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TABLE OF CONTENTS
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant ý |
Filed by a Party other than the Registrant o |
Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12
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HAWAIIAN TELCOM HOLDCO, INC. |
(Name of Registrant as Specified In Its Charter) |
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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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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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials. |
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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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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Hawaiian Telcom Holdco, Inc.
P.O. Box 2200
Honolulu, HI 96841
March 23, 2015
Dear
Stockholder:
You
are cordially invited to attend the Annual Meeting of Stockholders of Hawaiian Telcom Holdco, Inc. to be held on Friday, May 1, 2015 at 8:00 a.m. at our
headquarters at 1177 Bishop Street, Honolulu, Hawaii 96813.
The
Secretary's formal notice of the meeting and the Proxy Statement appear on the following pages and describe the matters to be acted upon at the Annual Meeting. You also will have the
opportunity to hear an update on certain aspects of our business that have occurred in the past year.
Whether
or not you plan to attend the Annual Meeting, please vote your shares as soon as possible so that your vote will be counted.
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Sincerely, |
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/s/ ERIC K. YEAMAN
Eric K. Yeaman President and Chief Executive Officer |
Table of Contents
Hawaiian Telcom Holdco, Inc.
P.O. Box 2200
Honolulu, HI 96841
March 23, 2015
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Hawaiian Telcom Holdco, Inc. will hold its Annual Meeting of Stockholders on Friday, May 1, 2015 at 8:00 a.m. H.S.T. at our headquarters at
1177 Bishop Street, Honolulu, Hawaii 96813.
The
Annual Meeting is being held for the following purposes:
- 1.
- To
elect seven directors to serve until the next Annual Meeting of Stockholders or until their successors have been duly elected and qualified;
- 2.
- To
approve Amended and Restated Bylaws to increase the maximum number of directors that may constitute our Board of Directors from seven to nine and to
clarify that the number of directors within the specified range that constitute the Board is determined by resolution of the Board of Directors;
- 3.
- To
ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2015; and
- 4.
- To
transact any other business that properly comes before the meeting and any adjournment or postponement thereof.
The
Board of Directors has selected March 13, 2015 as the record date for determining stockholders entitled to vote at the Annual Meeting. A list of stockholders as of that date
will be available for inspection during ordinary business hours at our headquarters at 1177 Bishop Street, Honolulu, Hawaii 96813 for ten days before the Annual Meeting.
Pursuant
to rules promulgated by the Securities and Exchange Commission, we have elected to provide access to our proxy materials by sending you this full set of proxy materials,
including a proxy card, and by notifying you of the availability of our proxy materials on the Internet. This Proxy Statement and our 2015 Annual Report to Stockholders are available at
http://ir.hawaiiantel.com.
Whether
or not you plan to attend the Annual Meeting, please vote your shares as soon as possible in accordance with the instructions provided to you, to ensure that your vote is counted
at the Annual Meeting.
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By Order of the Board of Directors, |
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/s/ SEAN K. CLARK
Sean K. Clark Secretary |
Table of Contents
HAWAIIAN TELCOM HOLDCO, INC.
2015 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
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PROXY STATEMENT
GENERAL INFORMATION
- Q:
- Who is soliciting my proxy?
- A:
- The
Board of Directors (the "Board") of Hawaiian Telcom Holdco, Inc. ("we," "us" or the "Company") is sending you this Proxy Statement in connection
with the Board's solicitation of proxies for use at the 2015 Annual Meeting of Stockholders or any adjournment or postponement thereof (the "Annual Meeting"). Certain of our directors, officers and
employees may also solicit proxies on the Board's behalf by mail, telephone, email, facsimile transmission, or in person.
- Q:
- Who is paying for this solicitation and what are the means of solicitation?
- A:
- We
will pay for this solicitation of proxies. Solicitation of proxies may be made by means of personal calls upon, or telephonic, facsimile or electronic
communications with, stockholders or their personal representatives by our directors, officers and employees. Our directors, officers and employees will not receive additional remuneration. We will
reimburse banks, brokers, custodians, nominees and fiduciaries for their reasonable charges and expenses to forward our proxy materials to the beneficial owners of our common stock.
- Q:
- What am I voting on?
- A:
- You
will be voting on three proposals:
Proposal
No. 1 is for the election of seven directors.
Proposal
No. 2 is to approve Amended and Restated Bylaws to increase the maximum number of directors that may constitute our Board of Directors from seven to nine and to clarify that the number
of directors within the specified range that constitute the Board is determined by resolution of the Board of Directors, as described in this Proxy Statement.
Proposal
No. 3 is for the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year ending December 31,
2015.
- Q:
- Who can vote?
- A:
- Only
our stockholders of record at the close of business on March 13, 2015 may vote. Each share of common stock outstanding on that date is entitled
to one vote on all matters to come before the meeting.
- Q:
- How do I vote and how do I revoke my proxy?
- A:
- If
you hold your shares in your own name as a stockholder of record (i.e., your shares are registered directly in your name with American Stock
Transfer & Trust Company, LLC, our stock transfer agent), you may vote your shares either by proxy or in person at the meeting. To vote in person, please bring a form of identification,
such as a valid driver's license or passport, and proof that you are a stockholder of record as of March 13, 2015, and we will give you a ballot when you arrive. To vote by proxy, please vote
in one of the following ways:
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- Via the Internet. You may vote through the Internet by
following the instructions on the proxy card.
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- By Telephone. You may vote by touchtone telephone by
following the instructions on the proxy card.
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- By Mail. You may vote by mail by marking, dating, signing
and mailing the proxy card in the envelope provided.
Voting
by proxy will not affect your right to vote your shares in personby voting in person you automatically revoke your proxy. You also may revoke your proxy at any time before the
applicable voting deadline by giving our Secretary written notice of your revocation, by submitting a later-dated proxy card or by voting again using the telephone or Internet (your latest telephone
or Internet proxy is the one that will be counted). If your shares are registered in "street name" (i.e., held in a brokerage account or by a bank or other nominee), you will receive a voting
instruction card or other information from your broker or other holder of record seeking instruction regarding how to vote your shares. If you do not provide such instruction, your broker or nominee
may vote your shares at its discretion on your behalf on the ratification of the selection of the Company's independent registered public accounting firm for fiscal year 2015, but not on the other
proposals.
- Q:
- What is the deadline for submitting a proxy?
- A:
- Telephone
and Internet voting facilities for stockholders of record will be available 24 hours a day. In order to be counted, proxies submitted by
telephone or the Internet must be received at the Company's headquarters by 11:59 p.m. Eastern Time on April 30, 2015. Proxies submitted by mail must be received prior to the start of
the Annual Meeting.
- Q:
- What constitutes a quorum?
- A:
- On
the record date, we had [10,685,592] shares of common stock, $0.01 par value, outstanding. Voting can take place at the Annual
Meeting only if stockholders owning a majority of the issued and outstanding stock entitled to vote at the Annual Meeting are present in person or represented by proxy.
- Q:
- What are abstentions and broker non-votes and how do they affect voting?
- A:
- AbstentionsIf you specify that you wish to "abstain" from voting on an
item, your shares will not be voted on that particular item. Abstentions are counted toward establishing a quorum and included in the shares entitled to vote on Proposal Nos. 2 and 3. On
Proposal Nos. 2 and 3, abstentions have the effect of a vote against the proposal.
Broker Non-VotesIf your broker holds your shares in its name and does not receive voting instructions from you, your broker may only vote
these shares on certain "routine" matters, such as the ratification of the selection of the Company's independent registered public accounting firm. However, on non-routine matters, such as the
election of directors and the approval of the Amended and Restated Bylaws, your broker cannot vote your shares unless it has received voting instructions from you, as it does not have discretionary
voting power for those particular items. So long as the broker has discretion to vote on at least one proposal, which your broker will have by virtue of the routine matter on this year's ballot, these
"broker non-votes" are counted toward establishing a quorum. Because directors are elected by a plurality of the votes cast, broker non-votes will not affect the outcome of the election of directors.
However, on Proposal No. 2, the approval of the Amended and Restated Bylaws, which requires the approval of a majority of the total issued and outstanding stock entitled to vote, a broker
non-vote will have the effect of a "no" vote.
- Q:
- What dissenter's rights of appraisal do I have?
- A:
- There
are no dissenters' rights of appraisal with respect to the matters to be acted upon at the Annual Meeting.
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- Q:
- What vote is needed?
- A:
- For
Proposal No. 1, the directors will be elected by a plurality of the votes cast.
For
Proposal No. 2, an affirmative vote of the majority of all issued and outstanding shares entitled to vote is required to approve the Amended and Restated Bylaws.
For
Proposal No. 3, an affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on Proposal No. 3 is required to
approve the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015.
- Q:
- How do I contact the Board?
- A:
- You
can send written communications to our Board or any individual director addressed to:
Board
of Directors
c/o Secretary
Hawaiian Telcom Holdco, Inc.
P.O. Box 2200
Honolulu, HI 96841
Our
Secretary will then direct such communications to the appropriate director(s), except for solicitations or other matters unrelated to us.
- Q:
- How can I nominate director candidates?
- A:
- Please
refer to the Section captioned "Election of Directors" and the Section captioned "Stockholder Proposals for the 2016 Annual Meeting" in this Proxy
Statement.
- Q:
- What is householding?
- A:
- Householding
is a procedure approved by the SEC that provides for the delivery of only one copy of our proxy materials to stockholders residing at the same
address, unless the stockholders have notified us of their desire to receive multiple copies. This procedure is known as "householding" and is intended to reduce our printing costs and postage fees.
Stockholders who participate in householding will continue to receive separate proxy cards. We will promptly deliver, upon request, a separate copy of the Proxy Statement to any stockholder residing
at an address at which only one copy was mailed. Requests should be addressed to Investor Relations at our principal executive offices. If you are a beneficial stockholder and own your shares through
a bank or broker, please contact your bank or broker to request additional copies.
- Q:
- Can I access the proxy materials on the Internet?
- A:
- The
proxy materials are available online at http://ir.hawaiiantel.com. At this website, you will find directions as to how you may access and review all of
the important information you need. These proxy materials are free of charge.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Annual Meeting, directors will be elected to serve until the next Annual Meeting of Stockholders and until their successors are
duly elected and qualified. The individuals named as proxy holders will vote your proxy for the election of the seven nominees unless you direct them to withhold your vote. If any nominee becomes
unable to serve as a director before the Annual Meeting (or decides not to serve), the individuals named as proxy holders may vote for a substitute. There is no cumulative voting in the election of
directors.
Our
Nominating and Governance Committee is charged with identifying, evaluating, and recommending to the Board candidates for election to the Board or for appointment by the Board to
fill a vacancy. The Nominating and Governance Committee seeks individuals with, among other things, knowledge of our industry and technologies, business management and financial oversight experience,
and reputation in the industry and community. While we do not have a formal diversity policy for Board membership, we look for potential candidates that help ensure that the Board has the benefit of a
wide range of knowledge and experience. We believe that our directors should represent the interests of our stockholders, be committed to enhancing stockholder value, and have sufficient available
time to diligently perform their duties. The Nominating and Governance Committee will consider director candidates recommended by security holders, applying the same evaluation criteria described
above. Any recommendation must be received by the Nominating and Governance Committee, c/o Secretary, Hawaiian Telcom Holdco, Inc., P.O. Box 2200, Honolulu, HI 96841, no earlier
than January 7, 2016, and no later than February 6, 2016, for consideration for the 2016 Annual Meeting, and must include a resume and other written information supporting the nominee's
qualifications to serve on the Board, a statement signed by the nominee confirming the nominee's willingness to serve as a director, and evidence of the security holder's ownership of our common
stock. Stockholders who wish to nominate directors for election must also comply with the advance notice provisions of our current Amended and Restated Bylaws (the "Bylaws") as described in
"Stockholder Proposals for the 2016 Annual Meeting" below.
Nominees for Directors
Each of the current directors has been nominated for election by the Board upon recommendation by the Nominating and Governance
Committee and has decided to stand for election. Set forth below are the names and ages of these nominees, the years they became directors, their principal occupations or employment for at least the
past five years, and the names of other public companies for which they serve as a director or have served as a director during at least the past five years. Also set forth are the specific
experience, qualifications, attributes, and skills that led our Nominating and Governance Committee and Board to conclude that they should serve as directors.
The
following table provides information regarding directors as of March 1, 2015:
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Name
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Age |
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Position(s) |
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Director
Since |
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Kurt M. Cellar(1)(2) |
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45 |
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Director |
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2010 |
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Walter A. Dods, Jr.(2)(3)(4) |
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73 |
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Director |
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2005 |
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Warren H. Haruki(3)(5) |
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62 |
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Director |
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2010 |
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Richard A. Jalkut(2)(5) |
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70 |
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Director |
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2010 |
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Steven C. Oldham(1)(5) |
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64 |
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Director |
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2010 |
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Bernard R. Phillips III(1)(3) |
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62 |
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Director |
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2010 |
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Eric K. Yeaman(5) |
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47 |
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President, Chief Executive Officer and Director |
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2008 |
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- (1)
- Member
of the Audit Committee.
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- (2)
- Member
of the Nominating and Governance Committee.
- (3)
- Member
of the Compensation Committee.
- (4)
- Served
as a Director from May 2, 2005 until October 28, 2010, and since December 9, 2010.
- (5)
- Member
of the Executive Committee.
Kurt M. Cellar is President of Corner Pocket Investors, Inc. and has been a consultant to companies in the telecommunications,
retail and insurance industries since January 2008. He previously had been a Partner and Portfolio Manager of Bay Harbour Management L.C., a hedge fund, from 1999 until
January 2008. He currently serves on the Boards of Directors of Angiotech Pharmaceuticals, Inc., Horizon Lines, Inc., Six Flags Entertainment Corporation, and U.S. Concrete, Inc.
Mr. Cellar is a Chartered Financial Analyst. Mr. Cellar has extensive experience in telecommunications, both as an investor and a board member, as well as significant financial analysis
experience. He has chaired audit and compensation committees of other companies and has been designated by the Board as an "audit committee financial expert."
