Document:

Exhibit 10.5

 

 

 

 

 

 

 

 

 

 

 

CABLE ONE, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(A Continuation of the Graham Holdings Company

Supplemental Executive Retirement Plan)

July, 2015

 

 

 

 

 

  

  

CABLE ONE, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Section 1.  Purpose.  This Plan, the Cable One, Inc. Supplemental Executive Retirement Plan (the “Plan”) is an unfunded plan established for the purpose of provid­ing deferred compensation for a select group of manage­ment or highly compensated employees, in order to induce employees of outstanding ability to continue in the employ of the Company by providing them with supplemental benefits notwithstanding the limitations imposed by the Code on pension and other retirement benefits from tax qualified plans.

This Plan is a spin off and continuation of The Graham Holdings Company Supplemental Executive Retirement Plan (the “Prior Plan”), with respect to Participants of the Prior Plan who were active participants immediately before the Effective Date and whose liabilities were spun off with the distribution by Graham Holdings Company (“Graham”) of its interest in Cable One, Inc. (such participants are referred to hereinafter as “Spin-off Participants”). It is the intent of the Company, as of the Effective Date, that the benefits in this Plan replicate the benefits from the Prior Plan as in effect immediately prior to the Effective Date, with no future accruals after the Effective Date, except for Employee Contributions through December 31, 2015, and the Plan shall be so interpreted. In addition, the Participant elections in effect immediately before the Effective Date in the Prior Plan shall be continue to be effective, as of the Effective Date, for this Plan.

This Plan is strictly a voluntary undertaking on the part of the Company and shall not be deemed to constitute a contract of employment or part of a contract between the Company and any Employee, nor shall it be deemed to give any Employee the right to be retained in the employ of the Company or to interfere with the right of the Company to discharge any Employee at any time, nor shall this Plan interfere with the right of the Company to establish the terms and conditions of employment of any Employee.

Benefits under this Plan shall be payable solely from the general assets of the Company and participants herein shall not be entitled to look to any source for payment of such benefits other than the general assets of the Company.

The Plan is intended to comply with Section 409A of the Code (“Section 409A”).  It is the intent of the Company that all benefits under the Plan shall either be exempt from Section 409A or compliant with Section 409A, and any ambiguity under the Plan shall be interpreted, to the extent possible, consistently with that objective.

Section 2.  Definitions.  As used in this Plan, the following words shall have the following meanings:

“401(a)(17) Limit” means Pension Plan and Savings Plan provisions adopted pursuant to Section 401(a)(17) of the Code to limit earnings considered for purposes of computing Pension Plan benefits and Savings Plan contributions.

 

 

 

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“415 Limit” means Pension Plan and Savings Plan provisions adopted pursuant to Section 415 of the Code to limit (i) annual Pension Plan benefits pursuant to Section 415(b) thereof, and (ii) annual additions to the Savings Plan pursuant to Section 415(c) thereof.

“Actuarial Equivalent” (or any similar term, whether or not capitalized) shall, except as otherwise provided herein, be determined using the actuarial assumptions specified in the Pension Plan for such purpose as of the Effective Date without regard to any future changes to such actuarial assumptions whether due to the passage of time, changes in laws or regulations, plan amendments or the issuance of new tables or updates to interest rates by the Internal Revenue Service.

“Affiliate” means an entity (including the Company) that is treated as part of a single employer with the Company under Section 414(b), (c), (m) or (o) of the Code. With respect to Spin-off Participants, prior to the Effective Date, the term “Affiliate” shall mean Graham and all other business entities that were, at such time, treated as a single employer with Graham under Sections 414(b), (c), (m) or (o) of the Code.

“Base Salary” means the regular basic compensation paid or payable to an employee during a calendar year by the Company (including earnings not payable by application of a salary reduction election made pursuant to Section 401(k), 125 or 132(f) of the Code or pursuant to this Plan, and including earnings not payable due to vacation purchase), but excluding any other items of compensation such as (i) bonuses and commissions, (ii) overtime, (iii) transportation benefit plan deferrals, (iv) compensation under the terms of the long‐term component of the Incentive Compensation Plan of the Company paid during such Plan Year, (v) workers’ compensation, (vi) amounts paid by the Company for insurance, retirement or other benefits, (vii) contributions or payments made by the Company under any employee benefit plan, or (viii) dismissal or other payments made to an Employee as a result of termination of employment. The Base Salary of an employee will include any payment made under any short-term disability income plan of the Company.

“Beneficiary” means the individual(s) or organization(s) designated by the Participant to receive any death benefits from this Plan, in accordance with procedures established by the Committee. In the case of benefits payable to a Surviving Spouse, only the Surviving Spouse may be the Beneficiary. In the case of other death benefits, if the Participant does not have a Surviving Spouse and has not named a Beneficiary, the Beneficiary shall be the Participant’s beneficiary in the Savings Plan, or applying the principles in the Savings Plan.

“Cash Balance Account” means the Pension Benefit corresponding to the Cash Balance Schedule in the Pension Plan.

“Code” means the Internal Revenue Code as it may be amended from time to time. References to the Code or any Section of the Code shall include any applicable regulations or rulings thereunder.

 

 

 

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“Committee” means a committee of one or more persons appointed by the Company to administer the Plan.

