Liberty Global PLC (LBTYA) filed a Form 8K - Changes in Company
Executive Management - with the U.S Securities and Exchange
Commission on March 31, 2014.
(e) Compensatory Arrangements of Certain Officers
2014 Performance Awards. Pursuant to the Liberty Global 2014
Incentive Plan (the "Incentive Plan"), on March 31, 2014, the
Compensation Committee (the "Committee") of our Board of Directors
approved performance goals for the fiscal year ending December 31,
2014, for annual cash performance awards to our executive officers
(the "2014 Performance Awards").
With respect to our Chief Executive Officer and the four other
named executive officers of our company, who we currently
anticipate will be among our five most highly compensated executive
officers for fiscal 2014 (the "2014 NEOs"), a base objective
relating to growth in either consolidated revenue or consolidated
operating free cash flow (operating cash flow less property and
equipment additions) relative to budgeted growth has been designed
so that the payment of 2014 Performance Awards to the 2014 NEOs
will qualify as performance-based compensation under Section 162(m)
of the Internal Revenue Code of 1986, as amended ("Section 162m").
If the 2014 base objective is achieved, the Committee may approve
payment to each of the 2014 NEOs of his maximum 2014 Performance
Award, subject to the Committee's discretion to reduce the amount
of the award to be paid to any 2014 NEO or to pay no award to such
2014 NEO. The exercise of the Committee's discretion as to the
amount of the 2014 Performance Award payable to any 2014 NEO will
be based on the Committee's assessment of our company's
consolidated financial performance and the executive's performance
against individual goals in 2014. The maximum 2014 Performance
Award is $8.0 million for our Chief Executive Officer, Michael T.
Fries, and $2.5 million for each other 2014 NEOs. These same terms
will also apply to other officers granted 2014 Performance
Awards.
The individual goals for the 2014 NEOs and our other officers
consist of qualitative measures, which include individual
strategic, financial, transactional, organizational and/or
operational goals for each officer.
2014 PSU Awards. As previously reported, the approach that the
Committee has adopted to the equity incentive award component of
our executive officers' compensation packages is 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
performance-based restricted share units ("PSUs") and approximately
one-third in the form of an annual award of share appreciation
rights ("SARs"). A similar approach is applied to the equity
incentive compensation for other key employees.
Each year's award of PSUs has a two-year performance period. The
percentage of the PSU award earned during the relevant performance
period is subject to vesting in two equal installments on March 31
and September 30 of the year following the end of the performance
period. Each year's award of SARs is made at the same time as
awards are made under our annual equity grant program for employees
and on terms consistent with our standard form of SAR award
agreement.
Also on March 31, 2014, the Committee approved the target annual
equity values from 2013 and the grant of an aggregate of 814,080
PSUs (the "2014 PSUs") pursuant to the Incentive Plan for our
executive officers, including our NEOs. The 2014 PSUs will be
divided with one-third as Class A PSUs and two-thirds as Class C
PSUs. Each 2014 PSU represents the right to receive one share of
Class A ordinary shares or Class C ordinary shares, as applicable,
subject to performance and vesting. The final determination of the
2014 PSU awards for the other key employees has not yet been
made.
The new target annual equity values and the grants of the 2014
PSUs for our 2014 NEOs are set forth in the table below:
Two-thirds of Target
Annual Equity Value in the Form of:
Name and Position Target Annual Equity Value Class A 2014
PSU Grant Class C 2014
PSU Grant
Michael T. Fries; President, Chief Executive Officer
$15,000,000
78,276 156,562
Charles H.R. Bracken; Executive Vice President & Co-Chief
Financial Officer (Principal Financial Officer)
$5,000,000
26,092 52,184
Bernard G. Dvorak; Executive Vice President & Co-Chief
Financial Officer (Principal Accounting Officer)
$5,000,000
26,092 52,184
Diederik Karsten; Executive Vice President, European Broadband
Operations
$5,000,000
26,092 52,184
Balan Nair; Executive Vice President & Chief Technology
Officer
$5,000,000
26,092 52,184
The performance period for the 2014 PSUs ends on December 31,
2015. As the performance measure, the Committee selected growth in
consolidated operating cash flow (revenue less operating, selling,
general and administrative expenses, excluding depreciation and
amortization, stock-based compensation, provisions for litigation,
and impairment, restructuring and other operating charges or
credits), as adjusted for events such as acquisitions, dispositions
and changes in foreign currency exchange rates and accounting
principles or policies that affect comparability. In choosing
operating cash flow as the performance measure for the 2014 PSUs,
the Committee determined to use a measure of performance that was
different from those selected for the 2014 Performance Awards
(i.e., revenue and operating free cash flow) in order to ensure
that the management team would be focused on maximizing performance
against a variety of key financial metrics during the performance
period. The target compound annual growth rate in consolidated
operating cash flow ("OCF CAGR") selected by the Committee was
based upon a comparison of our 2013 actual results to those
reflected in our long-range plan for 2015. The target OCF CAGR is
subject to upward or downward adjustment for certain events in
accordance with the terms of the grant agreement. A performance
range of 75% to 125% of the target OCF CAGR would generally result
in award recipients earning 75% to 150% of their target 2014 PSUs,
subject to reduction or forfeiture based on individual performance.
One-half of the earned 2014 PSUs will vest on March 31, 2016 and
the balance on September 30, 2016. The Committee also established a
minimum OCF CAGR base performance objective, subject to certain
limited adjustments, which must be satisfied in order for named
executive officers to be eligible to earn any of their 2014 PSUs.
The base performance objective was designed so that the awards
would qualify as performance-based compensation under Section
162(m). If the base performance objective is achieved, our named
executive officers will be eligible to earn 150% of their 2014
PSUs, subject to the committee's discretion to reduce the size of
the award earned, including to zero, to align with our company's
and the individual's performance.
The 2014 PSUs are subject to forfeiture or acceleration in
connection with certain termination of employment or
change-in-control events consistent with the terms of the PSUs
granted in 2013. The 2014 PSUs will convert to time-vested
restricted share units following certain change-in-control
events.
The full text of this SEC filing can be retrieved at:
http://www.sec.gov/Archives/edgar/data/1570585/000157058514000070/a8-kitem502performanceawar.htm
Any exhibits and associated documents for this SEC filing can be
retrieved at:
http://www.sec.gov/Archives/edgar/data/1570585/000157058514000070/0001570585-14-000070-index.htm
Public companies must file a Form 8-K, or current report, with
the SEC generally within four days of any event that could
materially affect a company's financial position or the value of
its shares.
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