Walter A. Dods, Jr. became a Director on December 9, 2010, having previously served as a Director from May 2, 2005 until
October 28, 2010 (Chairman of the Board from May 8, 2008 until October 28, 2010). Mr. Dods was the non-executive Chairman of the Board of BancWest Corporation, a
$74 billion bank holding company wholly-owned by BNP Paribas based in Honolulu, Hawaii, from January 2005 through December 2007, and a director since 1983. He also has been the non-executive
Chairman of the Board of First Hawaiian Bank from January 2005 until December 2008 and a director since 1979, as well as Vice Chairman of Bank of the West since 1998. First Hawaiian Bank and Bank of
the West are subsidiaries of BancWest, Corporation. From 1996 to 1997, Mr. Dods served as the National President of the American Bankers Association and was a member of the Federal Advisory
Council of the Federal Reserve System, representing the 12th district of the Federal Reserve from 1999 to 2000. Mr. Dods also has served as the Chairman of the Board of
Matson, Inc. since June 2012, served on the Board of Directors of Alexander & Baldwin, Inc. from 1989 to 2014, and served on the Board of Maui Land & Pineapple
Company, Inc. from October 2004 through May 2010. Mr. Dods also serves on the Board of Directors of several privately-held companies. Mr. Dods brings to the Board extensive
experience managing complex business organizations as well as extensive knowledge of the Hawaii markets in which the Company operates.
Warren H. Haruki has been President and Chief Executive Officer of Grove Farm Company, Inc., a privately-held land development
company located on Kauai, Hawaii, since February 2005. He also is the Chairman and Chief Executive Officer, since 2009, of Maui Land & Pineapple Company, Inc. He also serves on the Board
of Directors of several privately-held companies located in Hawaii. From 1991 until his retirement in 2003, Mr. Haruki served as President of the predecessors of Hawaiian Telcom, Inc.,
and as a result is knowledgeable about the strategic issues facing the Company and the Hawaii markets and communities in which the Company operates. During his 26-year career with GTE and
Verizon, he gained in-depth experience in all aspects of the operations of a telecommunications company.
Richard A. Jalkut has been President and Chief Executive Officer of U.S. TelePacific Corp. (dba TelePacific Communications), the
third largest wireline telecom provider in California and second largest in Nevada, since 2002. Mr. Jalkut has more than 35 years' experience in the telecommunications industry,
including previously serving as President and Chief Executive Officer of Pathnet Telecommunications, Inc., a wholesale provider of services to more than one hundred second- and third-tier
markets located across the U.S., and President, Chief Executive Officer and Chairman of NYNEX Telephone Companies. Mr. Jalkut has served on the Board of Directors of other telecom companies,
including Covad Communications Group, Inc. from 2005 to 2008 and Birch Telecom from 2000 to 2005. He brings to the Board extensive board experience with both telecom and non-telecom
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companies
and experience managing telecommunication companies, including serving on the Board of Directors of Univar Inc. from 2002 to the present and HSBC Holdings plc from 1991-2014,
and has an in-depth understanding of the challenges and opportunities facing the telecommunications industry.
Steven C. Oldham served as President and Chief Executive Officer of SureWest Communications, a publicly-held integrated communications
provider headquartered in Northern California, from January 2006 until his retirement in June 2012. Prior to joining SureWest, Mr. Oldham served as a Senior Advisor to The Brattle Group, which
provides consulting services and expert testimony on economic, finance, regulatory and strategic issues, from May 2002 to May 2005. Mr. Oldham was a member of SureWest's Board of Directors from
January 2004 to June 2012 and was chairman of its audit committee from June 2004 to December 2005. He served as Chairman of the United States Telecom Association, the leading trade association
representing broadband service providers, manufacturers and suppliers, from October 2009 to November 2011. He brings to the Board extensive experience managing a telecommunication company and an
in-depth understanding of the challenges and opportunities facing the telecommunications industry. He has been designated by the Board as an "audit committee financial expert."
Bernard R. Phillips III served as President and Chief Executive Officer of the National Rural Telecommunications Cooperative (NRTC) from
1987 until his retirement at the end of May 2010. NRTC is a cooperative that represents the advanced telecommunications and information technology interests of more than 1,500 rural utilities and
affiliates, including an affiliate of the Company. Mr. Phillips served on the Board of Directors of Digital Bridge Communications Corp., a private operator of WiMAX 4G broadband networks in
underserved and rural America, and served on the Board of Director of privately-held Avail-TVN, a digital media services company, until May 12, 2010. Mr. Phillips brings to the Board
extensive legislative and regulatory telecom experience and broad experience generally in the telecommunications industry.
Eric K. Yeaman became our President, Chief Executive Officer and a Director in June 2008, and led the Company through its filing for
bankruptcy protection under chapter 11 of the United States Bankruptcy Code in December 2008 and its emergence from chapter 11 in October 2010. Prior to joining us, Mr. Yeaman
served as Senior Executive Vice President and Chief Operating Officer of Hawaiian Electric Company, Inc. (HECO) from January 2008 to June 2008, where he was responsible for its Oahu operations,
energy solutions, public affairs and the financial and administrative process areas. From January 2003 to January 2008, Mr. Yeaman served as Financial Vice President, Treasurer and Chief
Financial Officer of Hawaiian Electric Industries, Inc. (HEI), HECO's parent company. At HEI, he oversaw the controller, treasury, investor relations, corporate tax, information technology and
enterprise risk management functions. Mr. Yeaman began his career at Arthur Andersen LLP in September 1989. Mr. Yeaman has been a director of Alexander &
Baldwin, Inc. since June 2012 and a director of Alaska Air Group, Inc. since November 2012. He also is a director of the United States Telecom Association. Mr. Yeaman brings to
the Board extensive experience managing complex business organizations as well as knowledge of the Hawaii markets in which the Company operates.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE NOMINEES LISTED ABOVE.
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Governance of the Corporation
We have adopted policies and practices that we believe result in strong and effective corporate governance. These policies and
practices include:
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- All of the directors constituting the Board, other than Mr. Yeaman, are "independent" under the NASDAQ rules.
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- All members of our Audit Committee, Compensation Committee, and Nominating and Governance Committee are independent under the NASDAQ
rules.
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- The Board has adopted a Code of Business Conduct applicable to all of our employees, including our executive officers, as well as a
Code of Conduct for the directors of the Company. The Code of Business Conduct and Code of Conduct for the Board of Directors can be found at http://ir.hawaiiantel.com.
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- We have a hotline for employees to report, on an anonymous basis, violations of our Code of Business Conduct, including without
limitation, any accounting, internal control, or audit concerns.
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- We have a policy regarding conflicts of interest under which all potential conflicts of interest must be reported to the Company on an
annual basis and as they arise.
Director Independence
The Board has determined that Messrs. Cellar, Dods, Haruki, Jalkut, Oldham, and Phillips (all directors other than
Mr. Yeaman) are "independent" under the NASDAQ rules. In making its independence determination, the Board considered among other things the Company's purchase of bulk fuel on a competitive bid
basis from Mid Pacific Petroleum, LLC, of which Mr. Dods was Chairman of the Board and which is wholly-owned by a company of which Mr. Dods is a minority owner and was Vice
Chairman of the Board.
The Board met eight times in 2014. Seven of these Board meetings included executive sessions of the non-management directors. Each
current director attended at least 75% of the total Board meetings and meetings of the committees on which they serve that were held in 2014. Directors are allowed to attend meetings of committees on
which they do not serve as members. However, the Audit Committee and Compensation Committee regularly hold executive sessions of only the committee members or non-management Directors.
We currently separate the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between the two
roles as they presently are defined. The Chief Executive Officer is responsible for setting our strategic direction and for our day-to-day leadership, operation and performance, while the Chairman
leads the Board and provides guidance to our Chief Executive Officer.
Committees of the Board of Directors
Our Board has an Audit Committee, Compensation Committee, Nominating and Governance Committee, and Executive Committee. Each of our
committees has a written charter approved by the Board that clearly establishes the committee's roles and responsibilities. Copies of the charters for the
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Audit
Committee, the Compensation Committee, the Nominating and Governance Committee and the Executive Committee can be found through the "Investor Relations" link on our website at www.hawaiiantel.com.
Please note that information on, or that can be accessed through, our website is not part of the proxy soliciting materials, is not
deemed "filed" with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended (the
"Exchange Act").
Audit Committee. The duties and responsibilities of the Audit Committee include recommending the appointment or termination of
the engagement of our
independent registered public accounting firm, overseeing the relationship with our independent registered public accounting firm, and reviewing significant accounting policies and controls. The
members of the Audit Committee are Messrs. Oldham (Chairman), Cellar, and Phillips, each of whom is an independent director under the NASDAQ rules. The Audit Committee met four times in 2014.
Each member of the Audit Committee meets the additional requirements regarding independence for Audit Committee members under the NASDAQ rules.
The
Board has determined that the Audit Committee includes two "audit committee financial experts", Steven C. Oldham and Kurt M. Cellar, as that term is defined in SEC regulations.
Mr. Oldham has financial expertise through his experience as Chief Executive Officer and past audit committee chairman of a publicly-held telecommunications company. Mr. Cellar currently
is the chairman of two audit committees of public companies and has financial expertise as a Chartered Financial Analyst and former manager of a hedge fund. Messrs. Oldham and Cellar also are
"independent" under the NASDAQ independence standards. In addition, the Board believes that all of the members of the Audit Committee are qualified to address any issues that are likely to come before
the Audit Committee, including the evaluation of our financial statements and supervision of our independent registered public accounting firm.
Compensation Committee. The duties and responsibilities of the Compensation Committee include reviewing and approving the
compensation of executive
officers and reviewing and making recommendations to the Board concerning the compensation of the independent directors. The members of the Compensation Committee are Messrs. Haruki (Chairman),
Dods, and Phillips. The Compensation Committee met twice in 2014. In addition to being independent under the NASDAQ rules, each member of the Compensation Committee is a "non-employee director" for
purposes of the Exchange Act.
The
Compensation Committee determines all compensation for our executive officers. Before making decisions on compensation for each of the executive officers other than the Chief
Executive Officer, the
Compensation Committee reviews with our Chief Executive Officer each executive's performance and accomplishments over the prior year. Mr. Yeaman makes recommendations to the Compensation
Committee regarding base salary increases and other compensation matters for each executive other than himself.
To
independently assist and advise the Compensation Committee, the Compensation Committee has retained Pay Governance LLC ("Pay Governance"), a national compensation consulting
firm. The engagement of Pay Governance is exclusively with the Compensation Committee, which has sole authority to retain and terminate any compensation consultant or other advisor that it uses. In
March 2015, Pay Governance provided a letter to the Compensation Committee confirming its independence. As needed, the Compensation Committee consults with Pay Governance on our executive compensation
programs, compensation program design changes, compensation strategy, and effectiveness of pay delivery, and asks Pay Governance to review and analyze market information on compensation trends and
practices and to make recommendations to the Compensation Committee based on competitive compensation data.
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Nominating and Governance Committee. The duties and responsibilities of the Nominating and Governance Committee include making
recommendations
regarding individuals qualified to become directors, the structure and composition of the Board and committees of the Board, and corporate governance policies and practices. The members of the
Nominating and Governance Committee are Messrs. Dods (Chairman), Cellar, and Jalkut, each of whom is an independent director under the NASDAQ rules. The Nominating and Governance Committee met
three times in 2014.
Executive Committee. The purpose of the Executive Committee is to act for the Board between Board meetings. The Executive
Committee has all the
powers of the Board except as otherwise provided in the Company's Bylaws or the corporation laws of the State of Delaware. The members of the Executive Committee are Messrs. Jalkut (Chairman),
Haruki, Oldham, and Yeaman. The Executive Committee met five times in 2014.
Director Stock Ownership Guidelines
To align the Board's interests with the interests of our stockholders, the Board has adopted stock ownership guidelines for its
members. The guidelines state that each Board member, not later than five years after the later of the date of adoption of the guidelines and the date the individual becomes a member of the Board,
should own shares of our common stock with a value at least equal to three times the applicable annual cash retainer. Such shares may be owned directly or by the individual's revocable living trust.
All of our Board members have met the ownership guidelines or have time remaining under the guidelines.
The Board's Role in Risk Oversight
Our Company faces a number of risks, including operational, competitive, regulatory, financial, economic, and legal risks. Our
management is responsible for the day-to-day management of the risks we face. While our Board, as a whole, has ultimate responsibility for the oversight of risk management, it administers its risk
oversight role in part through the Board committee structure, with the Audit Committee and Compensation Committee responsible for monitoring and reporting on the material risks associated with their
respective subject matter areas.
The
Board's role in our risk oversight process includes receiving regular reports from members of senior management, as well as from external advisors such as Deloitte &
Touche LLP, on areas of material risk to us, including operational, competitive, regulatory, financial, economic, and legal risks. The full Board (or the appropriate Board committee in the case
of risks that are reviewed by a particular committee) reviews these reports in order to understand our risk exposures and the steps that management has taken to monitor and control these exposures.
Reports received by a Board committee, or summaries thereof, are provided to the full Board, thereby enabling the Board and its committees to coordinate the risk oversight role. The Audit Committee
assists the Board in oversight and monitoring of principal risk exposures related to financial statements, legal, regulatory and other matters, as well as related mitigation efforts. The Compensation
Committee assesses the risks associated with the Company's compensation policies. See also "Compensation of the Named Executive Officers and DirectorsRelationship Between Compensation
Plans and Risk."
Annual Meeting Attendance
We encourage, but do not require, our directors to attend our annual meetings of stockholders. All but one of our directors attended
our 2014 Annual Meeting of Stockholders.
9
Table of Contents
PROPOSAL NO. 2
Our current Bylaws provide that the number of directors that constitute the whole Board may not be less than five and not more than
seven. Additionally, the Bylaws do not currently specifically articulate how the actual number within that range is fixed, although in practice the number is fixed by the Board of Directors. The Board
believes that an increase in the maximum number of directors that constitute the Board of Directors from seven to nine could permit two additional directors to be added who could build upon and
diversify the Board's existing experience and expertise. An increase in the maximum number of directors could also provide for greater flexibility in staffing of the Board's committees. Additionally,
specifying that the Board of Directors fixes the actual number of directors that constitute the Board at a given time provides greater clarity and removes potential ambiguity.