“Company” means Cable One, Inc., a Delaware corporation, and any successors in interest thereto. Where required by context the term Company includes Affiliates.

“Company Contribution” shall be an amount credited to the Participant’s Savings Account in Section 4 hereof, excluding Employee Contributions and Investment Credits. The Company Contribution is only a book-keeping entry and no actual cash contribution shall be required of the Company, other than payment of benefits to the Participant or Beneficiary at the time specified herein.

“Compensation” means the Base Salary of an employee plus, starting in 1988, bonuses awarded under the annual component of the Incentive Compensation Plan of the Company during a calendar year by the Company or an Affiliate. Bonuses (other than “Special Annual Incentive Awards”) awarded under the annual component of the Incentive Compensation Plan of the Company will be considered as part of Compensation for the year in which they are paid to the Employee, or would otherwise be paid but for the Employee’s election to defer receipt of payment under the Company’s Deferred Compensation Plan.

Special Rule for Bonuses. The rule in this paragraph shall apply solely for purposes of Section 3. Each Bonus includible in Compensation under the previous paragraph (“Bonus” or “Bonuses”) shall be included in Compensation in the year following the year in which the Bonus was earned (which, for avoidance of ambiguity, is normally the year in which such Bonus is paid). Notwithstanding the above, in the event a Participant’s benefit under Section 3 would be greater, every Bonus for the Participant shall be included in Compensation in the year in which such Bonus was earned.

“Effective Date” means the date this Plan is first effective, which shall be the day of the distribution by Graham of its interest in Cable One, Inc, which is expected to be on or about July 1, 2015.

“Employee” means a common law employee of the Company, provided however that an Employee who becomes an independent contractor shall continue to be an Employee to the extent required by Section 409A.

“Employee Contribution” shall mean the amount credited to a Participant’s Savings Account in respect of the Participant’s deferral of compensation. Employee Contributions are not actual contributions, but rather they represent credits to a notional account (the Savings Account) which is an unfunded obligation of the Company, and a reduction of the same amount to the taxable compensation paid to the Participant.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Investment Election” means an election made by the Participant selecting the investment credit factor(s) that will be applicable to his Savings Account. The Committee shall determine the manner in which Investment Elections may be made and the frequency with which such elections may be prospectively changed.

 

 

 

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“Normal Retirement Date” means the first day of the calendar month on or after the Participant’s 65th birthday.

“Participant” means an employee of the Company recommended by the Company’s senior management and designated a participant in this Plan by the Committee. No person, other than a Spin-off Participant, shall become a Participant in the Plan on or after the Effective Date.  All of the Spin-off Participants have been designated in the Prior Plan as both Pension Participants (eligible for benefits under Section 3) and Savings Participants (eligible for benefits under Section 4), as well as Executive Participants (eligible for the enhanced benefits in Section 4 relating to bonuses).

“Pension Plan” means The Retirement Plan for Graham Holdings Company as in effect immediately before the Effective Date, excluding the Secure Retirement Account, without regard to any amendments, and without regard to cost of living adjustments or other new regulations or regulatory updates after the Effective Date.

“Plan Year” means the calendar year.

“Prior Plan” means The Graham Holdings Company Supplemental Executive Retirement Plan as in effect immediately before the Effective Date.

“Qualified Cash Balance Account” means the Participant’s account in the Cash Balance Schedule in the Pension Plan.

“Savings Account” shall be the account established under Section 4 with respect to a Savings Participant, which shall consist of a Participant’s Savings Account in the Prior Plan immediately before the Spin-off, plus Employee Contributions through December 31, 2015, plus Investment Credits (which may be negative) credited after the Effective Date. The Savings Account is only a book-keeping entry and no actual cash or investments shall be required to be set aside by the Company, other than payment of benefits to the Participant or Beneficiary at the time specified herein.

“Savings Plan” means the defined contribution retirement plan qualified under Section 401(k) of the Code covering Employees of the Company. In the event that there is more than one such plan, the Committee shall determine which such plan is the Savings Plan for purposes of this Plan. Before the Effective Date, the term Savings Plan shall mean The Savings Plan for GHC Divisions.

“Service” means the period of employment by the Company or an Affiliate (excluding both service prior to the time an Affiliate became such and service after the time an Affiliate is no longer such).

 

 

 

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“Spin-off” means the distribution by Graham Holdings Company (“Graham”) of its interest in Cable One, Inc. as of the Effective Date.

“Spin-off Participant” means an Employee of Cable One, Inc. or an Affiliate on the Effective Date, after the Spin-off, who was a Participant in the Prior Plan immediately before the Effective Date. For avoidance of doubt, Spin-off Participants include Thomas O. Might, Julie M. Laulis, Stephen A. Fox, and there are no other Spin-off Participants.

“Surviving Spouse” means the surviving husband or wife of a Participant, who has been married to the Participant throughout the one-year period ending on the date of the death of the Participant.

“Termination” (relating to termination of employment) shall mean a separation from service in accordance with Section 409A. A separation from service will be deemed to occur at any time that an Employee and the Committee reasonably anticipate that the bona fide level of services the Employee will perform (whether as an employee or an independent contractor) for the Company will be permanently reduced to a level that is less than 50 percent of the average level of bona fide services the Employee performed during the immediately preceding 36 months (or the entire period the Employee has provided services if the Employee has been providing services to the Company for less than 36 months).

