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TABLE OF CONTENTS
COMPENSATION DISCUSSION AND ANALYSIS

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.          )

Filed by the Registrant o

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

 

DigitalGlobe, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   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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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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Table of Contents

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Dear Shareowner:   April 14, 2015

You are cordially invited to attend the 2015 Annual Meeting of Shareowners of DigitalGlobe, Inc., to be held at The Marriott Meeting Place located at 1450 Dry Creek Drive, Longmont, CO 80503, on Tuesday, May 26, 2015, at 9:00 a.m. Mountain Time. The formal Notice of Annual Meeting appears on the following page. The attached Notice of Annual Meeting and Proxy Statement describe the matters that we expect to be acted upon at the Annual Meeting.

Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented. Regardless of the number of shares you own, please ensure that your shares are represented by voting in advance of the meeting as instructed on the Notice of Internet Availability of Proxy Materials, on the Internet, via a toll-free number or, if you request a paper or email copy of the proxy materials, by completing, signing and returning the proxy card or voting instruction form that is provided. If you submit your proxy without specifying your choices, your shares will be voted in accordance with the recommendations of the Board of Directors contained in the Proxy Statement.

On behalf of the Board of Directors, thank you for your continued support of DigitalGlobe. We look forward to seeing you on Tuesday, May 26, 2015.

Sincerely,

Sig

Jeffrey R. Tarr
President and Chief Executive Officer

DigitalGlobe, Inc.
1601 Dry Creek Drive, Suite 260
Longmont, Colorado 80503

(303) 684-4000

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NOTICE OF ANNUAL MEETING OF SHAREOWNERS
TO BE HELD ON MAY 26, 2015

To the Shareowners of DigitalGlobe, Inc.:

The 2015 Annual Meeting of Shareowners of DigitalGlobe, Inc. will be held at The Marriott Meeting Place located at 1450 Dry Creek Drive, Longmont, CO 80503, on Tuesday, May 26, 2015, at 9:00 a.m. Mountain Time for the following purposes:

      To vote for the election of the four Class III director nominees named in the accompanying Proxy Statement, each for a three-year term expiring at our 2018 Annual Meeting of Shareowners and until their respective successors are duly elected and qualified;

 

 


 

To approve, on an advisory basis, the compensation of our named executive officers;

 

 


 

To ratify the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the year ending December 31, 2015; and

 

 


 

To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

The Proxy Statement more fully describes these proposals.

The Board of Directors has fixed the close of business on April 1, 2015, as the record date for determining shareowners entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof.

The Company has elected to take advantage of the U.S. Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their shareowners on the Internet. The Company believes these rules allow it to provide you with the information you need while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting. Accordingly, on or about April 14, 2015, we mailed to most of our shareowners at the close of business on April 1, 2015, a Notice of Internet Availability of Proxy Materials containing instructions on how to access our Proxy Statement and 2014 Annual Report and how to vote their shares at the Annual Meeting. All other shareowners will receive a copy of these materials by mail (or by email for those shareowners who have requested electronic delivery). If you received a Notice of Internet Availability of Proxy Materials and desire a paper copy of the Proxy Statement and 2014 Annual Report, you may request one by following the instructions on the Notice of Internet Availability of Proxy Materials.

Your vote is very important. Whether or not you expect to attend the Annual Meeting, please submit your proxy or voting instructions, via the Internet or the telephone, as promptly as possible by following the instructions in the proxy materials you received in order to ensure your representation at the Annual Meeting. Alternatively, if you received a paper copy of the Proxy Statement and 2014 Annual Report, you may submit your proxy or voting instructions by marking, dating, signing and returning the proxy card or voting instruction form accompanying those materials in the pre-addressed return envelope provided. Even if you have voted by proxy, you may still vote in person if you attend the Annual Meeting. Please note, however, that if your shares are held by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from your broker, bank or nominee authorizing you to vote your shares at the Annual Meeting.

    By Authorization of the Board of Directors,

 

 


Sig

 

 

Daniel L. Jablonsky
Senior Vice President, General Counsel and Corporate Secretary
DigitalGlobe, Inc.
Longmont, Colorado

 

 

April 14, 2015

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on May 26, 2015: The 2015 Proxy Statement and 2014 Annual Report are available at http://www.proxyvote.com.

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Table of Contents

 
   