Proposed Amendment
We are asking stockholders to approve Amended and Restated Bylaws to provide that the number of directors that constitute the whole
Board may not be less than five and not more than nine and to clarify that the number of directors that constitute the Board within the specified range is determined by resolution of the Board. The
Board, at its meeting on March 10, 2015, approved the Amended and Restated Bylaws subject to stockholder approval. In the proposed Amended and Restated Bylaws, Section 3.2 is amended in
its entirety to read as follows, with added language underscored and deleted language struck through:
There
were no other changes.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE AMENDED AND RESTATED
BYLAWS.
PROPOSAL NO. 3
RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2015
Selection of Auditor
The Audit Committee has selected Deloitte & Touche LLP ("Deloitte") as our independent registered public accounting firm
to perform the audit of our financial statements for the fiscal year ending December 31, 2015, and we are asking you to ratify this selection. Deloitte has been our independent accounting firm
since 2005.
The
Audit Committee annually reviews the independent registered public accounting firm's independence, including reviewing all relationships between the independent registered public
accounting firm and us and any disclosed relationships or services that may impact the objectivity, independence, and performance of the independent registered public accounting firm. Additionally,
our Deloitte engagement audit partner is subject to regular rotation, the most recent rotation having occurred in 2013. As a matter of good corporate governance, the Board, upon recommendation of the
10
Table of Contents
Audit
Committee, has determined to submit to stockholders for ratification the selection of Deloitte. In the event that a majority of the shares of common stock present in person or represented by
proxy at the Annual Meeting and entitled to vote on Proposal No. 3 does not ratify the selection of Deloitte, the Audit Committee will review its future appointment of Deloitte.
Even
if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time if the Audit
Committee believes that such a change would be in the best interests of the Company and its stockholders.
We
expect that a representative of Deloitte will be present at the Annual Meeting and that the representative will have an opportunity to make a statement if he or she desires and will
be available to respond to appropriate questions.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non- Audit Services of Independent Registered Public Accounting Firm
The Audit Committee must pre-approve all audit and permissible non-audit services to be provided by the independent registered public
accounting firm. These services may include audit services, audit-related services, tax services, and other services. Pre-approval is generally requested annually and any pre-approval is detailed as
to the particular service, which must be classified in one of the four categories of services. The Audit Committee also may, on a case-by-case basis, pre-approve particular services that are not
contained in the annual pre-approval request. In connection with this pre-approval policy, the Audit Committee also considers whether the categories of pre-approved services are consistent with the
rules on accountant independence of the SEC.
Principal Accountant Fees and Services
The following is a summary of the fees billed or to be billed to us by Deloitte for professional services rendered for the years ended
December 31, 2014 and December 31, 2013:
|
|
|
|
|
|
|
|
Fee Category
|
|
Fiscal
Year 2014 |
|
Fiscal
Year 2013 |
|
Audit Fees |
|
$ |
972,000 |
|
$ |
904,712 |
|
Audit-Related Fees |
|
|
|
|
|
|
|
Tax Fees |
|
|
|
|
|
|
|
All Other Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees |
|
$ |
972,000 |
|
$ |
904,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Fees. Consist of fees billed for professional services rendered for the annual audit of our consolidated financial statements and
services that
Deloitte normally provides in connection with statutory and regulatory filings or engagements.
Non-Audit Fees. None.
The
Audit Committee determined that Deloitte's provision of these services, and the fees that we paid for these services (and no non-audit fees), are compatible with maintaining the
independence of the independent registered public accounting firm. The Audit Committee pre-approved the services that Deloitte provided in 2014 and 2013 in accordance with the pre-approval policy
discussed above.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP
AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2015.
11
Table of Contents
AUDIT COMMITTEE REPORT
The Audit Committee of the Board (the "Audit Committee") consists of Steven C. Oldham (Chairman), Kurt M. Cellar and Bernard R.
Phillips III. Each member of the Audit Committee meets the definition of "independent director" and otherwise qualifies to be a member of the Audit Committee under the NASDAQ rules.
The
Audit Committee's general role is to assist the Board in monitoring the Company's financial reporting process and related matters. Its specific responsibilities are set forth in its
charter. The Audit Committee reviews its charter annually. The charter was last reviewed in March 2015 and is available through the "Investor Relations" link on our website at www.hawaiiantel.com.
As
required by the charter, the Audit Committee reviewed the Company's audited financial statements for the fiscal year ended December 31, 2014, and met with management, as well
as with representatives of Deloitte, the Company's independent registered public accounting firm, to discuss the financial statements. The Audit Committee also discussed with members of Deloitte the
matters required to be
discussed by applicable Public Company Accounting Oversight Board and Securities and Exchange Commission rules.
In
addition, the Audit Committee received the written disclosures and letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte's
communications with the Audit Committee concerning independence and discussed with members of Deloitte its independence from management and the Company.
Based
on these discussions, the financial statement review and other matters it deemed relevant, the Audit Committee recommended to the Board that the Company's audited financial
statements for 2014 be included in the Company's proxy statement and Annual Report on Form 10-K for the year ended December 31, 2014.
Furthermore,
in connection with the standards for independence promulgated by the Securities and Exchange Commission, the Audit Committee reviewed the services provided by Deloitte, the
fees the Company paid for these services, and whether the provision of the services is compatible with maintaining the independence of the independent registered public accounting firm. The Audit
Committee deemed that the provision of the services is compatible with maintaining that independence.
The
Audit Committee has selected Deloitte to be the Company's independent registered public accounting firm for the fiscal year ending December 31, 2015. In doing so, the Audit
Committee considered the results from its review of Deloitte's independence, including (a) all relationships between Deloitte and the Company and any disclosed relationships or services that
may impact Deloitte's objectivity and independence, (b) Deloitte's performance and qualification as an independent registered public accounting firm, and (c) the regular rotation of
Deloitte's engagement audit partner, as required by applicable laws and regulations. As a matter of good corporate governance, the Audit Committee has determined to submit its selection of Deloitte to
the stockholders for ratification. In the event that a majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter do not
ratify this selection, the Audit Committee will review its future appointment of Deloitte.
|
|
|
|
|
Steven C. Oldham, Chairman
Kurt M. Cellar
Bernard R. Phillips III
|
12
Table of Contents
STOCK OWNERSHIP
Security Ownership of Certain Stockholders, Directors and Executive Officers
The following table sets forth information with respect to the beneficial ownership of the common stock of the Company as of
March 1, 2015, by:
-
- each person known by us to beneficially own more than 5% of the common stock;
-
- each of our directors and Named Executive Officers identified in the Summary Compensation Table below; and
-
- all of our directors and Named Executive Officers as a group.
The
amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. The
information relating to the Company's 5% beneficial owners is based on information received by the Company from such holders or filed by such holders with the SEC. Under the rules of the SEC, a person
is deemed to be a "beneficial owner" of a security if that person has or shares voting power, which includes the power to vote or direct the voting of a security, or investment power, which includes
the power to dispose of or to direct the disposition of a security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership
within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person's ownership percentage, but not for purposes of computing any other
person's percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which
such person has no economic interest.
Except
as otherwise indicated in these footnotes, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated shares of
common stock. Unless otherwise noted otherwise in the footnotes below, the address of each person listed in the table is: c/o General Counsel, Hawaiian Telcom Holdco, Inc., 1177 Bishop Street,
Honolulu, Hawaii 96813.
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner
|
|
Amount and Nature of
Beneficial Ownership |
|
Percentage of
Class |
|
5% or Greater Stockholders |
|
|
|
|
|
|
|
Black Diamond Capital Management, L.L.C.(1) |
|
|
2,617,829 |
|
|
24.5 |
% |
Twin Haven Capital Partners, L.L.C.(2) |
|
|
1,760,200 |
|
|
16.5 |
% |
Tennenbaum Capital Partners, LLC(3) |
|
|
724,159 |
|
|
6.8 |
% |
Loomis, Sayles & Company, L.P.(4) |
|
|
698,913 |
|
|
6.5 |
% |
Directors and Named Executive Officers |
|
|
|
|
|
|
|
Richard A. Jalkut(5) |
|
|
15,674 |
|
|
* |
|
Kurt M. Cellar(6) |
|
|
33,936 |
|
|
* |
|
Walter A. Dods, Jr.(7) |
|
|
8,936 |
|
|
* |
|
Warren H. Haruki(8) |
|
|
8,936 |
|
|
* |
|
Steven C. Oldham(9) |
|
|
8,936 |
|
|
* |
|
Bernard R. Phillips III(10) |
|
|
11,936 |
|
|
* |
|
Eric K. Yeaman(11) |
|
|
208,775 |
|
|
1.9 |
% |
Scott K. Barber(12) |
|
|
14,325 |
|
|
* |
|
Robert F. Reich(13) |
|
|
42,330 |
|
|
* |
|
John T. Komeiji(14) |
|
|
40,156 |
|
|
* |
|
Kevin T. Paul(15) |
|
|
9,809 |
|
|
* |
|
All Named Executive Officers and directors as a group (11 persons) |
|
|
389,349 |
|
|
3.6 |
% |
13
Table of Contents
- (1)
- Based
on a Schedule 13G/A filed with the SEC on January 12, 2015. According to the Schedule 13G/A, Black Diamond Capital Management,
L.L.C. and Stephen H. Deckoff have shared voting and shared dispositive power over all 2,617,829 shares. The address for Black Diamond Capital Management, L.L.C. is One Sound Shore Drive,
Suite 200, Greenwich, CT 06830. The address for Stephen H. Deckoff, is c/o Black Diamond, 5330 Yacht Haven Grande, Suite 100, St. Thomas, U.S. Virgin Islands 00802.
- (2)
- Based
on a Schedule 13G/A filed with the SEC on February 13, 2015. According to the Schedule 13G/A, Twin Haven Capital Partners,
L.L.C., Robert Webster, and Paul Mellinger have shared voting and shared dispositive power over all 1,687,000 shares, including 1,457,000 shares held by Twin Haven Special Opportunities Fund
III, L.P. and 230,000 shares held by Twin Haven Special Opportunities Fund IV, L.P. . The address for Twin Haven Capital Partners, L.L.C., Robert Webster, and Paul Mellinger is 33
Riverside Avenue, 3rd Floor, Westport, CN 06880.
- (3)
- Based
on a Schedule 13G filed with the SEC on May 3, 2012. According to the Schedule 13G, Tennenbaum Capital Partners, LLC has
sole voting and sole dispositive power over all 724,159 shares. Tennenbaum Capital Partners, LLC's address is 2951 28th Street, Suite 1000, Santa Monica, CA
90405.
- (4)
- Based
on a Schedule 13G/A filed with the SEC on February 17, 2015. According to the Schedule 13G/A, Loomis, Sayles &
Company, L.P. has sole voting and sole dispositive power over all 698,913 shares. Loomis, Sayles & Company, L.P.'s address is One Financial Center, Boston, MA 02111.
- (5)
- Includes
3,243 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
- (6)
- Includes
1,771 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
- (7)
- Includes
1,771 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
- (8)
- Includes
1,771 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
- (9)
- Includes
1,771 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
- (10)
- Includes
1,771 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
Also includes 1, 500 shares of Common Stock held by the Bernard R.Phillips III Revocable Trust and 1, 500 shares of Common Stock held by the Nancy L. Phillips III Revocable Trust.
- (11)
- Includes
45,075 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
Also includes 14, 000 shares of Common Stock held by the Eric Yeaman Irrevocable Trust.
- (12)
- Includes
5,477 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
- (13)
- Includes
11,106 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
- (14)
- Includes
10,109 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
- (15)
- Includes
3,851 shares of Common Stock issuable upon settlement of outstanding restricted stock unit awards within 60 days of March 1, 2015.
14
Table of Contents
Section 16(a) Beneficial Ownership Reporting Compliance
Under U.S. securities laws, directors, certain executive officers and persons holding more than 10% of our common stock must report
their initial ownership of the common stock and any changes in that ownership to the SEC. The SEC has designated specific deadlines for these reports and we must identify in this Proxy Statement those
persons who did not timely file these reports. Based solely on our review of copies of the reports filed with the SEC and written representations of our directors and executive officers, with the
limited exceptions noted below, we believe that all persons subject to reporting filed the required reports on time in 2014. Our executive officers made the following late filings of Form 4 in
2014. Kevin Paul filed one late report with respect to one transaction involving our withholding of shares in payment of tax liability upon vesting of restricted stock units, and one late report with
respect to one transaction involving the grant of restricted stock units. Additionally, each of Scott Barber, Robert Reich, John Komeiji and Eric Yeaman filed one late report in each case with respect
to one transaction involving the grant of restricted stock units.
15
Table of Contents
COMPENSATION OF THE NAMED EXECUTIVE OFFICERS AND DIRECTORS
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides information concerning the 2014 compensation program for the executive officers
identified in the Summary Compensation Table below (the "Named Executive Officers"). This Compensation Discussion and Analysis contains forward-looking statements that are based on our current plans,
considerations, expectations, and determinations regarding future compensation programs. The actual compensation programs that we adopt in the future may differ materially from currently planned
programs as summarized in this discussion.
The compensation of our Named Executive Officers' consists of three principal elements: (1) base salary, (2) cash-based
performance compensation, and (3) equity compensation. We believe our executive compensation programs are effectively designed to align the interests of our executives with the interests of our
stockholders and are instrumental in achieving our business objectives. In determining executive compensation for fiscal year 2014, the Compensation Committee considered the strong stockholder support
that the "Say-on-Pay" proposal received at our May 13, 2011 and May 6, 2014 annual meeting of stockholders (approximately 93% and 99%, respectively, of the votes cast (excluding broker
non-votes) voted to approve the compensation of Company's named executive officers). In order to support our business strategy and operations going forward, the Compensation Committee seeks to target
total direct compensation for our Named Executive Officers, on average, at the 50th percentile (median) based on competitive survey and peer company data compiled by Pay
Governance LLC, our compensation consultant.