Section 3.  Pension Benefit.

(a)            (i) All Spin-off Participants are vested in their Pension Benefits (except as provided in Section 7 hereof), having earned 10 or more Years of Vesting Service in the Prior Plan.

(ii) Each vested Participant shall be paid a supplemental annual retirement benefit (the “Pension Benefit”) under this Plan equal in amount to the difference between (i) the aggregate annual benefits payable to the Participant under the Pension Plan (the “Qualified Pension Benefit”) and (ii) the aggregate annual benefits that would be payable to the Participant under the Pension Plan if the 415 Limit and 401(a)(17) Limit were not contained therein (the “Unrestricted Benefit”), in each case with the accrued benefit determined as of the Effective Date. If a vested Participant dies before the presumptive retirement date (as specified in subsection (b) below) and the Surviving Spouse is entitled to a spouse’s benefit under the Pension Plan, the Surviving Spouse shall be paid a benefit (the “Pension Benefit”) hereunder equal to the difference between (i) the aggregate spouse’s benefits payable to such Surviving Spouse under the Pension Plan (the “Qualified Pension Benefit”) and (ii) the aggregate spouse’s benefit that would be payable to such Surviving Spouse under the Pension Plan if the 415 Limit and 401(a)(17) Limit were not contained therein (the “Unrestricted Benefit”), in each case with the Participant’s accrued benefit determined as of the Effective Date.

 

Notwithstanding the foregoing, in the case of a person who becames a Participant in the Prior Plan after December 31, 2009, the Unrestricted Benefit shall (except for purposes of vesting) be computed taking into account only Service and compensation earned while a Participant in the Prior Plan.

 

 

 

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(iii)             In the case of an Executive Participant, in the calculation of the Unrestricted Benefit, Compensation rather than Base Salary will be used. For the avoidance of doubt, all Spin-off Participants are Executive Participants.

(b)             (i)            The Pension Benefit shall be determined as if the Qualified Pension Benefit is payable as a life annuity and actually commences on the “presumptive retirement date,” which shall be the latest of the following dates: (i) the first day of the month on or after the Participant’s Termination of employment; or (ii) the first day of the month on or after the date the Participant attains age 55. The Pension Benefit shall be determined as if it commenced on the presumptive retirement date, but the first payment shall be made no earlier than the first day of the seventh month following Termination of employment (the “actual commencement date”), and on the actual commencement date, a number of monthly payments shall be made equal to the number of months from the presumptive retirement date to the actual commencement date, inclusive, with one monthly payment made on the first day of each month thereafter. The Pension Benefit shall be considered a series of separate payments for purposes of Section 409A. The Pension Benefit shall be payable in the form of a life annuity, provided however that the Participant may elect, at any time prior to the presumptive retirement date, to have the Pension Benefit paid in the form of any other actuarially equivalent annuity that is permitted under the Pension Plan, but only if such election is permitted by Section 409A.

(ii)  The portion of the Qualified Pension Benefit attributable to the Qualified Cash Balance Account shall be determined as a single life annuity that is Actuarially Equivalent to the Qualified Cash Balance Account, with such actuarial equivalent determined using the interest rate specified in Section 417(e) of the Code (as determined in the Pension Plan) plus 2%.  In the event the Pension Benefit commences prior to Normal Retirement Date or is payable in a form other than an annuity for the life of the Participant only, the Pension Benefit shall be actuarially adjusted in the same manner as are benefits payable under the Pension Plan.

(c)            Notwithstanding (a) and (b) above, in the event the Actuarial Equivalent present value of the Pension Benefit as of the commencement date is less than $5,000, such benefit shall be paid in the form of a single lump sum equal to such Actuarial Equivalent present value on the date the annuity would otherwise commence. The present value of the annuity benefit shall be determined using the actuarial assumptions in the definition of “Actuarial Equivalent” herein except that the present value of any benefit determined with respect to the Cash Balance Account shall be the amount of such Cash Balance Account.  This subsection (c) shall apply only so long as it is permissible under regulations or rulings under Section 409A.

Section 4.  Savings Plan Benefit.

(a)            The amount of a Participant’s Savings Account under this Plan shall be the sum of: (i) Employee Contributions, (ii) Company Contributions, and (iii) Investment Credits accrued thereon through to the day before the Effective Date, all accumulated under the Prior Plan, plus (iv) Employee Contributions from the Effective Date to December 31, 2015, and (v) Investment Credits from the Effective Date to the date of determination. Investment Credits shall be credited on the amount of a Participant’s Savings Account at the end of such Plan Year or on such other basis as may be approved by the Committee in accordance with the Participant’s Investment Election. The Company Contribution earned by the Participant in the Prior Plan for 2015, through the day before the Effective Date, shall be credited to the Participant’s Savings Account as of January 1, 2016. No Company Contributions shall be earned by a Participant on or after the Effective Date. Employee Contributions for the period from the Effective Date to December 31, 2015 shall be determined in accordance with the Participant’s election in the Prior Plan for 2015, which in general specifies a percentage of Base Salary in excess of the 401(a)(17) Limit for the year. In calculating the Employee Contribution, Base Salary paid before the Effective Date shall be considered in determining whether the Participant’s Base Salary exceeds the 401(a)(17) Limit.

