Cable One, Inc. (NYSE:CABO) Files An 8-K Entry into a Material Definitive Agreement

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Cable One, Inc. (NYSE:CABO) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement.

Amended and Restated Credit Agreement
On May 1, 2017 (the Closing Date), Cable One, Inc. (the Company)
and its wholly owned subsidiary, Cable One VoIP, LLC, entered
into that certain Restatement Agreement (Restatement Agreement),
with JPMorgan Chase Bank, N.A. (JPMorgan), as administrative
agent, and the lenders party thereto, to amend and restate that
certain Credit Agreement, dated as of June 30, 2015, as amended
by Amendment No. 1, dated as of February 13, 2017, among the
Company, JPMorgan, as administrative agent, and the lenders party
thereto (the Existing Credit Agreement and, as amended and
restated by the Restatement Agreement, the Amended and Restated
Credit Agreement). The Existing Credit Agreement was previously
filed with the Securities and Exchange Commission (the SEC) as
Exhibit 10.1 to the Current Report on Form 8-K filed by the
Company on July 1, 2015, and Amendment No. 1 thereto was
previously filed with the SEC as Exhibit 10.1 to the Current
Report on Form 8-K filed by the Company on February 14, 2017.
The Restatement Agreement provided for (a) an incremental term A
loan in an aggregate principal amount of $250 million (the
Incremental Term Loan A) and (b) an incremental term B loan in an
aggregate principal amount of $500 million (the Incremental Term
Loan B and, together with the Incremental Term Loan A, the
Incremental Loans). The Incremental Loans were used, together
with cash on hand of the Company, to (i) fund the purchase price
payable in connection with the Companys acquisition (the
Acquisition) of RBI Holding LLC (NewWave), a portfolio company of
GTCR LLC, a leading private equity firm based in Chicago (GTCR),
(ii) to repay certain outstanding indebtedness of NewWave and its
subsidiaries in connection with the Acquisition, (iii) to repay
in full the Companys existing term A loans and (iv) to pay fees
and expenses incurred in connection with the foregoing.
The Incremental Loans are obligations of the Company and are
guaranteed by the Companys wholly owned subsidiaries, including
the subsidiaries acquired in the Acquisition. The Incremental
Loans are secured, subject to certain exceptions, by
substantially all of the assets of the Company and the
guarantors.
The Incremental Term Loan A will mature on the fifth anniversary
of the Closing Date. The Incremental Term Loan A may be prepaid
at any time without premium. The Incremental Term Loan A will
bear interest, at the Companys option, at a rate per annum
determined by reference to either the London Interbank Offered
Rate (LIBOR) or an adjusted base rate, in each case plus an
applicable interest rate margin. The applicable interest margin
rate for the Incremental Term Loan A with respect to LIBOR
borrowings will be a rate per annum between 2.25% and 1.50% and
with respect to adjusted base rate borrowings will be a rate per
annum between 1.25% and 0.50%, in each case determined on a
quarterly basis by reference to a pricing grid based upon the
Companys total net leverage ratio. The Incremental Term Loan A
will amortize in equal quarterly installments at a rate
(expressed as a percentage of the original principal amount) of
2.5% per annum for the first year following the Closing Date,
5.0% per annum for the second year following the Closing Date,
7.5% per annum for the third year following the Closing Date and
10.0% per annum for the fourth and fifth years following the
Closing Date, with the balance due upon maturity of the
Incremental Term Loan A.
The Incremental Term Loan B will mature on seventh anniversary of
the Closing Date. The Incremental Term Loan B is subject to a 1%
prepayment premium if it is prepaid within six months of the
Closing Date and may be prepaid without penalty at any time after
the six-month anniversary of the Closing Date and benefits from
certain most favored nation pricing protections. The Incremental
Term Loan B will bear interest, at the Companys option, at a rate
per annum determined by reference to either LIBOR or an adjusted
base rate, in each case plus an applicable interest rate margin.
The applicable interest margin rate for the Incremental Term Loan
B with respect to LIBOR borrowings will be LIBOR plus 2.25% and
with respect to adjusted base rate borrowings will be the
adjusted base rate plus 1.25%. The Incremental Term Loan B will
amortize in equal quarterly installments at a rate (expressed as
a percentage of the original principal amount) of 1.0% per annum,
with the balance due upon maturity of the Incremental Term Loan
B.
Other than with respect to maturity, amortization, prepayment,
premiums and pricing, the Incremental Loans contain terms that
are substantially similar to the Companys existing term loans
under the Amended and Restated Credit Agreement. In addition, the
Incremental Term Loan B does not benefit from the financial
maintenance covenants under the Amended and Restated Credit
Agreement.