As
has been the case in the past, the Compensation Committee will consider stockholder concerns and feedback on our executive compensation program that it receives. Also, consistent with
the results of our stockholder vote at our May 13, 2011 annual meeting of stockholders on the frequency of future advisory votes on executive compensation, we will hold an advisory vote on the
compensation of our Named Executive Officers every three years (the most recent vote was held in 2014) until the next required vote on the frequency of advisory votes on the compensation of our Named
Executive Officers.
Highlights
of our executive compensation programs include the following:
-
- A significant portion of our Named Executive Officers' total compensation (ranging from approximately 45% to 67%) is considered by us
to be "at risk" because it is subject to meeting meaningful performance goals, stock price performance, and continued employment.
-
- Our Named Executive Officers receive long-term equity awards subject to performance-based, as well as time-based, vesting
requirements. These long-term incentives are targeted to have grant date values between 40% and 100% of our Named Executive Officers' base salaries. We believe these awards ensure that a significant
portion of the executives' compensation is tied to long-term Company performance, including stock price performance, thereby aligning the executives' interests with those of stockholders.
-
- To ensure that our compensation remains competitive while adequately incentivizing our Named Executive Officers, we target total
direct compensation (consisting of base salary, annual cash performance incentives, and long-term equity incentive opportunities) at the 50th percentile of market based on competitive survey
and peer company data compiled by our compensation consultant.
16
Table of Contents
-
- The Board has adopted stock ownership guidelines that require executives to hold a minimum amount of our common stock, again aligning
executives' interests with those of our stockholders.
The
Compensation Committee periodically evaluates our executive compensation policies and practices and adjusts them as appropriate to reflect our performance and competitive needs. The
Compensation Committee has engaged Pay Governance LLC ("Pay Governance"), an independent, national compensation consulting firm, to provide analysis of our Named Executive Officers'
compensation.
In 2014, our senior management continued to make progress executing our strategic plan, including investing in the key growth areas of
our business, the ultimate goal of which is to increase stockholder value. Reflecting such progress, we recorded our fifth consecutive year of profitability since becoming a standalone company. We
also continued our transformation to a
next-generation communications company and made strategic decisions, highlighted in 2014 by our commitment to the SEA-US trans-pacific fiber optic cable project (the "SEA-US Cable"), to further our
growth strategy and better position the Company to be successful over the long-term. Revenue from our consumer channel continued to grow, continuing the reversal that began in the second quarter of
2012 from the secular declines in legacy services. We continued to invest in our broadband network to expand and enhance our broadband capabilities and strengthen our competitive position. In
particular, we were able to expand our portfolio of IP-based business products, expand the speed and reach of our high-speed Internet service, integrate and continue to grow our data center business
and expand the footprint and subscriber base of our Hawaiian Telcom TV service. We also upgraded and optimized our systems architecture in order to
enhance and broaden our portfolio of services. In general, consistent with our philosophy of paying for performance and maintaining competitive compensation packages, in 2014 our Named Executive
Officers received base salary increases based on a two percent merit increase for non-union employees, as well as performance compensation awards reflecting performance against corporate performance
metrics for 2014 and restricted stock unit awards pursuant to our 2010 Equity Incentive Plan.
We are in a highly-technical and competitive industry and compete with many other companies for qualified executives. To meet this
challenge, our Compensation Committee seeks to offer a compensation program that is competitive; attracts, retains, and motivates highly-skilled executives who contribute to our success; aligns our
executives' interests with the interests of stockholders; and helps us to achieve our financial and strategic objectives by tying a substantial portion of our executives' annual and long-term
compensation to the achievement of meaningful performance objectives. To date, we have not adopted formal policies or guidelines for allocating compensation between current and long-term compensation,
between cash and non-cash compensation, or among different forms of non-cash compensation, but our Compensation Committee considers data from surveys conducted by its compensation consultant in
determining the appropriate allocation of our executives' total compensation among annual base salary, annual cash performance compensation, and long-term, equity-based compensation. Our Compensation
Committee seeks to target total direct compensation, on average, at the 50th percentile (median) based on competitive survey and peer company data provided by its compensation
consultant.
17
Table of Contents
Executive Compensation Process
Role of the Compensation Committee
Our Compensation Committee is responsible for establishing our executive compensation philosophy and administering our executive
compensation program, including reviewing and approving the compensation of our Named Executive Officers. It also has the responsibility to assess the compensation policies and practices for all
employees to determine if they create risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee regularly consults with and reports to our full
Board of Directors on its deliberations and actions.
Currently,
the Compensation Committee consists of three members of the Board of Directors, Messrs. Dods, Haruki and Phillips. Our Board of Directors determined that each member of
our Compensation Committee was and remains a non-employee director for purposes of Rule 16b-3 under the Exchange Act and an independent director as that term is defined under the NASDAQ rules.
The
Compensation Committee intends to review our executive compensation program on a periodic basis to determine whether it is appropriate, properly coordinated, and achieves its
intended purposes.
In carrying out its responsibilities, our Compensation Committee works with our Chief Executive Officer and other members of our senior
management team to obtain information such as Company and individual performance, market data, and management's perspective and recommendations on compensation matters. Typically, our Chief Executive
Officer makes recommendations to the Compensation Committee regarding the compensation of executives other than himself and attends Compensation Committee and Board meetings at which such compensation
matters are discussed (other than those portions of such meetings involving his own compensation).
The Compensation Committee has the authority to retain the services of compensation consultants and other advisors from time to time,
as it deems necessary or appropriate, in connection with the establishment and administration of our compensation and employee benefit plans, policies and programs. In February 2013, pursuant to the
request of the Compensation Committee, Pay Governance completed its evaluation of the competitiveness and effectiveness of the total compensation package offered to our executives, including our Named
Executive Officers (the "2013 Report"). In December 2014, Pay Governance provided an updated Bi-Annual Executive Compensation review (the "2014 Updated Report") including a market review and
recommendations for 2015 for the base salaries, performance compensation payments and long-term equity compensation programs, as well as a review of, and recommendations for 2015 regarding, annual
incentive plan design, performance measures and performance ranges. Pay Governance serves at the discretion of the Compensation Committee and does not advise the Company on any other matters.
The 2013 Report compared the pay levels for 13 executive positions to competitive market data from the Towers Watson 2011/2012 Survey
Report on Top Management Compensation and to publicly-reported compensation at the following peer telecommunications companies: Alaska Communications Systems Group Inc.,
CenturyLink, Inc., Consolidated Communications Holdings Inc., FairPoint Communications Inc., Frontier Communications Corporation, General Communication Inc., NTELOS
Holdings Corp., USA Mobility, Inc., and Windstream Corporation. The 2014 Updated Report compared the pay levels for 11 executive positions to competitive market data from the Towers
18
Table of Contents
Watson 2013/2014
Survey Report on Top Management Compensation and to publicly-reported compensation at the following peer telecommunications companies: Alaska Communications Systems
Group Inc., Atlantic Tele-Network, Inc., Cogent Communications Holdings, Inc., Consolidated Communications Holdings Inc., FairPoint Communications Inc., General
Communication Inc., Inteliquent, Inc., Iridium Communications Inc., Lumos Networks Corp., NTELOS Holdings Corp., Premiere Global Services, Inc., Shenandoah
Telecommunications Co., Spok Holdings, Inc., and Vonage
Holdings Corporation. The Compensation Committee reviews the peer group periodically and makes adjustments to its composition as necessary.
The
results of both the 2013 Report and the 2014 Updated Report showed that, on average, our executive base salaries are positioned at approximately the
50th percentile of the competitive survey and peer company data; target annual performance payments are positioned between the 50th and
62.5th percentiles; and our long-term incentive compensation (as a percentage of base salary) is below the 50th percentile. Target total cash compensation
(the sum of base salary and target annual performance compensation) is, on average, between the 50th and 62.5th percentiles, while target total direct
compensation (the sum of base salary, target annual performance compensation, and long-term incentive compensation) was, on average, 3% below the 50th percentile as of the 2013
Report and 11% below the 50th percentile as of the 2014 Updated Report.
In determining executive compensation, the Compensation Committee also considers, among other factors, the possible tax consequences to
the Company and to its executives, accounting consequences to the Company, and the impact of certain arrangements on stockholder dilution. However, to maintain maximum flexibility in designing
appropriate compensation programs, the Compensation Committee, while considering these items as factors in determining compensation, will not limit compensation to those levels or types of
compensation that are intended to have a particular tax or accounting result, to be deductible by the Company, or to achieve a specific level of stockholder dilution.
Our
Compensation Committee considers the provisions of Section 162(m) of the Internal Revenue Code and related regulations that restrict deductibility for federal income tax
purposes of executive compensation paid to certain of our executive officers, to the extent such compensation exceeds $1,000,000 for any of such officers in any year and does not qualify for an
exception under the statute or regulations. However, in the event our Compensation Committee believes that our interests are best served, in a particular situation, by providing compensation that does
not qualify as performance-based compensation under Section 162(m), it may grant compensation which may be subject to the $1,000,000 annual limit on deductibility, including base salary, annual
cash bonuses, and equity awards.
Sections 280G
and 4999 of the Internal Revenue Code provide that executive officers, persons who hold significant equity interests, and certain other highly-compensated service
providers may be subject to an excise tax if they receive payments or benefits in connection with a change in control of our Company that exceeds certain prescribed limits, and that our Company (or a
successor) may forfeit a deduction on the amounts subject to this additional tax. Further, Section 409A of the Internal Revenue Code imposes certain additional taxes on service providers who
enter into certain deferred compensation arrangements that do not comply with the requirements of Section 409A. We have not agreed to pay any executive officer, including any Named Executive
Officer, a "gross-up" or other reimbursement
payment for any tax liability that he might owe as a result of the application of Sections 280G, 4999 or 409A.
For 2014, the compensation program for our Named Executive Officers consisted of three principal elements: (1) base salary,
(2) cash-based performance compensation, and (3) equity compensation. The
19
Table of Contents
compensation
program is designed to motivate our Named Executive Officers to perform in a manner that will enable us to meet our strategic goals. Set forth below is a discussion of each element of our
executive compensation program, including why each element is included, and the criteria for decisions made with respect to each such element for fiscal year 2014.
Base Salary. Base salaries for our Named Executive Officers are based on the scope of their responsibilities, taking into
account competitive survey
data compiled by Pay Governance on compensation paid by comparable companies for similar positions. Base salary merit increases for Named Executive Officers are considered each year and are based on
the individual performance appraisals of the executives and on the amount of the merit increase pool budgeted by management and approved by the Compensation Committee for the year in question. The
2013 Report determined that our executive base salaries, on average, were positioned at approximately the 50th percentile of the competitive survey and peer company data. For
2014, the Compensation Committee considered Pay Governance's 2013 Report, salary adjustment survey data obtained from Hawaii businesses by the Hawaii Employers Council, and past merit increases for
our Named Executive Officers. Taking into account the foregoing, the Compensation Committee approved a merit increase for our non-union employees, including the Named Executive Officers, averaging two
percent. The two percent merit increase was below the national and Hawaii averages, but still recognizes the contributions of our Named Executive Officers and other non-union employees while balancing
our overall cost structure requirements. When making the decisions on base salary increases, our Chief Executive Officer reviews the performance of the other Named Executive Officers and the
Compensation Committee reviews the performance of our Chief Executive Officer.
The
following table shows the base salary information for each Named Executive Officer:
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Base Salary as of
December 31, 2013 |
|
Base Salary as of
December 31, 2014 |
|
Percentage Increase
in Base Salary |
|
Eric K. Yeaman |
|
$ |
710,000 |
|
$ |
725,000 |
|
|
2.0 |
% |
Scott K. Barber |
|
$ |
400,000 |
|
$ |
408,000 |
|
|
2.0 |
% |
Robert F. Reich |
|
$ |
333,000 |
|
$ |
340,000 |
|
|
2.1 |
% |
John T. Komeiji |
|
$ |
330,000 |
|
$ |
337,000 |
|
|
2.1 |
% |
Kevin T. Paul |
|
$ |
290,000 |
|
$ |
295,800 |
|
|
2.0 |
% |
Annual Performance Compensation Plan. The annual Performance Compensation Plan provides our
Named Executive Officers and other key employees with the opportunity to obtain, in addition to their base salary, an annual cash performance payment that is dependent upon achieving defined corporate
performance goals. Any cash performance payments generally are awarded no later than the end of the first quarter of the following year. Employment with the Company at the time of award is a
prerequisite to receiving an award.
The
2013 Pay Governance market compensation study determined that our target annual cash performance payments for our executives generally were positioned between the
50th and 62.5th percentiles of the competitive survey and peer company data. Following a review of our Performance Compensation Plan, Pay Governance
recommended revising the payout percentages for achieving threshold and maximum levels from 75% and 125% of target, respectively, to either 75% and 150%, respectively, or 50% and 200%, respectively.
At its March 2014 meeting, the Compensation Committee chose a more conservative approach and decided to maintain the 2013 payout percentages for threshold and maximum levels at 75% and 125%,
respectively.
The
Performance Compensation Plan is reviewed annually and its terms may be modified from time to time to reflect changes in our business strategies and focus. Pursuant to the
Performance Compensation Plan, the Compensation Committee approves the target annual performance payment awards for our Chief Executive Officer and other Named Executive Officers and the corporate and
20
Table of Contents
individual
performance goals, if any, and their relative weights. The performance payment is calculated as a percentage of the employee's annual salary. For our Named Executive Officers for the 2014
plan year, the percentages of annual salary used to determine the target annual performance payment ranged from 40% to 100%. Depending on the achievement of the predetermined targets set by the
Compensation Committee, the annual performance payment may be less than or greater than the target annual performance payment. In addition, solely at our discretion, additional performance-based
compensation may be paid to our Named Executive Officers and other key employees apart from the Performance Compensation Plan. The corporate performance calculations under our Performance Compensation
Plan are based on our audited financial results, as shown below.