 

 

 

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(b)            The Committee shall establish one or more investment options for the Participants’ Investment Elections. Such investment options may be actual investment funds or investment indexes, however, in either case, the Company shall not be required to set aside any money in such options. In the event a Participant fails to complete a valid Investment Election, his Savings Account will be credited with the Investment Credit amounts equivalent to the rates of return generated by the money market option, or the most similar investment option offered by the Committee.

(c)            The Savings Account shall be fully vested and, except as provided in Section 7 hereof, nonforfeitable.

(d)            No withdrawal of funds in a Participant’s Savings Account for hardship or any other reason may be made before his Termination of employment. The amount of the Savings Account shall be paid to the Participant in cash on the first day of the seventh month following Termination of employment.

(e)            A Participant shall designate a Beneficiary to receive the unpaid portion of his Savings Account in the event of his death.  Upon the death of the Participant, the unpaid portion of his Savings Account shall be payable on the first day of the following month, in a single lump sum.

 

Section 5.  Funding.  Benefits under this Plan shall not be funded in order that the Plan may be exempt from certain provisions of ERISA. The Committee shall maintain records of Savings Accounts and records for the calculation of the Pension Benefit.  

Section 6.  Administrative Provisions.

(a)            Administration. This Plan shall be administered by the Committee. All decisions and interpre­tations of the Committee shall be conclusive and binding on the Company, and the Participants.

 

 

 

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(b)            Amendment. The Plan may be amended or terminated by the Company at any time and any Participant may have his or her designation as such terminated by the Company at any time; provided, however, that no such amendment or termination or change in designation shall deprive any Participant of benefits accrued to the date of such amendment or termination without the consent of the Participant.

(c)            Claims Procedure.  If a Participant or Beneficiary (“Claimant”) has a complaint about the Plan’s operation or about Plan benefits, the Claimant has the right to have the complaint reviewed by the Committee. All complaints and claims for benefits must be submitted in writing. All such complaints must be submitted within the “applicable limitations period.” The applicable limitations period is two years, beginning on (i) the date on which the payment was made or denied, or (ii) for all other claims, the date on which the action complained or grieved of occurred.

If a Claimant has applied for a benefit under the Plan and that claim as been denied, in whole or in part, the Claimant has the right to a review of the denial.

Within 60 days after a claim is received, the Claimant will be notified in writing by the Committee of its decision. If special circumstances require an extension of up to 60 additional days of time for processing, the Committee will provide written notice of the extension prior to the expiration of the initial 60-day period. If the claim is denied or partially denied, the written notice will outline:

	
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The specific reasons for the denial,

	
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The provisions of the Plan on which the denial is based,

	
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The procedures for having the request reviewed, and

	
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Additional information needed to process the request and an explanation of why this information is necessary.

The Claimant may ask for a review of the denied request within 60 days after receipt of the notice of denial. If an appeal is not filed within this 60-day period, an appeal cannot be filed at a later date, nor shall any other remedy be available.

To appeal a denial a Claimant must request a review by the Committee, or an appeals committee appointed by the Committee. Any such request must be in writing and include:

	
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The reasons that support the claim,

	
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The reasons the claim should not have been denied,

	
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All written evidence that supports the claim, and

	
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Any other appropriate issues or comments.

The appeal must include all documentary evidence necessary to support the claim and must state the reasons that the Claimant is eligible for the benefit claimed. The appeals committee will make its decision based on the record and the arguments that are presented, including any evidence presented in the initial claim.

 

 

 

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A Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to a claim. If this information is requested in order to perfect an appeal, or to file a claim, and there is a delay in providing it, the applicable time limits will be extended by the period of the delay. A Claimant may also request in writing that copies of the Plan document be made available for examination.

The Committee normally will reach a decision no later than 60 days after it receives a request for review. If needed, the Committee will send a written notice of an extension of this period of up to 60 additional days. The Committee’s decision will be in writing and will include specific reasons for the decision and references to the Plan provisions that apply.

Legal action may not be brought against the Committee or the Company without first pursuing this claims procedure. Any legal action to recover a benefit under this Plan must be filed within one year of the Committee’s decision on appeal. Failure to file suit within this time period will extinguish any right to benefits under the Plan.

(d)            Recovery of Payroll Taxes and Other Amounts. In the event that the Company pays the employee portion of any FICA or payroll tax, or any other amount with respect to benefits under this Plan, that should have been paid by the Participant or should have been reimbursed to the Company by the Participant, the following rules shall apply. The Company shall make a diligent effort to collect such amount from the Participant, consistent with the amount involved and the likelihood of success (specifically, the Company shall not be required to expend an amount in such collection effort that is disproportionate to the amount anticipated to be collected). If the Company is not successful in such collection effort, the Company shall collect (or “offset”) such amount out of the next future benefit to be paid to the Participant. Any such offset shall not affect the amount reported to the IRS or any other taxing authority as a taxable benefit paid to the Participant. By way of clarification of the preceding sentence, the amount reported as a taxable distribution to the Participant on any date shall be the amount that would have been distributed to the Participant on such date had there been no offset.