The foregoing description of the Restatement Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the Restatement Agreement, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated by reference herein.
Supplemental Indenture
On May 1, 2017, the Company, the Companys newly acquired
subsidiaries, Avenue Broadband Communications LLC,
Telecommunications Management, LLC, and Ultra Communications
Group, LLC, (the New Guarantors) and The Bank of New York Mellon
Trust Company, N.A., as trustee (the Trustee), entered into a
First Supplemental Indenture, which supplements that certain
Indenture dated as of June 17, 2015, between the Company, the
guarantors party thereto and the Trustee (the Indenture)
governing the Companys 5.750% Senior Notes due 2022 (the Notes).
The First Supplemental Indenture adds the New Guarantors as
parties to the Indenture and as Guarantors (as defined in the
Indenture) of the Notes. In accordance with the First
Supplemental Indenture, the New Guarantors, along with the
existing guarantor under the Indenture, will jointly and
severally guarantee the obligations of the Company with respect
to the Notes to the terms of the Indenture.
The foregoing description of the First Supplemental Indenture
does not purport to be complete and is qualified in its entirety
by reference to the full text of the First Supplemental
Indenture, which is filed as Exhibit 4.1 to this Current Report
on Form 8-K and incorporated by reference herein.
Item 2.01. Completion of Acquisition or Disposition of Assets.
As previously disclosed in the Current Report on Form 8-K filed
by the Company with the SEC on January 18, 2017, the Company
entered into an Agreement and Plan of Merger, dated as of January
17, 2017 (the Merger Agreement), to acquire NewWave from funds
affiliated with GTCR. On May 1, 2017, the Company completed the
Acquisition and NewWave became a wholly owned subsidiary of the
Company. The Company paid a purchase price of $735 million in
cash, on a debt-free, cash-free basis and subject to customary
post-closing adjustments.
The foregoing description of the Merger Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the Merger Agreement, which was
filed as Exhibit 2.1 to the Current Report on Form 8-K/A filed by
the Company with the SEC on January 20, 2017 and is incorporated
by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The disclosure set forth above under Item 1.01 is incorporated by
reference into this Item 2.03.
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Appointment of Chief Operating Officer
On May 2, 2017, the Board of Directors (the Board) appointed
Michael E. Bowker, the current Senior Vice President, Chief Sales
and Marketing Officer of the Company, as Chief Operating Officer
of the Company. In connection with Mr. Bowkers promotion to Chief
Operating Officer, effective May 8, 2017, his annual base salary
was increased to $350,000, and his target annual cash incentive
award with respect to fiscal year 2017 was increased to 75% of
his annual base salary, or $262,500, subject to pro-ration based
on the effective date of his appointment. The other material
plans and arrangements in which Mr. Bowker participates are
disclosed in the Companys 2017 Proxy Statement, as filed with the
SEC on March 28, 2017 (the Proxy Statement). Information about
Mr. Bowker, his service with the Company and his business
experience more generally was previously disclosed in the
Companys Annual Report on Form 10-K, as filed with the SEC on
March 1, 2017.
There is no other arrangement or understanding between Mr. Bowker
or any other person to which he was selected as Chief Operating
Officer. There are no family relationships among any of the
Companys directors or executive officers. Mr. Bowker has not had
an interest in any transaction since the beginning of the
Companys last fiscal year, or any currently proposed transaction,
that requires disclosure to Item 404(a) of Regulation S-K.
Amended and Restated 2015 Omnibus Incentive Compensation Plan
On May 2, 2017, at the Companys 2017 Annual Meeting of
Stockholders (the 2017 Annual Meeting), the Companys stockholders
approved the Amended and Restated Cable One, Inc. 2015 Omnibus
Incentive Compensation (the Plan). The Board had previously
adopted the Plan, subject to stockholder approval. A description
of the Plan is set forth in the 2017 Proxy Statement under the
caption Proposal No. 5: Approval of the Amended and Restated 2015
Omnibus Incentive Compensation Plan, and is incorporated by
reference herein. The description of the Plan does not purport to
be complete and is qualified in its entirety by reference to the
full text of the Plan, which was included as Annex B to the 2017
Proxy Statement and incorporated by reference herein.
Item 5.07. Submission of Matters to a Vote of Security Holders.
On May 2, 2017, the Company held its 2017 Annual Meeting. The
following is a summary of the final voting results for each
matter presented to stockholders.