For
the 2014 plan year, the Compensation Committee determined that the Performance Compensation Plan should be based on the achievement of only Company goals, and eliminated reliance on
individual performance goals, based on the rationale that executives have a greater influence on corporate performance and to better align the interests of our executives with those of the
stockholders. The Company goals consisted of revenue, adjusted EBITDA, net cash flow, and customer satisfaction. Customer satisfaction was based on transactional surveys of our consumer and business
customers conducted by independent market research firms. Target customer satisfaction was based on a composite of total surveys from each of the consumer, HTTV and business customer service
categories in which survey participants rated the Company either an "8," "9," or "10" on a scale from 1 to 10. The relative weighting of the Company goals, performance target levels, and threshold and
maximum
levels are set forth in the table below, with the customer satisfaction targets representing the average of the three customer service categories:
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Goal
|
|
Weighting |
|
Percentage of Target |
|
Target
($ in mils) |
|
% Payout |
|
Revenue |
|
|
30 |
% |
|
|
|
|
|
|
|
|
Threshold |
|
|
|
|
95% |
|
$ |
387.4 |
|
|
75 |
% |
Target |
|
|
|
|
100% |
|
$ |
407.8 |
|
|
100 |
% |
Maximum |
|
|
|
|
105% |
|
$ |
428.2 |
|
|
125 |
% |
Adjusted EBITDA |
|
|
25 |
% |
|
|
|
|
|
|
|
|
Threshold |
|
|
|
|
95% |
|
$ |
116.8 |
|
|
75 |
% |
Target |
|
|
|
|
100% |
|
$ |
123.0 |
|
|
100 |
% |
Maximum |
|
|
|
|
105% |
|
$ |
129.2 |
|
|
125 |
% |
Net Cash Flow |
|
|
20 |
% |
|
|
|
|
|
|
|
|
Threshold |
|
|
|
|
0% |
|
$ |
0.0 |
|
|
75 |
% |
Target |
|
|
|
|
100% |
|
$ |
3.0 |
|
|
100 |
% |
Maximum |
|
|
|
|
200% |
|
$ |
6.0 |
|
|
125 |
% |
Customer Satisfaction |
|
|
25 |
% |
|
|
|
|
|
|
|
|
Threshold |
|
|
|
|
2.7% Less than Target on average |
|
|
|
|
|
75 |
% |
Target |
|
|
|
|
Target |
|
|
|
|
|
100 |
% |
Maximum |
|
|
|
|
2.7% Better than Target on average |
|
|
|
|
|
125 |
% |
The
Compensation Committee determined that no payments for the 2014 plan year would be made unless the minimum thresholds for both revenue and adjusted EBITDA were achieved. In addition,
individual payouts were contingent upon the executive obtaining a "meets expectations" or better performance evaluation. Target annual performance payments were based on a payout schedule that
provided for target opportunities of 100% of annual salary for the Chief Executive Officer, 75% for the Chief Operating Officer, and between 40% and 65% for the Named Executive Officers who were
senior vice presidents, and maximum payout opportunities of 125% for the Chief Executive Officer, 93.75% for the Chief Operating Officer, and between 50% and 81.25% for the other Named Executive
Officers.
21
Table of Contents
The
Company's results for 2014 for revenue, adjusted EBITDA, net cash flow, and customer satisfaction are presented in the table below. Based on the foregoing, the Compensation Committee
approved 2014 plan year performance payments for the Named Executive Officers that reflected 67% of the Company goals component of their target annual performance payments, summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Performance Metric
|
|
Target
($ in millions)(1) |
|
Result
($ in millions)(1) |
|
Result as a
Percentage
of Target(2)(3) |
|
Weighting |
|
Actual
Payout as a
Percentage
of Target(2) |
|
Revenue |
|
$ |
407.8 |
|
$ |
390.7 |
|
|
95.8 |
% |
|
30 |
% |
|
23.7 |
% |
Adjusted EBITDA |
|
$ |
123.0 |
|
$ |
117.8 |
|
|
95.8 |
% |
|
25 |
% |
|
19.7 |
% |
Net Cash Flow |
|
$ |
3.0 |
|
$ |
2.8 |
|
|
93.1 |
% |
|
20 |
% |
|
19.7 |
% |
Customer Satisfaction(4) |
|
|
|
|
|
|
|
|
|
|
|
25 |
% |
|
3.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payout percentage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- Rounded
to nearest million dollars.
- (2)
- Rounded
to nearest tenth of a percent.
- (3)
- Determined
by interpolation based on how the actual results compared to the threshold, target, and maximum levels.
- (4)
- Customer
satisfaction was measured in three categories based on customer surveys. One category was between threshold and target level and the other two
categories were below the threshold level.
The
following chart shows the 2014 plan year target and actual annual performance payment awards, as represented by reference to the applicable percentage of base salary, and actual
dollar payouts for each Named Executive Officer:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Target as a
Percentage of
Annual Salary |
|
Potential
Payout
Range as a
Percentage of
Annual Salary |
|
Actual
Payout as a
Percentage of
Annual Salary |
|
Actual
Payout |
|
Eric K. Yeaman |
|
|
100 |
% |
0 - 125% |
|
|
67.4 |
% |
$ |
485,750 |
|
Scott K. Barber |
|
|
75 |
% |
0 - 93.75% |
|
|
50.3 |
% |
$ |
204,835 |
|
Robert F. Reich |
|
|
65 |
% |
0 - 81.25% |
|
|
43.6 |
% |
$ |
147,901 |
|
John T. Komeiji |
|
|
65 |
% |
0 - 81.25% |
|
|
43.6 |
% |
$ |
146,589 |
|
Kevin T. Paul |
|
|
40 |
% |
0 - 50% |
|
|
26.8 |
% |
$ |
79,202 |
|
2010 Equity Incentive Plan. The 2010 Equity Incentive Plan provides key employees, including our Named Executive Officers, and
non-employee directors
of the Company and its subsidiaries with the opportunity to receive restricted stock units (RSUs), stock options, and other equity-based awards. The maximum number of shares of our common stock
issuable pursuant to awards granted under the 2010 Equity Incentive Plan is 1,400,000 shares. As explained above, Pay Governance's 2013 Report determined that our long-term incentive compensation (as
a percentage of base salary) was below the 50th percentile of the competitive survey and peer-company data.
The
RSU awards are intended to provide long-term compensation for a four-year period beginning on the grant date. The size of each RSU award is based on a percentage of the executive's
base salary as well as on the fair market value of our common stock on the grant date. The Compensation Committee set the base salary percentage for each Named Executive Officer in line with the
recommendation of the Company's compensation consultant which was made following its assessment of competitive long-term incentive compensation levels for each Named Executive Officer.
22
Table of Contents
The
RSUs awarded to the Named Executive Officers are divided equally into time-based RSUs and performance-based RSUs. The time-based RSUs vest in equal installments over a four-year
period. In the case of the time-based RSUs awarded in 2014, for example, vesting will take place on March 12, 2015, March 12, 2016, March 12, 2017, and March 12, 2018. In
furtherance of the Compensation Committee's desire to tie RSU awards to shareholder return as well as the Company's financial performance, the Named Executive Officers' performance-based RSUs vest in
three equal installments over a four-year period, subject to meeting total shareholder return ("TSR") and financial performance goals. In the case of the performance-based RSUs awarded in 2014, for
example, vesting will be determined on the determination date (in the case of RSU grants made in 2014, for example, vesting will occur on the later of March 12, 2016 and the date in 2016 that
the Compensation Committee determines the vesting of the performance-based RSUs) and on each of the first two anniversaries of the determination date, depending upon (i) the Company's financial
performance in 2014 for revenue and adjusted EBITDA and (ii) the Company's TSR for 2013 and 2014 in comparison to the NASDAQ Telecommunications Index, subject to continued employment through
each vesting date and provided that no performance-based RSUs will vest if the fiscal year 2014 Adjusted EBITDA performance is below the threshold performance goal. More specifically, the number of
performance-based RSUs that vest on the determination date and on each of the first two anniversaries thereof will be equal to the product of A times B times C, where:
|
|
|
|
|
A |
|
= |
|
The target number of performance-based RSUs scheduled to vest with respect to the applicable performance period. |
B |
|
= |
|
Weighted % Vested from Revenue Performance + Weighted % Vested from Adjusted EBITDA Performance, each of which is determined as follows: |
Weighted % Vested from Revenue Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measurement
|
|
Weighting |
|
Factor |
|
Amount |
|
% Vested
from
Revenue
Performance |
|
|
|
|
|
|
|
($ in mils)
|
|
|
|
FY2014 Revenue |
|
|
40 |
% |
|
|
|
|
|
|
|
|
|
Threshold |
|
|
|
|
|
95 |
% |
$ |
387.40 |
|
|
75 |
% |
Target |
|
|
|
|
|
100 |
% |
$ |
407.80 |
|
|
100 |
% |
Maximum |
|
|
|
|
|
105 |
% |
$ |
428.20 |
|
|
125 |
% |
Weighted % Vested from Adjusted EBITDA Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measurement
|
|
Weighting |
|
Factor |
|
Amount |
|
%Vested from
Adjusted EBITDA
Performance |
|
|
|
|
|
|
|
($ in mils)
|
|
|
|
FY2014 Adjusted EBITDA |
|
|
60 |
% |
|
|
|
|
|
|
|
|
|
Threshold |
|
|
|
|
|
95 |
% |
$ |
116.80 |
|
|
75 |
% |
Target |
|
|
|
|
|
100 |
% |
$ |
123.00 |
|
|
100 |
% |
Maximum |
|
|
|
|
|
105 |
% |
$ |
129.20 |
|
|
125 |
% |
In
the event of performance between Threshold and Target or between Target and Maximum, straight-line interpolation will determine the weighted percentages set forth above. If
performance is below Threshold, the applicable weighted percentage will equal zero percent (0%). In no event may the
Weighted % Vested from Revenue Performance or the Weighted % Vested from Adjusted EBITDA Performance exceed 125%.
23
Table of Contents
|
|
|
|
|
C |
|
= |
|
TSR Award Modifier, which ranges from 75% to 125% depending upon the performance of the Company's TSR relative to the performance of the NASDAQ Telecommunications Index (Index) TSR, as follows: |
|
|
|
|
|
|
|
Level
|
|
TSR Relative Performance
[(Company TSR minus
Index TSR) × 100%] |
|
TSR Award
Modifier |
|
High |
|
+15% and higher |
|
|
125 |
% |
Target |
|
0% |
|
|
100 |
% |
Low |
|
15% and lower |
|
|
75 |
% |
Company
TSR = (Company Share Ending Price/Company Share Beginning Price) 1
Index TSR = (Index Ending Price/ Index Beginning Price) 1
Beginning
Price = trading volume weighted average price of the Company's common stock or the NASDAQ Telecommunications Index, as applicable, over the first 5 trading days in January 2014,
accounting for the reinvestment of dividends over this period.
Ending
Price = trading volume weighted average price of the Company's common stock or the NASDAQ Telecommunications Index, as applicable, over the last 5 trading days in December 2015,
accounting for the reinvestment of dividends over this period.
In
the event of TSR relative performance between levels, straight-line interpolation will determine the TSR Award Modifier.
The
Weighted % Vested from Revenue Performance, the Weighted % Vested from Adjusted EBITDA Performance, and the TSR Award Modifier allow for the possibility of vesting more than the
target number of performance-based RSUs in the event of over-performance in relation to the performance goals as well as for the possibility of vesting fewer than the target number in the event of
under-performance.
During
2014, the Compensation Committee granted a total of 52,691 performance-based RSUs (which assumes performance at target level) and time-based RSUs (collectively, "Target RSUs") to
our Named Executive Officers. The following chart shows the number of Target RSUs awarded to each Named Executive Officer in 2014, as well as the maximum number of RSUs that could vest in the event of
performance at above target levels ("Maximum RSUs"):
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
% of
Base Salary |
|
Number of
Target RSUs |
|
Number of
Maximum RSUs |
|
Eric K. Yeaman |
|
|
100 |
|
|
24,825 |
|
|
31,807 |
|
Scott K. Barber |
|
|
75 |
|
|
10,478 |
|
|
13,424 |
|
Robert F. Reich |
|
|
65 |
|
|
7,567 |
|
|
9,695 |
|
John T. Komeiji |
|
|
50 |
|
|
5,770 |
|
|
7,392 |
|
Kevin T. Paul |
|
|
40 |
|
|
4,051 |
|
|
5,190 |
|
For
the performance-based RSUs scheduled to vest in 2015 (with respect to the 2014 performance period), the Company achieved the revenue, adjusted EBITDA and TSR presented in the table
below.
24
Table of Contents
Based
on those results, the Compensation Committee approved performance-based RSU vesting for the Named Executive Officers at 92.4% of target, summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Performance Metric
|
|
Target
($ in millions)(1) |
|
Result
($ in millions)(1) |
|
Result as a
Percentage of
Target(2)(3) |
|
Weighting |
|
Actual
Vesting as a
Percentage
of Target(2) |
|
Revenue |
|
$ |
407.8 |
|
$ |
390.7 |
|
|
95.8 |
% |
|
40 |
% |
|
31.6 |
% |
Adjusted EBITDA |
|
$ |
123.0 |
|
$ |
117.8 |
|
|
95.8 |
% |
|
60 |
% |
|
47.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested % before TSR Award Modifier |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79.0 |
% |
TSR Award Modifier(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
117.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested % after TSR Award Modifier(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- Rounded
to nearest million dollars.
- (2)
- Rounded
to nearest tenth of a percent.
- (3)
- Determined
by interpolation based on how the actual results compared to the threshold, target, and maximum levels.
- (4)
- TSR
Modifier was calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
TSR Modifier
|
|
January 2013* |
|
December 2014* |
|
2 Year return |
|
Hawaiian Telcom Holdco, Inc. |
|
$ |
19.94 |
|
$ |
27.56 |
|
|
38.2 |
% |
NASDAQ Telecom Index |
|
$ |
207.15 |
|
$ |
390.7 |
|
|
32.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
TSR Award Modifier |
|
|
|
|
|
|
|
|
117.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- *
- Represents
trading volume weighted average price of the Company's common stock or the NASDAQ Telecommunications Index, as applicable, over the first 5 trading
days in January 2013 and last 5 trading days in December 2014, as applicable.
- (5)
- The
vested percentage was calculated as Weighted % Vested from Revenue Performance + Weighted % Vested from Adjusted EBITDA
Performance × TSR Award Modifier.