Section 7.  Loss of Benefits.  Notwithstanding any other section of this Plan, if a Participant is discharged by the Company because of (i) conduct that the Participant knew or should have known was detrimental to legitimate interests of the Company, (ii) dishonesty, (iii) fraud, (iv) misappropriation of funds or confidential, secret or proprietary information belonging to the Company, or (v) commission of a crime, such Partici­pant’s rights to any benefits under this Plan shall be forfeited; except that such Participant shall be entitled to receive the aggregate amount of his Employee Contributions, without any Investment Credits (unless such Investment Credits, in the aggregate, are negative).

Section 8.  Nonassignability.  No Participant or Beneficiary shall have the right to assign, pledge or otherwise dispose of any benefits payable to him hereunder nor shall any benefit hereunder be subject to garnishment, attachment, transfer by operation of law, or any legal process, other than a qualified domestic relations order (as defined in Section 414(p) of the Code).

 

 

 

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Section 9.  Limitation of Liability.  The Company’s sole obligation under this Plan is to pay the benefits provided for herein and neither the Participant nor any other person shall have any legal or equitable right against the Company, the Committee or any officer or employee of the Company other than the right against the Company to receive such payments from the Company as provided herein.

Section 10.  Use of Masculine and Feminine; Singular and Plural.  Wherever used in this Plan, the masculine gender will include the feminine gender and the singular will include the plural, unless the context indicates otherwise.

IN WITNESS WHEREOF, the Company has caused this amendment and restatement of the Plan to be adopted on this   28th   day of  May , 2015.

 

 

	
 

	
Cable One, Inc.

	
 

	
 

	
 

	
 

	
 

	 			
	
 

	
By:

	
 /s/ Eric Lardy

	
 

	
 

	
 

	
 

	
 

	
 

	
Title:

	
VP of Strategy & Finance

	
 

	
 

	
 

	
 

	
 

  

 

 

 

10Exhibit 10.6

 

CABLE ONE, INC.

DEFERRED COMPENSATION PLAN

(A Continuation of the Graham Holdings Company

Deferred Compensation Plan)

 

July, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

CABLE ONE, INC.

DEFERRED COMPENSATION PLAN

Section 1.  Purpose.

This Deferred Compensation Plan (the “Plan”) is an unfunded plan established for the purpose of provid­ing a select group of management and other highly compensated employees the opportunity to defer the receipt of compensation payments that would otherwise become payable to them currently for the periods provided in the Plan.

This Plan is a spin off and continuation of the Graham Holdings Company Deferred Compensation Plan (the “Prior Plan”), with respect to Participants of the Prior Plan who were active participants immediately before the Effective and whose liabilities were spun off with the distribution by Graham Holdings Company (“Graham”) of its interest in Cable One, Inc. (such participants are referred to hereinafter as “Spin-off Participants”). It is the intent of the Company, as of the Effective Date, that the benefits in this Plan replicate the benefits of the Prior Plan as in effect immediately prior to the Effective Date, with no future deferrals after December 31, 2015, and the Plan shall be so interpreted. The Participant elections in the Prior Plan in effect immediately before the Effective Date shall continue to be effective, as of the Effective Date, for this Plan.

This Plan is strictly a voluntary undertaking on the part of the Company and shall not be deemed to constitute a contract of employment or part of a contract between the Company and any Employee, nor shall it be deemed to give any Employee the right to be retained in the employ of the Company, or to interfere with the right of the Company to discharge any Employee at any time, or to establish the terms and conditions of employment of any Employee.

Benefits from this Plan shall be payable solely from the general assets of the Company and Participants herein shall not be entitled to look to any source for payment of such benefits other than the general assets of the Company.

The Plan is intended to comply with Section 409A of the Code (“Section 409A”). It is the intent of the Company that all benefits under the Plan shall either be exempt from Section 409A or compliant with Section 409A, and any ambiguity under the Plan shall be interpreted, to the extent possible, consistently with that objective.

 

Section 2.  Definitions.

As used in this Plan, the following words shall have the following meanings:

“Account” is the Participant’s account in the Plan, consisting of Employee Contributions and Investment Credits thereon. A Participant’s Account may include separate subaccounts representing the value of a Participant’s Employee Contribution (and Investment Credits thereon) with respect to each Plan Year, and with respect to any amounts that are payable at different times or in different forms.

“Affiliate” means an entity (including the Company) that is treated as part of a single employer with the Company under Section 414(b), (c), (m) or (o) of the Code. With respect to Spin-off Participants, prior to the Effective Date, the term “Affiliate” shall mean Graham and all other business entities that were, at such time, treated as a single employer with Graham under Sections 414(b), (c), (m) or (o) of the Code.

 

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“Annual Incentive Compensation” means any bonus awarded to a Participant and payable in cash under the Company’s Incentive Compensation Plan or any other annual bonus program maintained by the Company or any other Affiliate.

“Beneficiary” means the person, persons or entity designated in writing by the Participant to receive his Account in the event of his death. If no effective designation of beneficiary is on file with the Committee, then such amounts that would otherwise be payable to a Beneficiary will be paid to the surviving spouse of the Participant, or, if there is no surviving spouse, then to the Participant’s estate.

