(1)
|
Includes costs for wages and salaries, share-based compensation, pension and social security and benefits. The amounts for
2014
and
2013
do not include $6.6 million and $65.9 million, respectively, of compensation costs related to discontinued operations.
|
|
(2)
|
Includes direct acquisition costs and the effects of derivative instruments, where applicable.
|
A-15
Past Performance
Total Shareholder Return Graph
The following graph compares the change from January 1, 2009 to
December 31, 2014
in the cumulative total shareholder return on our Class A shares, our Class B shares, our Class C shares, NASDAQ US Benchmark TR Index and the ICB 6500 Telecommunications (Supersector) (assuming reinvestment of dividends, as applicable). The graph assumes that $100 was invested on January 1, 2009.
|
|
As of December 31,
|
|||||||||||||||||||||||
|
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
||||||||||||||||||
|
Liberty Global Class A (a)
|
$
|
137.64
|
|
$
|
222.39
|
|
$
|
257.93
|
|
$
|
395.69
|
|
$
|
559.41
|
|
$
|
617.59
|
|
||||||
|
Liberty Global Class B (a)
|
$
|
138.79
|
|
$
|
226.35
|
|
$
|
259.85
|
|
$
|
397.04
|
|
$
|
558.00
|
|
$
|
624.75
|
|
||||||
|
Liberty Global Class C (a)
|
$
|
144.01
|
|
$
|
223.19
|
|
$
|
260.34
|
|
$
|
387.09
|
|
$
|
555.47
|
|
$
|
636.50
|
|
||||||
|
ICB 6500 Telecommunications
|
$
|
110.92
|
|
$
|
132.29
|
|
$
|
141.18
|
|
$
|
168.43
|
|
$
|
191.00
|
|
$
|
196.20
|
|
||||||
|
Nasdaq US Benchmark TR Index
|
$
|
129.26
|
|
$
|
151.94
|
|
$
|
152.42
|
|
$
|
177.46
|
|
$
|
236.88
|
|
$
|
266.39
|
|
||||||
_______________
|
(a)
|
Prior to the June 7, 2013 completion of the
Virgin Media Acquisition
, amounts represent market prices for
LGI
Series A, Series B and Series C common stock.
|
We chose each of the above Indexes as they include companies listed on the same exchange as our company. In addition, we chose the ICB 6500 Telecommunications index because it includes companies that engage in operations similar to our company.
Six Year
CEO
Total Compensation
|
2014
|
2013
|
2012
|
2011
|
2010
|
2009
|
|||||||||||||||||||
|
Single Total Compensation Figure
|
$
|
131,664,116
|
|
$
|
17,980,903
|
|
$
|
14,544,935
|
|
$
|
12,939,782
|
|
$
|
4,348,078
|
|
$
|
3,130,675
|
|
||||||
|
Annual Performance Awards (as percentage of maximum)
|
98.1
|
%
|
79.2
|
%
|
90.6
|
%
|
100.0
|
%
|
85.3
|
%
|
100.0
|
%
|
||||||||||||
|
Vesting of Long-Term Performance Awards (as percentage of maximum)
|
100.8
|
%
|
66.3
|
%
|
93.5
|
%
|
87.5
|
%
|
—
|
%
|
—
|
%
|
||||||||||||
A-16
Director Compensation for the Year Ending
December 31, 2015
For
2015
, the nominating and corporation governance committee with respect to our non-executive directors and the compensation committee with respect to our executive director intend to apply our approved directors’ compensation policy as described below.
Executive Director
Salary
. For
2015
, the compensation committee increased our executive director’s salary by 2.5% to $2,050,000 in accordance with the directors’ compensation policy. This salary became effective on April 1, 2015. For additional information, see the
CD&A
under
Elements of Compensation Packages—Base Salary
on or about page 36 of the proxy statement.
Benefits
. Our executive director is eligible for participation in our aircraft policy, directors’ and officers’ insurance, indemnification (as provided in our articles of association and a deed of indemnity between Liberty Global and the executive director), gifts and for memberships in certain professional organizations. Our executive director is eligible for participation in other benefit plans and policies offered to salaried employees in the
U.S.
, including life insurance, health insurance, executive health plan and gym facilities. We offer a deferred compensation policy that permits our executive director to defer payment of his salary and annual bonus. In addition, we will pay for expenses related to business travel in accordance with our business expense policy.
Annual Cash Performance Award
.
In March
2015
, the compensation committee approved the individual performance goals and set the maximum achievable cash performance award for the executive director. For
2015
, the maximum achievable performance award for our executive director was increased from $8.0 million to $8.5 million pursuant to the terms of the
Fries Agreement
and in accordance with the directors’ compensation policy. The terms and financial metrics for this annual cash performance award are summarized in the
CD&A
under
Elements of Compensation Packages—Annual Cash Performance Awards
on or about page 37 of the proxy statement.