For
all RSUs, the Compensation Committee has the discretion, after consideration of such factors as it deems appropriate, to reduce the number of performance-based RSUs that otherwise
would vest based upon the achievement of the applicable performance goals. In addition, all RSU awards are non-transferable, and the shares issued pursuant to vesting of performance-based RSUs will be
non-transferable subject to such transfer restriction lapsing in equal annual installments over a three-year period.
RSUs
vest on an accelerated basis upon the participant's death or disability, termination without Cause or by the participant for Good Reason or a change of control, as those terms are
defined in the 2010 Equity Incentive Plan. See "Potential Payments on Termination or Change in Control" below.
We have a tax-qualified Section 401(k) retirement savings plan for our employees, including the Named Executive Officers, who
satisfy certain eligibility requirements. Under this plan, participants may elect to make pre-tax contributions, not to exceed the applicable statutory income tax limitation
25
Table of Contents
(which
was $17,500 in 2014). In addition, we may make discretionary contributions to the plan in any year, up to certain limits. In 2014, we provided a matching contribution equal to 100% of a
participant's salary deferrals, up to a maximum of 6% of a participant's compensation. Our contributions to the accounts of the Named Executive Officers are shown in the All Other Compensation column
of the Summary Compensation Table below. We intend for the plan to qualify under Section 401(a) of the Internal Revenue Code so that contributions by participants to the plan, and income earned
on plan contributions, are not taxable to participants until withdrawn from the plan.
Additional
benefits received by our Named Executive Officers include Company-funded executive group life, disability, and accidental death and dismemberment insurance; reimbursement of
out-of-pocket medical expenses; entitlement to severance benefits in the event of termination of employment under certain circumstances (as described in more detail below); and group medical plans and
medical and dependent care flexible spending accounts available to salaried employees generally.
Except
as described herein, we generally do not provide perquisites or other personal benefits to our Named Executive Officers. Currently, we do not view perquisites or other personal
benefits as a significant component of our executive compensation program. In the future, we may provide perquisites in limited circumstances, such as where we believe they are appropriate to assist
our executives in the performance of their duties, to make our executives more efficient and effective, and/or for recruitment, motivation, or retention purposes. All future practices with respect to
perquisites or other personal benefits will be approved and subject to periodic review by the Compensation Committee.
While
we intend to continue to maintain our current benefits and perquisites for our Named Executive Officers, we have discretion to revise, amend, or add to them. We believe these
benefits and perquisites are at competitive levels for comparable companies.
Our Board of Directors recognizes that it is critical to provide competitive compensation packages to attract and retain experienced
and skilled executives in a competitive and dynamic labor market. This includes competitive severance benefits. We believe that the severance benefits provided by the employment agreements with our
Named Executive Officers and by our Executive Severance Plan, among other things, allow them to maintain continued focus and dedication to their assigned duties to maximize stockholder value. A
discussion of the severance benefits of our Named Executive Officers is explained in greater detail under "Potential Payments on Termination or Change in Control" set forth below.
Other Compensation Policies
Stock Ownership Guidelines
Our Board of Directors believes that ownership of our common stock by our directors and officers promotes a focus on long-term growth
and aligns the interests of our directors and officers with those of our stockholders. Our stock ownership guidelines require our executives at the senior vice president level and higher, including
our Named Executive Officers, and our non-employee directors to achieve, not later than five years after the later of the date of adoption of the stock ownership guidelines and the date the individual
becomes subject to the guidelines, ownership of our common stock with a value at least as great as the values noted below:
Chief
Executive Officer, Chief Operating Officer, and senior vice presidents200% of annual base salary
Non-employee
directors300% of annual cash retainer
26
Table of Contents
Such
ownership includes ownership of restricted as well as unrestricted shares of common stock, whether owned by the individual, jointly, or by the individual's revocable living trust,
as well as unvested time-based restricted stock units. All of our named executive officers have met the ownership guidelines or have time remaining under the guidelines.
We have a policy regarding hedging the economic risk of the ownership of shares of our common stock which prohibits the Named Executive
Officers from engaging in short sales and similar arrangements involving our common stock.
Once final rules regarding clawback policies are issued as contemplated by the Dodd-Frank Act, we intend to develop a policy regarding
retroactive adjustments to our Named Executive Officers' compensation in situations where such compensation was predicated upon the achievement of financial results that subsequently were the subject
of a financial restatement. Once final rules are released regarding clawback requirements under the Dodd-Frank Act, we intend to review our policies and plans and, if necessary, amend them to comply
with the new mandates.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy
Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be incorporated into the Company's Proxy Statement
and Annual Report on Form 10-K for the year ended December 31, 2014.
|
|
|
|
|
Respectfully Submitted By:
The Compensation Committee
Warren H. Haruki, Chairman
Walter A. Dods, Jr.
Bernard R. Phillips III
|
Notwithstanding anything to the contrary set forth in any of the Company's filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might
incorporate future filings, including this Proxy Statement, in whole or in part, the Compensation Committee Report shall not be deemed to be incorporated by reference into any such filings, unless we
specifically incorporate these reports by reference in some other filed document.
Relationship between Compensation Plans and Risk
We believe that the Company's compensation programs, either individually or in the aggregate, do not encourage executives or employees
to undertake unnecessary or excessive risks that are reasonably likely to have a material adverse effect on us. We note the following mitigating
factors:
-
- The Compensation Committee sets the performance goals for our annual Performance Compensation Plan. These goals typically are
objective financial goals which the Compensation Committee believes are appropriately correlated with stockholder value;
-
- The use of equity awards fosters executive retention and aligns our executives' interests with those of our stockholders;
-
- The use of a long-term incentive vehicle, restricted stock units, that vest over a number of years and serve to align our executives'
interests with those of our stockholders; and
-
- Stock ownership guidelines for senior executives, monitored by the Compensation Committee, that encourage alignment with stockholder
interests over the long term.
27
Table of Contents
Summary Compensation Table
The following table sets forth information regarding compensation earned for the fiscal years ended December 31, 2014, 2013, and
2012 by our Named Executive Officers who were serving as executive officers at the end of 2014.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year |
|
Salary
($) |
|
Bonus
($) |
|
Stock
Awards
($)(2) |
|
Option
Awards
($) |
|
Non-Equity
Incentive
Plan
Compensation
($)(3) |
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) |
|
All Other
Compensation
($)(4) |
|
Total
($) |
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
Eric K. Yeaman |
|
|
2014 |
|
|
724,154 |
|
|
|
|
|
744,035 |
|
|
|
|
|
485,750 |
|
|
|
|
|
29,188 |
|
|
1,983,127 |
|
President and Chief |
|
|
2013 |
|
|
710,000 |
|
|
|
|
|
722,628 |
|
|
|
|
|
607,760 |
|
|
|
|
|
26,710 |
|
|
2,067,098 |
|
Executive Officer |
|
|
2012 |
|
|
706,231 |
|
|
|
|
|
567,472 |
|
|
|
|
|
494,362 |
|
|
|
|
|
24,982 |
|
|
1,796,046 |
|
Scott K. Barber(1) |
|
|
2014 |
|
|
407,631 |
|
|
|
|
|
314,026 |
|
|
|
|
|
204,834 |
|
|
|
|
|
29,315 |
|
|
955,806 |
|
Chief Operating Officer |
|
|
2013 |
|
|
386,154 |
|
|
|
|
|
541,024 |
|
|
|
|
|
239,723 |
|
|
|
|
|
92,648 |
|
|
1,259,549 |
|
|
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Reich |
|
|
2014 |
|
|
339,611 |
|
|
|
|
|
226,813 |
|
|
|
|
|
147,901 |
|
|
|
|
|
22,523 |
|
|
736,848 |
|
Senior Vice President, |
|
|
2013 |
|
|
331,375 |
|
|
|
|
|
220,305 |
|
|
|
|
|
181,687 |
|
|
|
|
|
22,194 |
|
|
755,561 |
|
Chief Financial Officer |
|
|
2012 |
|
|
325,908 |
|
|
|
|
|
163,044 |
|
|
|
|
|
158,702 |
|
|
|
|
|
20,629 |
|
|
668,283 |
|
and Treasurer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John T. Komeiji |
|
|
2014 |
|
|
336,600 |
|
|
|
|
|
172,927 |
|
|
|
|
|
146,589 |
|
|
|
|
|
20,651 |
|
|
676,767 |
|
Senior Vice President |
|
|
2013 |
|
|
328,523 |
|
|
|
|
|
167,932 |
|
|
|
|
|
197,014 |
|
|
|
|
|
21,356 |
|
|
714,825 |
|
and General Counsel |
|
|
2012 |
|
|
323,546 |
|
|
|
|
|
161,856 |
|
|
|
|
|
147,634 |
|
|
|
|
|
20,929 |
|
|
653,965 |
|
Kevin T. Paul |
|
|
2014 |
|
|
295,532 |
|
|
|
|
|
121,379 |
|
|
|
|
|
79,203 |
|
|
|
|
|
12,981 |
|
|
509,095 |
|
Senior Vice President |
|
|
2013 |
|
|
288,769 |
|
|
|
|
|
118,053 |
|
|
|
|
|
104,146 |
|
|
|
|
|
13,393 |
|
|
524,362 |
|
Technology |
|
|
2012 |
|
|
284,846 |
|
|
|
|
|
35,588 |
|
|
|
|
|
70,913 |
|
|
|
|
|
13,273 |
|
|
404,621 |
|
- (1)
- Mr. Barber's
employment with the Company as Chief Operating Officer commenced January 14, 2013.
- (2)
- Represents
the aggregate grant date fair values, calculated in accordance with FASB ASC Topic 718, of restricted stock unit awards under the 2010
Equity Incentive Plan. There can be no assurance that these grant date fair values will ever be realized by the Named Executive Officers. For fiscal 2014, this column includes the grant date fair
values of the target number of shares that may be earned pursuant to restricted stock unit awards granted in 2014. See the "Grants of Plan-Based Awards" table below for information on restricted stock
unit awards made in fiscal 2014. The grant date fair value of the maximum number of shares that may be earned are: (a) Eric Yeaman: $957,415, (b) Scott Barber: $404,084,
(c) Robert Reich: $291,860, (d) John Komeiji: $222,520 and (d) Kevin Paul: $156,188.
- (3)
- Represents
cash performance payments earned in the year indicated, under the Company's Performance Compensation Plan.
- (4)
- "All
Other Compensation" in 2014 includes: (i) amounts contributed by the Company to its 401(k) plan (Mr. Yeaman$17,500,
Mr. Barber$13,149, Mr. Reich$17,500, Mr. Komeiji$17,500, and Mr. Paul$10,736), (ii) premiums paid with respect to
supplemental term life, accidental death and dismemberment, disability and health benefits for the benefit of the Named Executive Officers, and (iii) reimbursement of out-of-pocket medical
expenses for each of the Named Executive Officers.
Employment Agreements
Each of Messrs. Yeaman, Barber, Reich, Komeiji, and Paul has entered into an employment agreement with us, with each of
Messrs. Yeaman, Komeiji and Paul entering into new employment agreements in 2014. Each of the employment agreements has no specified term but instead provides that the Named Executive Officer
is an at-will employee of the Company and that either party may
28
Table of Contents
terminate
the employment agreement at any time. Each of the employment agreements also provides that the respective Named Executive Officer is eligible to receive an annual performance payment under
our Performance Compensation Plan (see "Annual Performance Compensation Plan" above) and an equity award under the Company's 2010 Equity Incentive Plan (see "2010 Equity Incentive Plan" above)
pursuant to which performance payments and equity grants are tied to achieving certain corporate performance goals, as determined under the respective plan. Each of the employment agreements also
provides that the respective Named Executive Officer is entitled to participate in our Executive Severance Plan (see "Potential Payments on Termination or Change of Control" below) and employee
benefit plans, programs and arrangements at a level commensurate with their position.
Grants of Plan-Based Awards
The following table summarizes pertinent information concerning plan-based awards granted each of to the Named Executive Officers
during the fiscal year ended December 31, 2014:
Grants of Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(2) |
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) |
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) |
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards |
|
Exercise
or Base
Price of
Option
Awards
($/Sh) |
|
Grant
Date Fair
Value of
Stock and
Option
Awards
($)(3) |
|
Name
|
|
Grant
Date |
|
Threshold
($) |
|
Target
($) |
|
Maximum
($) |
|
Threshold
(#) |
|
Target
(#)(2) |
|
Maximum
(#) |
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
(k)
|
|
(l)
|
|
Eric K. Yeaman |
|
|
|
|
|
543,750 |
|
|
725,000 |
|
|
906,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,412 |
|
|
19,394 |
|
|
|
|
|
|
|
|
|
|
|
379,340 |
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,413 |
|
|
|
|
|
|
|
|
364,695 |
|
Scott K. Barber |
|
|
|
|
|
228,289 |
|
|
304,385 |
|
|
380,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,239 |
|
|
8,186 |
|
|
|
|
|
|
|
|
|
|
|
160,105 |
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,239 |
|
|
|
|
|
|
|
|
153,922 |
|
Robert F. Reich |
|
|
|
|
|
164,831 |
|
|
219,775 |
|
|
274,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,783 |
|
|
5,911 |
|
|
|
|
|
|
|
|
|
|
|
115,639 |
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,784 |
|
|
|
|
|
|
|
|
111,174 |
|
John T. Komeiji |
|
|
|
|
|
163,369 |
|
|
217,825 |
|
|
272,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,885 |
|
|
4,508 |
|
|
|
|
|
|
|
|
|
|
|
88,166 |
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,885 |
|
|
|
|
|
|
|
|
84,761 |
|
Kevin T. Paul |
|
|
|
|
|
88,272 |
|
|
117,695 |
|
|
147,119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,025 |
|
|
3,164 |
|
|
|
|
|
|
|
|
|
|
|
61,884 |
|
|
|
|
3/10/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,026 |
|
|
|
|
|
|
|
|
59,495 |
|
- (1)
- Represents
potential payouts under the Company's Performance Compensation Plan. The actual payouts are reflected in column (g) of the Summary
Compensation Table.