“Code” means the Internal Revenue Code of 1986, as amended from time to time. References in the Plan to any Section of the Code shall include any successor provisions thereto. References to sections of the Code, or to the Code itself, shall include any applicable regulations and rulings thereunder, and any amendments thereto.

“Committee” means a committee of one or more persons appointed by the Company to administer the Plan.

“Company” means Cable One, Inc., a Delaware corporation, and any successors in interest thereto. Where required by context the term Company includes Affiliates.

“Controlled Group” means the Company and all Affiliates.

“Effective Date” means the date this Plan is first effective, which shall be the day of the distribution by Graham of its interest in Cable One, Inc, which is expected to be on or about July 1, 2015.

“Employee” means a common law employee of the Controlled Group, provided however that an Employee who becomes an independent contractor shall continue to be an Employee to the extent required by Section 409A.

“Employee Contribution” means the portion of the Participant’s Incentive Compensation for a particular Plan Year which the Participant elects in writing to defer hereunder.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Incentive Compensation” means Annual Incentive Compensation and Long-Term Incentive Compensation.

“Investment Credit” means the amount credited to the Account of a Participant based on the balance of the Participant’s Account and the performance of the Investment Options the Participant has selected in his Investment Election.

“Investment Election” means an election filed by a Participant selecting the Investment Options that will be applicable to the Account of the Participant. The Committee shall determine the manner in which Investment Elections may be made and the frequency with which such elections may be prospectively changed.

 

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“Investment Option” means a fund or index, as described in Section 4, to which a Participant may elect to have his Account, or a portion of his Account, indexed as if funds were actually so invested.

“Long-Term Incentive Compensation” means any bonus awarded to a Participant and payable in cash under the Performance Unit provisions of the Company’s Incentive Compensation Plan or another special long-term incentive compensation plan maintained by the Company or an Affiliate that provides the opportunity for a cash bonus payment at the end of a specified period (no less than two years) based on the attainment of specific performance goals.

“Participant” means (i) an Employee designated a Participant in this Plan by the Committee. As of the Effective Date, a Spin-off Participant shall be a Participant in this Plan. No person, other than a Spin-off Participant, shall become a Participant in the Plan on or after the Effective Date.

“Plan Year” means a calendar year.

“Section 409A” means Section 409A of the Code.

“Separation from Service” means a separation from service as defined in Section 409A. In determining whether a Separation of Service has occurred, service as a Director is considered separately from service as an Employee. It is not considered a Separation from Service when a Participant is transferred from the Company to an Affiliate or from an Affiliate to the Company or another Affiliate. A Separation from Service as an Employee will be deemed to occur at any time that an Employee and the Committee reasonably anticipate that the bona fide level of services the employee will perform (whether as an employee or an independent contractor) will be permanently reduced to a level that is less than 50 percent of the average level of bona fide services the Employee performed during the immediately preceding 36 months (or the entire period the Employee has provided services if the Employee has been providing services to the Controlled Group for less than 36 months).

 

Section 3.  Deferral Elections

(a)            Subject to the limitations described below, each Participant may elect to have the payment of a specified amount or percentage of his Incentive Compensation deferred pursuant to this Plan as an Employee Contribution to his Account, provided that the Employee Contribution for a Participant for a Plan Year shall not be less than $10,000.

(b)            Timing of Receipt of Deferral Election. A deferral election must be an irrevocable written election made on a form prescribed by the Committee within a period of time specified by the Committee. The deferral election must actually be received by the Committee no later than: (1) in the case of Annual Incentive Compensation, December 31 preceding the Plan Year in which such Incentive Compensation is earned, and (2) in the case of Long-Term Incentive Compensation, December 31 preceding the first Plan Year in the period for which such Incentive Compensation is earned. Notwithstanding the foregoing, in the event any Incentive Compensation (i) constitutes performance-based compensation under Section 409A, and (ii) is payable with respect to any period of at least 12 months, the deferral election may be received no later than six months before the end of the period for which such Incentive Compensation is earned, provided that the Participant performs services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date a deferral election is made, and provided further that an election to defer performance-based compensation may not be made after such compensation has become readily ascertainable. In the event a Participant is first eligible under this Plan or any plan of deferred compensation of the Controlled Group, the deferral election must be received by the Committee no later than 30 days following the date the Participant first becomes eligible to participate in the Plan, and, except as otherwise permitted under Section 409A, such deferral election shall apply only to Incentive Compensation earned after the date of the Participant’s deferral election. The Committee may establish deadlines for receipt of deferral elections that are earlier (but not later) than the dates specified above. No deferral election may be filed at any time on or after the Effective Date. Deferral Elections from the Prior Plan carry over into this Plan.