Proposal No. 1: Election of Directors
The Companys stockholders elected the two director nominees, each
to hold office until the 2020 Annual Meeting of Stockholders and
until his respective successor is elected and qualified, as set
forth below:
For
Against
Abstain
Broker Non-Votes
Alan G. Spoon
3,826,467 1,040,854 2,251 416,026
Wallace R. Weitz
4,183,856 682,754 2,962 416,026
Proposal No. 2: Ratification of the Appointment of the
Independent Registered Public Accounting Firm
The Companys stockholders ratified the appointment of
PricewaterhouseCoopers LLP as the Companys independent registered
public accounting firm for the year ending December 31, 2017, as
set forth below:
For
Against
Abstain
Broker Non-Votes
5,268,071 17,016
N/A
Proposal No. 3: Advisory Vote to Approve Compensation of Named
Executive Officers for 2016
The Companys stockholders approved, on an advisory basis, the
compensation of the Companys named executive officers for 2016,
as set forth below:
For
Against
Abstain
Broker Non-Votes
4,800,654 24,161 44,757 416,026
Proposal No. 4: Advisory Vote on the Frequency of Future Advisory
Votes on Named Executive Officer Compensation
The Companys stockholders preferred the option of every one year
as the frequency with which stockholders are provided an advisory
vote on named executive officer compensation, as set forth below:
One Year
Two Years
Three Years
Abstain
Broker Non-Votes
4,386,234 478,443 4,367 416,026
Based upon the results of the advisory vote and in accordance
with the unanimous recommendation of the Board in the 2017 Proxy
Statement, on May 2, 2017, the Board determined to hold an
advisory vote on the compensation of the Companys named executive
officers every year, until the next required vote on the
frequency of future non-binding advisory votes on the
compensation of the Companys named executive officers.
Proposal No. 5: Approval of the Amended and Restated Cable One,
Inc. 2015 Omnibus Incentive Compensation Plan
The Companys stockholders approved the Plan, as set forth below:
For
Against
Abstain
Broker Non-Votes
4,756,083 69,830 43,659 416,026
Item 7.01. Regulation FD Disclosure.
On May 1, 2017, the Company issued a press release announcing the
completion of the Acquisition. A copy of this press release is
furnished as Exhibit 99.1 hereto.
On May 3, 2017, the Company issued a press release announcing the
appointment of Mr. Bowker as Chief Operating Officer. A copy of
this press release is furnished as Exhibit 99.2 hereto.
The information contained in this Item 7.01 and in Exhibits 99.1
and 99.2 is furnished and shall not be deemed to be filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the Exchange Act), or otherwise subject to the
liabilities of that section, and such information shall not be
deemed to be incorporated by reference into any of the Companys
filings under the Securities Act of 1933, as amended, or the
Exchange Act.
Item 8.01. Other Items.
Effective May 2, 2017, the Board approved a new Non-Employee
Director Compensation Program (the Program). The Program is
comprised of the following components:
Cash Compensation
Under the Program, each non-employee director will receive
$75,000 per year as an annual cash retainer for his or her
service on the Board. In addition, non-employee directors will
receive additional cash retainers for the following roles:
The Lead Independent Director will receive $30,000 per
year;
The Chair of the Audit Committee will receive $15,000 per
year;
The Chair of the Compensation Committee will receive
$10,000 per year;
The Chair of the Executive Committee will receive $10,000
per year (only if the chair is a non-employee director
other than the Lead Independent Director); and
The Chair of the Nominating and Governance Committee will
receive $5,000 per year (only if the chair is a
non-employee director other than the Lead Independent
Director).
Equity Compensation
Under the Program, each non-employee director will receive an
annual equity award grant in the form of restricted stock unit
(RSU) awards under the Plan with a grant-date fair value of
approximately $125,000. The RSUs will generally vest on the first
anniversary of the grant date, subject to the directors continued
service through such date and will be subject to the terms and
conditions of the Plan and the applicable award agreement, a form
of which was approved by the Board on May 2, 2017 (the Director
RSU Agreement). The foregoing description of the Director RSU
Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the Director RSU
Agreement, which is filed as Exhibit 10.3 to this Current Report
on Form 8-K and incorporated by reference herein.
Stock Ownership Guidelines
In addition, the Board amended the Companys stock ownership
guidelines for non-employee directors, increasing the required
stock ownership level from a multiple of 1.5 times the annual
equity retainer ($225,000) to a multiple of five times the annual
cash retainer ($375,000), which each non-employee director is
expected to achieve within a five-year compliance period of the
later of the date of initial adoption of the guidelines, which
was August 4, 2015, or the date of the non-employee directors
initial election to the Board.
Item 9.01. Financial Statements and Exhibits.
(a)
Financial statements of business acquired.
The financial statements required by Item 9.01(a) of Form 8-K in
connection with the Acquisition will be filed by amendment to
this Current Report on Form 8-K within 71 calendar days after the
date this Current Report on Form 8-K was required to be filed
with the SEC.