- (2)
- Each
restricted stock unit award listed in column (g) was granted under the 2010 Equity Incentive Plan and represents half of the restricted stock
unit awards granted on the grant dates shown in column (b). These restricted stock unit awards are performance-based and vest in three equal installments over four years subject to the performance
goals being met as described in "Executive Compensation Program2010 Equity Incentive Plan" above. The other half of the restricted stock unit awards granted on the grant date shown in
column (b) are listed in column (i). These restricted stock unit awards are time-based and vest in equal annual increments over a four-year period each March 12 of 2015, 2016, 2017, and
2018.
- (3)
- Represents
the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of restricted stock unit awards under the 2010 Equity
Incentive Plan. There can be no assurance that these grant date fair values will ever be realized by the Named Executive Officers. For fiscal 2014, this column includes the grant date fair values of
the target number of shares that may be earned pursuant to restricted stock unit awards granted in 2014. See the "Grants of Plan-Based Awards" table below for information on restricted stock unit
awards made in fiscal 2014.
29
Table of Contents
Outstanding Equity Awards at Fiscal Year-End
The following table summarizes the outstanding equity awards held by each of the Named Executive Officers at December 31, 2014.
There were no outstanding option awards as of December 31, 2014.
Outstanding Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards |
|
Name
|
|
Number of Shares
or Units of
Stock That Have
Not Vested (#) |
|
Market Value of
Shares or Units
of Stock
That Have Not
Vested($) |
|
Equity Incentive Plan
Awards: Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested(#)(1) |
|
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested($)(2) |
|
Eric K. Yeaman |
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
40,121 |
|
|
1,106,136 |
|
|
|
|
|
|
|
2012 |
|
|
13,616 |
|
|
375,393 |
|
|
8,714 |
|
|
240,224 |
|
2013 |
|
|
27,617 |
|
|
761,401 |
|
|
13,256 |
|
|
365,468 |
|
2014 |
|
|
19,395 |
|
|
534,720 |
|
|
12,412 |
|
|
342,199 |
|
Scott K. Barber |
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
11,670 |
|
|
321,742 |
|
|
5,601 |
|
|
154,419 |
|
2014 |
|
|
8,185 |
|
|
225,660 |
|
|
5,239 |
|
|
144,439 |
|
Robert F. Reich |
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
8,024 |
|
|
221,222 |
|
|
|
|
|
|
|
2012 |
|
|
3,912 |
|
|
107,854 |
|
|
2,504 |
|
|
69,035 |
|
2013 |
|
|
8,420 |
|
|
232,139 |
|
|
4,040 |
|
|
113,383 |
|
2014 |
|
|
5,912 |
|
|
162,994 |
|
|
3,783 |
|
|
104,297 |
|
John T. Komeiji |
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
7,952 |
|
|
219,237 |
|
|
|
|
|
|
|
2012 |
|
|
3,883 |
|
|
107,054 |
|
|
2,486 |
|
|
68,539 |
|
2013 |
|
|
6,418 |
|
|
176,944 |
|
|
3,081 |
|
|
84,943 |
|
2014 |
|
|
4,507 |
|
|
124,258 |
|
|
2,885 |
|
|
79,539 |
|
Kevin T. Paul |
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
|
|
2,043 |
|
|
56,326 |
|
|
1,307 |
|
|
36,034 |
|
2012 |
|
|
854 |
|
|
23,545 |
|
|
546 |
|
|
15,053 |
|
2013 |
|
|
4,512 |
|
|
124,396 |
|
|
2,165 |
|
|
59,689 |
|
2014 |
|
|
3,165 |
|
|
87,259 |
|
|
2,025 |
|
|
55,829 |
|
- (1)
- Restricted
Stock Unit ("RSU") grants under the Company's 2010 Equity Incentive Plan are divided equally into time-based RSUs and performance-based RSUs. The
time-based RSUs vest in equal installments over a four-year period. In the case of the time- based RSUs awarded in 2014, for example, vesting will take place on March 12, 2015, March 12,
2016, March 12, 2017, and March 12, 2018. Performance-based RSUs vest in three equal installments over a four-year period subject to meeting total shareholder return and financial
performance goals. The number of unearned RSUs assumes that the maximum performance goals were achieved. See "2010 Equity Incentive Plan" above.
- (2)
- The
market value of the restricted stock units that have not vested was determined by multiplying the number of units that have not vested by the closing
price of our common stock on December 31, 2014, which was $27.57 per share. Dollar values rounded up to the nearest whole dollar.
30
Table of Contents
Option Exercises and Stock Vested
The following table sets forth the number of shares acquired on vesting of restricted stock units by each of the Named Executive
Officers during the fiscal year ended December 31, 2014. The table also presents the value realized upon such vesting, as calculated based on the closing price per share of our common stock on
the vesting date. Amounts presented in the "Value Realized on Vesting" column under "Stock Awards" do not necessarily mean that the Named Executive Officer has actually sold the vested shares for
cash. None of our Named Executive Officers was granted or exercised stock options during the fiscal year ended December 31, 2014.
|
|
|
|
|
|
|
|
|
|
Stock Awards |
|
Name
|
|
Number of
Shares
Acquired on
Vesting (#) |
|
Value
Realized on
Vesting ($) |
|
Eric K. Yeaman |
|
|
66,965 |
|
|
1,987,450 |
|
Scott K. Barber |
|
|
13,867 |
|
|
379,317 |
|
Robert F. Reich |
|
|
14,649 |
|
|
416,461 |
|
John T. Komeiji |
|
|
14,215 |
|
|
403,940 |
|
Kevin T. Paul |
|
|
4,011 |
|
|
116,519 |
|
Pension Benefits
None of the Named Executive Officers participate in or have account balances in the Hawaiian Telcom Management Pension Plan.
Nonqualified Deferred Compensation
None of the Named Executive Officers participate in or have account balances in a non-qualified defined contribution plan or other
deferred compensation plan maintained by the Company.
Potential Payments on Termination or Change in Control
The Named Executive Officers are entitled to receive payments upon certain terminations under the Hawaiian Telcom Holdco, Inc.
Executive Severance Plan ("Executive Severance Plan") and accelerated vesting of Restricted Stock Units upon certain terminations or a change of control under the Company's 2010 Equity Incentive Plan
and the respective Named Executive Officer's Restricted Stock Unit Grant Agreement, in each case as described in more detail below. As of December 31, 2014, none of the Named Executive Officers
were entitled to receive a cash payment in the event of a change in control of the Company.
Under each of the Named Executive Officers' respective employment agreement with us, the Named Executive Officer is eligible to
participate and receive the benefits under the Executive Severance Plan, currently administered by the Company's Compensation Committee. Under the Executive Severance Plan, participants have the right
to receive certain payments in the event of a termination by us without Cause, by them for Good Reason, or due to death or Disability (in each case as defined below). Our Executive Severance Plan was
amended and restated effective March 11, 2014, to incorporate the severance terms previously in Mr. Yeaman's Amended and Restated Employment Agreement dated as of April 5, 2010,
as amended, which was superseded as of October 28, 2014, by Mr. Yeaman's 2014 employment agreement. The Executive Severance Plan defines "Cause" as including any of the following facts
and circumstances: (i) the failure to follow a legal order of the Board of Directors that is not remedied within 30 days; (ii) gross or willful misconduct that causes or is
31
Table of Contents
reasonably
likely to cause damage to the Company; (iii) conviction of a felony or crime involving material dishonesty or moral turpitude; (iv) fraud or personal dishonesty involving
Company assets; or (v) unlawful use or possession of illegal drugs on the Company's premises or while performing the participant's duties to the Company. The Executive Severance Plan defines a
resignation for "Good Reason" as a resignation due to the occurrence of any of the following which occurs without the participant's written consent, provided that the requirements regarding advance
notice and an opportunity to cure are satisfied: (i) a material diminution in the authority, duties of the participant or the supervisor to whom he is required to report; (ii) the
Company's material breach of the Severance Plan or the participant's offer letter or employment agreement; or (iii) relocation of the participant's principal office to a location in excess of
100 miles from Honolulu, Hawaii. The Executive Severance Plan defines "Disability" as the absence of a participant from his duties to the company on a full-time basis for no less than a total of six
months during any twelve-month period, and results in death or continues or can be expected to continue for at least 12 months, as a result of incapacity due to mental or physical illness,
which determinations are made by a physician selected by the Company and acceptable to the participant or the participant's legal representative.
Under
the Executive Severance Plan, upon termination of Mr. Yeaman's employment either by us without Cause or by him for Good Reason as of December 31, 2014, provided he
delivers and does not revoke a waiver and release of claims against the Company, he is entitled to receive a lump sum equal to (i) two times the sum of his annual base salary and his annual
performance payment at the target level under the Performance Compensation Plan, (ii) continue to receive, for 12 months, coverage for himself and any dependents under the Company group
health benefit plans in which he was entitled to participate immediately prior to the date of termination, other than certain supplemental coverage plans available to senior executives, and
(iii) the amount of his annual performance payment under the Performance Compensation Plan deemed to be earned for the most recent fiscal year but not yet paid, in the event the termination
occurs after the beginning of the year but prior to the date of payment. The Executive Severance Plan also provides that, upon termination of Mr. Yeaman's employment due to his death or
Disability, he or his estate is entitled to receive a lump sum equal to his annual bonus under the Company's Performance Compensation Plan to the extent declared or earned but not yet paid for a
completed calendar year.
Upon
termination of any of Mr. Barber's, Mr. Reich's, Mr. Komeiji's or Mr. Paul's employment either by us without Cause or by him for Good Reason, in each
case provided he delivers and does not revoke a waiver and release of claims against the Company, he is entitled to (i) continue to receive, in separate and equal installment payments in
accordance with the Company's standard payroll procedures, his base salary for 12 months following termination, subject to termination in the event he breaches any of the covenants described in
his employment agreement, (ii) continue to receive for 12 months coverage for himself and any dependents under the Company group health benefit plans in which he was entitled to
participate immediately prior to the date of termination other than certain supplemental coverage plans available to senior executives, and (iii) a pro-rata portion of his performance payment
under the Performance Compensation Plan for the year of termination, to be paid at the same time as performance payments are paid to the other executive officers.
The Named Executive Officers also have the right to accelerate vesting of their unvested restricted stock units in the event of a
change in control of the Company as of December 31, 2014, or termination by us without cause, by them for good reason, or due to death or disability. For the Named Executive Officers, the terms
"cause", "good reason" and "disability" have the same meanings as in the Executive Severance Plan.
In
the event of a change in control, all unvested RSUs granted in or prior to 2012 and held by our Named Executive Officers (with the exception of unvested RSUs granted in 2010 to
Mr. Yeaman)
32
Table of Contents
would
vest immediately, with performance-based RSUs vesting at the target level. In the case of Mr. Yeaman, the unvested performance-based RSUs granted in 2010 would vest immediately subject to
achievement of the applicable performance goal as determined by the Compensation Committee at the time of the change in control, and the unvested time-based RSUs granted in 2010 and scheduled to vest
on the next vesting date would vest immediately on a pro-rated basis. In the case of RSUs granted in and after 2013 and held by our Named Executive Officers, including Mr. Yeaman, any unvested
time-based RSUs would vest immediately and the unvested maximum number of performance-based RSUs would vest immediately subject to achievement of the applicable performance goal as determined by the
Compensation Committee at the time of the change in control. In all cases, any contractual transfer restrictions applicable to any shares of common stock previously issued to our Named Executive
Officers upon vesting of performance-based RSUs would immediately lapse.
In
the event of death, disability, or termination of employment without cause or for good reason, with the exception of unvested RSUs granted in 2010 to Mr. Yeaman, unvested
time-based RSUs held by our Named Executive Officers that otherwise would have vested on the next vesting date would vest immediately on a pro-rated basis, and unvested performance-based RSUs held by
our Named Executive Officers that otherwise would have vested on the next determination date or vesting date, as applicable, subject to upon achievement of the applicable performance goal, would
remain outstanding and vest on such determination date or vesting date, as applicable, on a pro-rated basis. In the case of RSUs granted to Mr. Yeaman in 2010, death or disability would result
in the immediate vesting of both the unvested time-based RSUs scheduled to vest on the next vesting date and the unvested performance-based RSUs scheduled to vest on the next determination date, and
termination of employment without cause or for good reason would result in the immediate vesting of the unvested time-based RSUs scheduled to vest on the next vesting date, while the unvested
performance-based RSUs scheduled to vest on the next determination date would remain outstanding and would vest on
such determination date subject to achievement of the applicable performance goal. In all cases, any contractual transfer restrictions applicable to any shares of common stock previously issued to the
Named Executive Officers upon vesting of performance-based RSUs would immediately lapse. The following table
33
Table of Contents
reflects
the total payments that each Named Executive Officer would have received if the following triggering events had occurred on December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Termination
w/o Cause or
Resignation for
Good Reason |
|
Termination Upon
Death/Disability |
|
Change in
Control |
|
Eric K. Yeaman |
|
|
|
|
|
|
|
|
|
|
RSU Agreement(1) |
|
$ |
1,811,873 |
|
$ |
1,811,873 |
|
$ |
2,725,625 |
|
Severance Plan(2)(3) |
|
$ |
3,642,132 |
|
$ |
1,450,000 |
|
|
|
|
Scott K. Barber |
|
|
|
|
|
|
|
|
|
|
RSU Agreement(1) |
|
$ |
177,964 |
|
$ |
177,964 |
|
$ |
649,218 |
|
Severance Plan(2)(3) |
|
$ |
725,852 |
|
$ |
509,723 |
|
|
|
|
Robert F. Reich |
|
|
|
|
|
|
|
|
|
|
RSU Agreement(1) |
|
$ |
431,388 |
|
$ |
431,388 |
|
$ |
748,222 |
|
Severance Plan(2)(3) |
|
$ |
572,877 |
|
$ |
390,747 |
|
|
|
|
John T. Komeiji |
|
|
|
|
|
|
|
|
|
|
RSU Agreement(1) |
|
$ |
398,359 |
|
$ |
398,359 |
|
$ |
634,689 |
|
Severance Plan(2)(3) |
|
$ |
572,922 |
|
$ |
387,290 |
|
|
|
|
Kevin T. Paul |
|
|
|
|
|
|
|
|
|
|
RSU Agreement(1) |
|
$ |
157,976 |
|
$ |
157,976 |
|
$ |
353,172 |
|
Severance Plan(2)(3) |
|
$ |
430,632 |
|
$ |
266,113 |
|
|
|
|
- (1)
- Represents
the value, based on the closing price of the Company's common stock on December 31, 2014, of the number of RSUs that could have vested
upon the occurrence of the respective triggering event assuming target performance goals were achieved pursuant to the Named Executive Officers' Restricted Stock Unit Grant Agreement ("RSU
Agreement").