 

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(c)            Payment Commencement Date and Payment Form. Each deferral election shall set forth the Payment Commencement Date and the Payment Form for the Employee Contribution for the calendar year covered by the election. The Payment Commencement Date and the Payment Form are not required to be the same for each calendar year. The Payment Commencement Date is limited as follows. The Participant may elect commencement to begin on a specified date or upon Separation from Service. In the event the Participant elects commencement upon Separation from Service, the Payment Commencement Date shall be the first day of the seventh month following Separation from Service. In the event the Participant elects commencement on a specified date, the specified date must be the first day of a calendar month, and if it is not, it will be deemed to be the first day of the calendar month containing the date specified by the Participant. A specified date must be an actual calendar date and cannot be the occurance of an event. A specified date may not be later than the first day of the calendar month immediately following the date the Participant attains age 65. With respect to elections applicable to Employee Contributions after December 31, 2013, if the Participant elects payment on a specified date, the Payment Commencement Date shall be the earlier of such specified date or the first day of the seventh calendar month following Separation from Service.

(d)            Payment Form. The Payment Form shall be, as elected by the Participant, a single lump sum or annual installments for a period not to exceed ten years. Each installment shall be equal to the Account Balance (or, as the case may be, the balance of the relevant subaccount) divided by the number of remaining installments, including the current installment. With respect to elections applicable to Employee Contributions after December 31, 2013, if the Participant elects payment on a specified date and annual installments, any balance remaining on the first day of the seventh calendar month following Separation from Service shall be paid to the Participant on such date.

(e)            Changes in Elections. After the latest date that a deferral election may be made, a Participant may not change the election, except as follows. A Participant may file a change in the Payment Commencement Date and/or Payment Form with respect to his deferral election for any Plan Year, provided that (1) such change will be given effect only if made at least 12 months before the previously elected Payment Commencement Date (or at least 12 months before actual Separation from Service if the previously elected Payment Commencement Date was based on Separation from Service), and (2) any such change must delay the Payment Commencement Date by a minimum of 60 months. With respect to elections under this subsection relating to installment payments, for purposes of applying Section 409A, a series of installment payments shall be treated as a single payment.

 

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(f)            The Committee may, from time to time, set limitations on the amount of a Participant’s Incentive Compensation which may be subject to deferral under this Plan, including but not limited to establishing annual limitations relating to particular employment positions or levels of Participants and/or compensation levels. Any applicable limitations will be set forth on the deferral election form relating to the Plan Year for which such limitations are applicable.

(g)            A Participant will be 100% vested in his Account at all times.

 

Section 4.  Treatment of Deferred Amounts.

(a)            The Company shall maintain on its books an Account for each Participant, and a separate subaccount for each Participant with respect to each Plan Year. The amount of any Employee Contribution shall be credited to the Participant’s Account on the date on which the Incentive Compensation would have been payable to the Participant but for the deferral under this Plan.

(b)            Each Participant’s Account shall be deemed to earn Investment Credits reflecting gains or losses in accordance with the Participant’s individual Investment Election. The Committee shall determine the Investment Options that will be offered, and may change such Investment Options from time to time. Such determination shall not be a fiduciary function and no Participant has any right to any particular Investment Option. For the avoidance of doubt, an Investment Option does not imply the actual investment of money in a particular fund, but rather represents a notional account representing the total amount of a Participant’s Account computed as if actual funds were so invested.

(c)            Each Participant must file an Investment Election at the time he first files a deferral election. A Participant may file a new Investment Election at and as of such times as the Committee shall determine. In the event a Participant fails to complete a valid Investment Election, his Account will be credited with the Investment Credits equivalent to the rates of return generated by the money market option (or most similar investment option) under the Company’s 401(k) plan.

(d)            The Company will credit Investment Credits (which may be positive or negative), in accordance with the Participant’s Investment Election, calculated no less frequently than the last day of each calendar quarter.

(e)            No assets shall be segregated or earmarked in respect of any Participant’s Account and no Participant shall have any right to assign, transfer, or pledge his interest, or any portion thereof, in his Account. The Plan and the crediting of Accounts hereunder shall not constitute a trust and shall merely be for the purpose of recording an unsecured contractual obligation. All amounts payable pursuant to the terms of this Plan shall be paid from the general assets of the Company.

(f)            Until the entire balance in all of the Accounts of a Participant has been paid in full, the Company will furnish or cause to be furnished to each Participant a report, at least annually, setting forth the credits and debits to his Account and the balance of such Account.

 

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Section 5.  Payment of Deferred Accounts.

(a)            The amount to be paid to a Participant on the Payment Commencement Date shall be computed on the basis of the balance of the Participant’s Account on such date.

(b)            All payments of amounts under this Plan shall be made in cash.

(c)            Notwithstanding the Payment Commencement Date and Payment Form elected by the Participant, if a Participant dies or becomes permanently disabled before his entire Account has been paid to him, the entire Account shall be payable in a lump sum to such Participant (or, in the case of death, to his Beneficiary) as soon as practical but not more than 90 days following the event giving rise to such payment. A Participant is permanently disabled if the Participant is receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Company by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

(d)            All or a portion of a Participant’s Account may be paid to the Participant upon the Participant’s incurring an unforeseeable emergency within the meaning of Section 409A. In such event, the amount payable with respect to the unforeseeable emergency shall not exceed the amount necessary to satisfy the emergency plus the amount necessary to satisfy taxes reasonably anticipated as a result of the emergency payment. The amount necessary to satisfy the emergency shall be determined taking into account the extent to which the financial hardship caused by the emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

(e)            To the extent consistent with Section 409A, the Committee shall cause the Account, or an appropriate portion thereof, to be paid in accordance with a qualified domestic relations order as defined in Section 414(p) of the Code.