Equity Incentive Awards
. Also, in March
2015
, the compensation committee established a target annual equity value of
$15.0 million
for the executive director (which target value was unchanged from
2014
) and approved a grant of
2015 PSU
s for approximately two-thirds of that value. The remaining one-third of the value will be a grant of
SAR
s, which is expected to be made on or about May 1, 2015, when similar awards are made to officers and certain employees of our company. As the performance measure, the compensation committee selected growth in consolidated
OCF
, as adjusted for events such as acquisitions, dispositions and changes in foreign currency exchange rates and accounting principles or policies that affect comparability, for the two-year performance period.
The target
OCF CAGR
is subject to upward or downward adjustment for certain events in accordance with the terms of the grant agreement. The base performance objective set by the compensation committee is 50% of the target
OCF CAGR
, which for this purpose is subject to more limited adjustments. The base performance objective must be satisfied in order for the executive director to be eligible to earn any of his
2015 PSU
awards. The terms and financial metrics for the
2015 PSU
s are summarized in the
CD&A
. The target will be disclosed in full in our proxy statement for our annual general meeting following the end of the two-year performance period, with full details to the extent the target was met. In the case of the
2015 PSU
s, the disclosure will be included in the proxy statement for the 2017 annual general meeting. The design of the
2015 PSU
awards is based on the terms of the long-term incentive awards as set forth in the
CD&A
under
Elements of Compensation Packages—Equity Incentive Awards
on or about page 42 of the proxy statement.
Other than as stated above, no other changes are anticipated in
2015
with respect to the compensation of our executive director.
Non-executive Directors
The fees to be paid to our non-executive directors in
2015
will remain as stated our directors’ compensation policy, which is summarized in the proxy statement under
Executive Officers and Directors Compensation—Directors Compensation
. Similarly, the non-executive directors will receive an equity award grant on the date of the
AGM
as stated in
Executive Officers and Directors Compensation—Directors Compensation
of the proxy statement, except in the case of our chairman, who will receive his grant of options at the time the executive director receives his
SAR
award grant. Our directors are eligible for participation in our aircraft policy, directors’ and officers’ insurance, indemnification (as provided in our articles of association and deeds of indemnity between Liberty Global and each non-executive director), gifts and for memberships in certain professional organizations. We will also make available to our non-executive directors, when requested, health insurance under our health insurance policies. In accordance with our directors’ compensation policy, we will reimburse our chairman of the board for professional fees and other expenses incurred by him related to his ownership of our shares and in connection with his services as our chairman. For our non-executive directors, we offer a deferred compensation policy that permits our non-executive directors to defer payment of their fees and vesting of any
RSU
s. In addition, we will pay for expenses related to business travel, including guests when invited, in accordance with our business expense policy.
No changes are anticipated in
2015
with respect to the compensation of our non-executive directors.
A-17
Signed on behalf of the board of directors:
|
Bryan H. Hall
|
|
Executive Vice President, General Counsel and Secretary
|
|
April 27, 2015
|
|
Company registered number:
|
8379990
|
A-18
TABLE OF CONTENTS
PROXY STATEMENTVoting Matters and Board RecommendationsQUESTIONS AND ANSWERS ABOUT THE AGM AND VOTINGCORPORATE GOVERNANCEGovernance GuidelinesDirector IndependenceBoard Leadership StructureRisk OversightRisk Assessment of Compensation ProgramsCode of Business Conduct and Code of EthicsPolitical ContributionsShareholder Communication with DirectorsSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTSecurity Ownership of Certain Beneficial OwnersSecurity Ownership of ManagementChange in ControlSection 16(a) Beneficial Ownership Reporting ComplianceRESOLUTIONS 1, 2, 3 AND 4Vote and RecommendationNominees for Election of DirectorsDirectors Whose Term Expires 2016Directors Whose Term Expires 2017COMMITTEES OF THE BOARD OF DIRECTORS AND ATTENDANCEBoard MeetingsDirector Attendance at AGMsExecutive SessionsMANAGEMENT OF LIBERTY GLOBAL PLCExecutive OfficersInvolvement in Certain ProceedingsEXECUTIVE OFFICERS AND DIRECTORS COMPENSATIONExecutive SummaryCompensation Discussion and AnalysisCompensation Committee ReportSummary CompensationGrants of Plan-Based AwardsNarrative to Summary Compensation and Grants of Plan-Based Awards TablesOutstanding Equity Awards at Fiscal Year-EndOption Exercises and Shares VestedDeferred Compensation PlanEmployment and Other AgreementsAircraft PolicyPotential Payments upon Termination or Change in ControlDirector Compensation2014 Compensation of Liberty Global DirectorsRESOLUTION 5Vote and Recommendation