(b)
Pro forma financial information.
The pro forma financial information required by Item 9.01(b) of
Form 8-K in connection with the Acquisition will be filed by
amendment to this Current Report on Form 8-K within 71 calendar
days after the date this Current Report on Form 8-K was required
to be filed with the SEC.
Exhibit
Description
2.1
Agreement and Plan of Merger, dated as of January 17, 2017,
by and among Cable One, Inc., RBI Holding LLC, Frequency
Merger Sub, LLC, RBI Blocker Corp., RBI Blocker Holdings
LLC, and GTCR-RBI, LLC, solely in its capacity as the
equityholder representative (incorporated by reference to
Exhibit 2.1 to the Companys Current Report on Form 8-K/A
filed on January 20, 2017).*
4.1
First Supplemental Indenture, dated as of May 1, 2017,
among Cable One, Inc., Avenue Broadband Communications LLC,
Telecommunications Management, LLC, Ultra Communications
Group, LLC, and The Bank of New York Mellon Trust Company,
N.A., as trustee.
10.1
Restatement Agreement, dated as of May 1, 2017, among Cable
One, Inc., Cable One VoIP, LLC, JPMorgan Chase Bank, N.A.,
as administrative agent, and the lenders party thereto.
10.2
Amended and Restated Cable One, Inc. 2015 Omnibus Incentive
Compensation Plan (incorporated by reference from Annex B
to the Companys 2017 Proxy Statement filed on March 28,
2017).
10.3
Form of Non-Employee Director Restricted Stock Unit
Agreement.
99.1
Press release issued by Cable One, Inc. on May 1, 2017.
99.2
Press release issued by Cable One, Inc. on May 3, 2017.
__________
* to Item 601(b)(2) of Regulation S-K, certain exhibits and
schedules have been omitted. The registrant hereby agrees to
furnish supplementally a copy of any omitted attachment to the
SEC upon request.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Cable One, Inc.
By:
/s/ Alan H. Silverman
Name:
Alan H. Silverman
Title:
Senior Vice President, General
Counsel and Secretary
Date: May 4, 2017
EXHIBIT INDEX
Exhibit
Description
2.1
Agreement and Plan of Merger, dated as of January 17, 2017,
by and among Cable One, Inc., RBI Holding LLC, Frequency
Merger Sub, LLC, RBI Blocker Corp., RBI Blocker Holdings
LLC, and GTCR-RBI, LLC, solely in its capacity as the
equityholder representative (incorporated by reference from
Exhibit 2.1 to the Companys Current Report on Form 8-K/A
filed on January 20, 2017).*
4.1
First Supplemental Indenture, dated as of May 1, 2017,
among Cable One, Inc., Avenue Broadband Communications LLC,
Telecommunications Management, LLC, Ultra Communications
Group, LLC, and The Bank of New York Mellon Trust Company,
N.A., as trustee.
10.1
Restatement Agreement, dated as of May 1, 2017, among Cable
One, Inc., Cable One VoIP, LLC, JPMorgan Chase Bank, N.A.,
as administrative agent, and the lenders party thereto.
10.2
Amended and Restated Cable One, Inc. 2015 Omnibus Incentive
Compensation Plan (incorporated by reference from Annex B
to the Companys 2017 Proxy Statement filed on March 28,
2017).
10.3
Form of Non-Employee Director Restricted Stock Unit
Agreement.
99.1
Press release issued by Cable One, Inc. on May 1, 2017.
99.2
Press release issued by Cable One, Inc. on May 3, 2017.
__________
*


About Cable One, Inc. (NYSE:CABO)

Cable One, Inc. is a provider of data, video and voice services in approximately 20 Western, Midwestern and Southern states. The Company’s products include Residential Video Services, Residential Data Services, Residential Voice Services, Business Services and Advertising. It provides these broadband services to residential and business customers in approximately 40 cable systems covering over 400 cities and towns. The markets it serves are non-metropolitan, secondary markets, with its customers located in approximately five states: Mississippi, Idaho, Oklahoma, Texas and Arizona. The Company is the cable system operator in the United States making services available to approximately 1,644,000 homes in the United States. It provides service to approximately 664,600 residential and business customers out of over 1,644,000 homes passed. Of these customers, approximately 501,240 subscribed to data services, over 364,150 to video services and approximately 127,090 to voice services.

Cable One, Inc. (NYSE:CABO) Recent Trading Information

Cable One, Inc. (NYSE:CABO) closed its last trading session down -8.00 at 664.55 with 46,819 shares trading hands.