(f)            The Committee shall have the authority to require deferral of a Participant’s Account beyond the elected Payment Commencement Date to the extent necessary to avoid a limitation on the deductibility by the Company of the deferred amount under Section 162(m) of the Code, as permitted under Section 409A.

 

Section 6.  Administration and Amendment

(a)            This Plan shall be administered by the Committee. All decisions and interpretations of the Committee shall be conclusive and binding on the Company, its Affiliates and the Participants. The Committee may at any time terminate an Employee’s designation as a Participant, in which event the employee shall not be permitted to defer additional Incentive Compensation under the Plan. No such change in designation shall otherwise affect such a Participant’s rights under the Plan.

(b)            The Company may at any time amend the Plan, including an amendment to suspend or terminate the right of Participants to defer Incentive Compensation under the Plan. No such amendment shall adversely affect a Participant’s rights with respect to Deferred Compensation credited to the Participant’s Account before such amendment, including the right to be credited with Investment Credits for the period of time after such amendment as long as there continues to be a positive balance in the Participant’s Account. To the extent permitted under Section 409A, the Company may in its discretion terminate the Plan and distribute all Accounts within twelve months of a change in control of the Company, as defined for purposes of Section 409A.

 

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(c)            Notwithstanding any other section of this Plan, if a Participant is discharged by the Company or an Affiliate for “cause,” such Participant’s Investment Credits shall be reduced to the lesser of (1) the Participant’s actual Investment Credits up to the date of discharge or (2) the Investment Credits that would have been credited under the money market fund in the Company’s 401(k) plan (or the most similar fund if there is no money market fund in the Company’s 401(k) plan), and from the date of discharge to the date of payment hereunder, Investment Credits shall be at such money market rate. A Participant’s discharge shall be considered for “cause” if it is because of: (i) conduct that the Participant knew or should have known was detrimental to legitimate interests of the Company or its Affiliates; (ii) dishonesty; (iii) fraud; (iv) misappropriation of funds or confidential, secret or proprietary information belonging to the Company or an Affiliate; (v) or commission of a crime.

(d)            The Company’s sole obligation under this Plan is to pay the benefits provided for herein and neither the Participant nor any other person shall have any legal or equitable right against the Company, any Affiliate, the Committee or any officer or employee of the Company or any Affiliate other than the right against the Company to receive such payments from the Company provided herein.

(e)            The Company shall bear all expenses incurred by it in administering this Plan.

 

Section 7.  Disputed Claims Procedure

If a Participant or Beneficiary (collectively, “Claimant”) has a complaint about the Plan’s operation or about Plan benefits, the Claimant has the right to have the complaint reviewed by the Committee. All complaints and claims for benefits must be submitted in writing. All such complaints must be submitted within the “applicable limitations period.” The “applicable limitations period” is two years, beginning on the earlier of (i) the date on which the payment was made, or (ii) for all other claims, the date on which the action complained or grieved of occurred.

Within 60 days after a claim is received, the Claimant will be notified in writing by the Committee of its decision. If special circumstances require an extension of up to 60 additional days of time for processing, the Committee will provide written notice of the extension prior to the expiration of the initial 60-day period. If the claim is denied or partially denied, the written notice will outline:

		§	The specific reasons for the denial,

		§	The provisions of the Plan on which the denial is based,

		§	The procedures for having the request reviewed, and

 

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		§	Additional information needed to process the request and an explanation of why this information is necessary.

The Claimant may ask for a review of the denied request within 60 days after receipt of the notice of denial. If an appeal is not filed within this 60-day period, an appeal cannot be filed at a later date.

To appeal a denial a Claimant must request a review by the Committee, or an appeals committee appointed by the Committee. Any such request must be in writing and include:

		§	The reasons that support the claim,

		§	The reasons the claim should not have been denied,

		§	All written evidence that supports the claim, and

		§	Any other appropriate issues or comments.

The appeal must include all documentary evidence necessary to support the claim and must state the reasons that the Claimant is eligible for the benefit claimed. The appeals committee will make its decision based on the record and the arguments that presented, including any evidence presented in the initial claim.

A Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to a claim. If this information is requested in order to perfect an appeal, or to file a claim, and there is a delay in providing it, the applicable time limits will be extended by the period of the delay. A Claimant may also request in writing that copies of the Plan document be made available for examination.

The Committee normally will reach a decision no later than 60 days after it receives a request for review. If needed, the Committee will send a written notice of an extension of this period of up to 60 additional days. The Committee’s decision will be in writing and will include specific reasons for the decision and references to the Plan provisions that apply.

Legal action may not be brought against the Committee or the Company without first pursuing the claims procedures. Any legal action to recover a benefit under this Plan must be filed within one year of the Committee’s decision on appeal. Failure to file suit within this time period will extinguish any right to benefits under the Plan.

IN WITNESS WHEREOF, the Company has caused this Plan to be adopted on this   28th   day of   May   , 2015.

 

 

	
 

	
Cable One, Inc.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 /s/ Eric Lardy

	
 

	
 

	
 

	
 

	
 

	
 

	
Title:

	
VP of Strategy & Finance

	
 

	
 

	
 

	
 

	
 

  

 

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