- (2)
- Represents
the sum of cash payments payable under the Hawaiian Telcom Holdco, Inc. Executive Severance Plan upon the occurrence of the respective
triggering event assuming target performance goals were achieved under the Performance Compensation Plan.
- (3)
- Includes
health insurance costs for 12 months, estimated to be approximately $17,132 for each of Mr. Yeaman and Mr. Komeiji, $12,129
for each of Mr. Barber and Mr. Reich, and $16,619 for Mr. Paul.
Each
respective employment agreement prohibits the Named Executive Officer from competing with us or soliciting our employees and customers during the term of his employment and for one
year (two years in the case of Mr. Yeaman) following the termination of his employment or the expiration of his term of employment, whichever is longer. Each employment agreement also places
restrictions on the dissemination by the Named Executive Officer of confidential or proprietary information.
Compensation of Directors
The compensation of directors is determined by the full Board. The Compensation Committee annually reviews the non-employee director
compensation (including cash retainer, cash meeting fees and equity awards) and recommends to the full Board for adoption any
changes to such compensation. Changes to non-employee director compensation are made to ensure that their compensation levels are market-competitive and that the compensation structure supports our
business objectives, aligns the directors' interests with those of our stockholders, and reflects competitive best practices.
34
Table of Contents
In January 2013, pursuant to the request of the Compensation Committee, Pay Governance completed an evaluation of the Company's non-employee director
compensation. Consistent with the recommendations of Pay Governance based on such evaluation, the Company's non-employee directors receive an annual cash retainer of $50,000 (an additional $30,000 if
also serving as Chairman of the Board); an additional annual fee if also serving as Chairperson of a committee of the Board ($15,000 for the Audit Committee, $10,000 for the Compensation Committee,
$7,500 for the Nominating and Governance Committee, and $5,000 for the Executive Committee); annual equity grants valued at $45,000 (an additional $35,000 if also serving as Chairman of the Board);
and an attendance fee of $1,500 per Board or committee meeting attended in person or telephonically.
The
following table sets forth a summary of the compensation earned by our non-employee directors during the fiscal year ended December 31, 2014.
Director Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned
or Paid
in Cash
($) |
|
Stock
Awards
($)(2)(3) |
|
Option
Awards
($) |
|
Non-Equity
Incentive
Plan
Compensation
($) |
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings |
|
All Other
Compensation
($) |
|
Total
($) |
|
(a)(1)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
Kurt M. Cellar |
|
|
69,500 |
|
|
45,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114,775 |
|
Walter A. Dods, Jr. |
|
|
74,000 |
|
|
45,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119,275 |
|
Warren H. Haruki |
|
|
79,500 |
|
|
45,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
124,775 |
|
Richard A. Jalkut |
|
|
106,000 |
|
|
80,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
186,472 |
|
Steven C. Oldham |
|
|
86,000 |
|
|
45,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
131,275 |
|
Bernard R. Phillips III |
|
|
68,000 |
|
|
45,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,275 |
|
- (1)
- Mr. Yeaman
did not receive any additional compensation for his service on the Board of Directors.
- (2)
- "Stock
Awards" represent the aggregate grant date fair values, computed in accordance with Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") Topic 718, of restricted stock unit awards issued to non-employee directors pursuant to the 2010 Equity Incentive Plan. There can be no assurance that these grant date
fair values will ever be realized by the non-employee directors. For a discussion of the valuation assumptions, see Note 11 to our consolidated financial statements included in our Annual
Report on Form 10-K for the year ended December 31, 2014.
- (3)
- As
of December 31, 2014, Richard Jalkut had 3,243 unvested RSUs, and ach of the other directors (except Mr. Yeaman) had 1,771 unvested RSUs.
Compensation Committee Interlocks and Insider Participation
The members of our Compensation Committee are Messrs. Haruki (Chairman), Dods, and Phillips. None of the members of our
Compensation Committee serves, or has served during the last completed fiscal year, as an officer or employee of the Company. None of our executive officers currently serves, or during the past fiscal
year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers who serve on our Board or Compensation Committee.
Certain Relationships and Related Transactions
The Company has a written Code of Business Conduct and conflict of interest policies that require employees to disclose any actual or
perceived conflict of interest and any material transaction that
35
Table of Contents
could
be expected to give rise to a conflict of interest, including a potential related party transaction. In the case of the Company's executive officers, any potential conflict of interest must be
reported to and reviewed by the Chief Executive Officer, or if the potential conflict of interest involves a material amount, by the Board of Directors. The Chief Executive Officer or the Board, as
the case may be, will make a determination whether a violation of the code of conduct has occurred based on consideration of all relevant facts and circumstances. In the event of a violation,
employees may be disciplined up to and including dismissal. Directors also are required, pursuant to the Code of Conduct of the Board of Directors of the Company, to disclose any situation that
involves, or may reasonably be expected to involve, a conflict of interest with the Company. Such disclosure must be made promptly to the Chairman of the Nominating and Governance Committee.
OTHER INFORMATION
Stockholder Proposals for the 2016 Annual Meeting
Proposals of stockholders intended to be presented pursuant to Rule 14a-8 under the Exchange Act at the Company's Annual Meeting
in 2016 must be received at the Company's headquarters on or before November 20, 2015 in order to be considered for inclusion in the 2016 Proxy
Statement and proxy. In order for proposals of stockholders made outside of Rule 14a-8 under the Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c) under the
Exchange Act, such proposals must be received at the Company's headquarters not later than November 24, 2015. The Company's Bylaws require that proposals of stockholders made outside of
Rule 14a-8 under the Exchange Act be submitted, in accordance with Section 2.9 of the Bylaws, not earlier than January 7, 2016 and not later than February 6, 2016;
provided, however, that in the event the 2016 Annual Meeting is called for a date that is not within 30 days before or after the anniversary date of the 2015 Annual Meeting, notice by the
stockholders in order to be timely must be received by the Company not later than the close of business on the 10th day following the day on which notice of the date of the 2016 Annual Meeting
was mailed or public disclosure of the date of the 2016 Annual Meeting was made, whichever occurs first.
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly
come before the Annual Meeting or any adjournments or postponements thereof, the Board intends that the persons named in the proxies will vote upon such matters in accordance with their best judgment.
|
|
|
|
|
By Order of the Board of Directors |
|
|
/s/ SEAN K. CLARK
Sean K. Clark Secretary |
Dated:
March 23, 2015
36
Table of Contents
Appendix A
Schedule of Adjusted EBITDA Calculation
(Unaudited, dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Three Months
Ended
December 31, |
|
For the Year
Ended
December 31, |
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
Net income |
|
$ |
1,976 |
|
$ |
2,629 |
|
$ |
8,099 |
|
$ |
10,488 |
|
Income tax provision |
|
|
1,755 |
|
|
3,261 |
|
|
5,910 |
|
|
8,782 |
|
Interest expense and other income and expense, net |
|
|
4,088 |
|
|
4,157 |
|
|
16,462 |
|
|
22,501 |
|
Depreciation and amortization |
|
|
20,693 |
|
|
18,769 |
|
|
78,014 |
|
|
77,301 |
|
Gain on sale of property |
|
|
|
|
|
|
|
|
|
|
|
(6,546 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
28,512 |
|
|
28,816 |
|
|
108,485 |
|
|
112,526 |
|
Non-cash stock compensation |
|
|
1,108 |
|
|
850 |
|
|
4,174 |
|
|
2,736 |
|
SystemMetrics earn-out |
|
|
272 |
|
|
|
|
|
1,087 |
|
|
|
|
Non-recurring costs |
|
|
402 |
|
|
695 |
|
|
2,448 |
|
|
2,553 |
|
Severance costs |
|
|
197 |
|
|
|
|
|
197 |
|
|
712 |
|
Wavecom integration costs |
|
|
87 |
|
|
374 |
|
|
339 |
|
|
1,343 |
|
Storm Iselle costs |
|
|
134 |
|
|
|
|
|
1,077 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
30,712 |
|
$ |
30,735 |
|
$ |
117,807 |
|
$ |
119,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A-1
|
Signature of
Stockholder Date: Signature of Stockholder Date: Note: Please sign exactly as
your name or names appear on this Proxy. When shares are held jointly, each
holder should sign. When signing as executor, administrator, attorney,
trustee or guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person. To change the address on your account,
please check the box at right and indicate your new address in the address
space above. Please note that changes to the registered name(s) on the
account may not be submitted via this method. 1. Election of Directors: O
Richard A. Jalkut O Kurt M. Cellar O Walter A. Dods, Jr. O Warren H. Haruki O
Steven C. Oldham O Bernard R. Philips III O Eric K. Yeaman
2. To approve Amended and Restated Bylaws to increase the maximum number of
directors that may constitute our Board of Directors from seven to nine and
to clarify that the number of directors within the specified range that
constitute the Board is determined by resolution of the Board of Directors.
3. To ratify the selection of Deloitte & Touche
LLP as the Companys independent registered public accounting firm for the
fiscal year ending December 31, 2015. THIS PROXY WILL BE VOTED AS DIRECTED,
OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR PROPOSAL NOS. 2 AND 3. FOR AGAINST ABSTAIN FOR ALL NOMINEES
WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below)
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s),
mark FOR ALL EXCEPT and fill in the circle next to each nominee you wish to
withhold, as shown here: JOHN SMITH 1234 MAIN STREET APT. 203 NEW YORK, NY
10038 NOMINEES: ANNUAL MEETING OF STOCKHOLDERS OF HAWAIIAN TELCOM HOLDCO, INC. may 1, 2015 INTERNET - Access www.voteproxy.com and follow the on-screen instructions
or scan the QR code with your smartphone.
Have your proxy card available when you access the web page. TELEPHONE - Call
toll-free 1-800-pROXiEs (1-800-776-9437) in the United States or
1-718-921-8500 from foreign countries from any touch-tone telephone and
follow the instructions. Have your proxy card available when you call. Vote
online/phone until 11:59 PM EST the day before the meeting. mail - Sign, date and mail your proxy card in the envelope
provided as soon as possible. IN PERSON - You may vote your shares in person
by attending the Annual Meeting. GO GREEN -
e-Consent makes it easy to go paperless. With e-Consent, you can quickly
access your proxy material, statements and other eligible documents online,
while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. PROXY VOTING
INSTRUCTIONS Please detach along perforated line and mail in the envelope
provided IF you are not voting via telephone or the Internet. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL NOS. 2 AND 3. PLEASE SIGN, DATE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE X 20730030000000000000 2 050115 COMPANY NUMBER ACCOUNT NUMBER NOTICE OF
INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy
statement and proxy card are available at http://ir.hawaiiantel.com
FOR AGAINST ABSTAIN
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0 14475
HAWAIIAN TELCOM HOLDCO, INC. proxy for annual
meeting of stockholders on May 1, 2015 THIS PROXY IS SOLICITED BY THE BOARD
OF DIRECTORS OF THE COMPANY The undersigned hereby appoints Richard A. Jalkut and Eric K. Yeaman, and
each of them, with power to act without the other and with power of
substitution, as proxies and attorneys-in-fact and hereby authorizes them to
represent and vote, as provided on the other side, all the shares of Hawaiian
Telcom Holdco, Inc. Common Stock which the
undersigned is entitled to vote, and, in their discretion, to vote upon such
other business as may properly come before the Annual Meeting of Stockholders
of the Company to be held May 1, 2015 or at any adjournment or postponement
thereof, with all powers which the undersigned would possess if present at
the Meeting. (continued and to be signed on the
reverse side.) 1.1
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ANNUAL MEETING
OF STOCKHOLDERS OF HAWAIIAN TELCOM HOLDCO, INC. May
1, 2015 NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of
Meeting, proxy statement and proxy card are available at http://ir.hawaiiantel.com Please sign, date and mail your proxy
card in the envelope provided as soon as possible. Signature of Stockholder
Date: Signature of Stockholder Date: Note: Please sign exactly as your name
or names appear on this Proxy. When shares are held jointly, each holder
should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title
as such. If signer is a partnership, please sign in partnership name by
authorized person. To change the address on your account, please check the
box at right and indicate your new address in the address space above. Please
note that changes to the registered name(s) on the account may not be
submitted via this method. 1. Election of Directors O Richard A. Jalkut O Kurt M. Cellar O Walter A. Dods,
Jr. O Warren H. Haruki O Steven C. Oldham O Bernard
R. Philips III O Eric K. Yeaman 2. To approve
Amended and Restated Bylaws to increase the maximum number of directors that
may constitute our Board of Directors from seven to nine and to clarify that
the number of directors within the specified range that constitute the Board
is determined by resolution of the Board of Directors. 3. To ratify the
selection of Deloitte & Touche LLP as the
Companys independent registered public accounting firm for the fiscal year
ending December 31, 2015. THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND
FOR PROPOSAL NOS. 2 AND 3. FOR AGAINST ABSTAIN FOR ALL NOMINEES WITHHOLD
AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below)
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s),
mark FOR ALL EXCEPT and fill in the circle next to each nominee you wish to
withhold, as shown here: NOMINEES: THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSAL NOS. 2
AND 3. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE X Please detach
along perforated line and mail in the envelope provided. 20730030000000000000
2 050115 GO GREEN e-Consent makes it easy to go paperless. With e-Consent,
you can quickly access your proxy material, statements and other eligible
documents online, while reducing costs, clutter and paper waste. Enroll today
via www.amstock.com to enjoy online access. FOR
AGAINST ABSTAIN
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Hawaiian Telcom Holdco, Inc. (delisted) (NASDAQ:HCOM)
過去 株価チャート
から 7 2024 まで 8 2024
Hawaiian Telcom Holdco, Inc. (delisted) (NASDAQ:HCOM)
過去 株価チャート
から 8 2023 まで 8 2024