VOTING MATTERS AND BOARD RECOMMENDATIONS

  1

PROPOSAL 1 - ELECTION OF DIRECTORS

 
2

PROPOSAL 2 - ADVISORY VOTE ON EXECUTIVE COMPENSATION

  6

PROPOSAL 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  7

Rationale for Selection of Independent Registered Pubic Accounting Firm

  7

CORPORATE GOVERNANCE

 
8

Role of the Board of Directors

  8

Voting Standard for the Election of Directors

  8

Corporate Governance Guidelines

  9

Director Independence

  9

Board of Directors Leadership Structure

  9

Board of Directors Oversight of Risk

  9

Code of Ethics

  10

Succession Planning

  10

Director Evaluation Process

  10

Related Party Transactions Policies and Procedures

  10

Certain Relationships and Related Party Transactions

  10

Communications with the Board of Directors

  11

Board Committees

  11

Executive Leadership Team

  13

AUDIT RELATED MATTERS

 
14

Audit Committee Report

  14

Audit and Non-Audit Fees

  15

Pre-Approval of Independent Auditor Services

  15

2014 DIRECTOR COMPENSATION

 
16

Philosophy

  16

2014 Director Compensation Structure

  16

2014 Non-Employee Director Compensation

  17

Other Director Compensation Considerations

  18

COMPENSATION DISCUSSION AND ANALYSIS

 
19

Executive Compensation Program Overview

  20

Implementation of Compensation Best Practices

  21

2014 Executive Compensation Results

  25

Executive Policies, Provisions and Agreements

  29

Compensation Committee Report

 
32

Compensation Committee Interlocks and Insider Participation

  32

BENEFICIAL OWNERSHIP

 
33

Security Ownership of Certain Beneficial Owners and Management

  33

Section 16(a) Beneficial Ownership Reporting Compliance

  34

COMPENSATION TABLES

 
35

Summary Compensation Table - 2014, 2013 and 2012

  35

2014 All Other Compensation

  36

2014 Grants of Plan-Based Awards

  36

2014 Outstanding Equity Awards at Fiscal Year-End

  37

2014 Option Exercises and Stock Vested

  38

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

 
39

Payments and Potential Payments Upon Termination or Change in Control

  39

EMPLOYEE BENEFIT AND STOCK PLANS

 
41

1999 Equity Incentive Plan

  41

2007 Amended and Restated Employee Stock Option Plan

  41

GeoEye 2010 Omnibus Incentive Plan

  41

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

 
42

ADDITIONAL INFORMATION AND OTHER MATTERS

 
45
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DIGITALGLOBE, INC.
1601 Dry Creek Drive, Suite 260
Longmont, Colorado 80503

PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREOWNERS
May 26, 2015

We are providing this Proxy Statement to you in connection with the solicitation of proxies to be used at the 2015 Annual Meeting of Shareowners ("Annual Meeting") of DigitalGlobe, Inc. The Annual Meeting will be held at The Marriott Meeting Place located at 1450 Dry Creek Drive, Longmont, CO 80503, on Tuesday, May 26, 2015, at 9:00 a.m. Mountain Time. This Proxy Statement contains important information regarding our Annual Meeting, the proposals on which you are being asked to vote, information you may find useful in determining how to vote and information about voting procedures. As used in this Proxy Statement, "we," "us," "our," "DigitalGlobe" or the "Company" refer to DigitalGlobe, Inc., a Delaware corporation.

We are also furnishing a copy of our Annual Report on Form 10-K for the year ended December 31, 2014 ("2014 Annual Report"), which includes our 2014 audited financial statements.

Pursuant to the rules adopted by the U.S. Securities and Exchange Commission ("SEC"), we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials ("Notice of Internet Availability") to most of our shareowners of record. Brokers, banks and other nominees who hold shares on behalf of beneficial owners will be sending their own similar Notice of Internet Availability. Shareowners who did not receive a Notice of Internet Availability will receive a copy of the proxy materials by mail (or by email for those shareowners who have requested electronic delivery). We intend to mail the Notice of Internet Availability or otherwise furnish our proxy materials for the Annual Meeting, including this Proxy Statement and our 2014 Annual Report, on or about April 14, 2015 to all shareowners entitled to notice of and to vote at the Annual Meeting.

Shareowners who receive a Notice of Internet Availability will have the ability to access the proxy materials on the website referred to in the Notice of Internet Availability or may request to receive a paper copy of the proxy materials by mail or electronic copy by email on a one-time or ongoing basis. Instructions on how to request a printed copy by mail or electronically may be found on the Notice of Internet Availability and on the website referred to in the Notice of Internet Availability.

The Notice of Internet Availability will also identify: the date, the time and the location of the Annual Meeting; the matters to be acted upon at the meeting and the Board of Directors' recommendation with regard to each matter; a toll-free telephone number, an email address, and a website where shareowners can request to receive, free of charge, a paper or email copy of the Proxy Statement, our 2014 Annual Report and a form of proxy relating to the Annual Meeting; information on how to access and vote the form of proxy; and information on how to vote in person at the Annual Meeting should shareowners choose to do so.

VOTING MATTERS AND BOARD RECOMMENDATIONS

    #

Management Proposal

Board's Voting
Recommendation


Page


 

 

1

 

Election of four Class III director nominees (Roxanne J. Decyk, Martin C. Faga, Lawrence A. Hough and Warren C. Jenson) to serve for a three-year term expiring at our 2018 Annual Meeting of Shareowners and until their respective successors are duly elected and qualified.

 

Yes

 

2

 


 

 

2

 

Approval, on an advisory basis, of the compensation of our named executive officers.

 

Yes

 

6

 

 

 

 

3

 

Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2015.

 

Yes

 

7

 


 

 

 

 

 

 

 

 

 

 

 

You Can Vote in the Following Ways:


Logo
 
Logo
 
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By Internet

 

By Telephone

 

By Mail

 

In Person
Visit
www.proxyvote.com
  Call
1-800-690-6903
  Mark, date & sign your
proxy card or voting instruction form and return it
in the postage-paid
envelope provided.
  Attend the meeting to vote
in person.
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PROPOSAL 1 - ELECTION OF DIRECTORS

Our Amended and Restated Certificate of Incorporation provides for a classified Board of Directors consisting of three classes of directors, each serving staggered three-year terms. At this year's Annual Meeting, we will be presenting four directors for election, each to serve a term of three years expiring at our 2018 Annual Meeting of Shareowners and until their successors are duly elected and qualified. The nominees are Ms. Roxanne J. Decyk, Mr. Martin C. Faga, Mr. Lawrence A. Hough and Mr. Warren C. Jenson.

Each of the nominees standing for election is presently a Class III member of the Board of Directors. The Board of Directors, acting upon the recommendation of the Governance and Nominating Committee, recommends that the shareowners vote in favor of the election of the nominees named in this Proxy Statement to serve as members of the Board of Directors. Each of the nominees has consented to be named in this Proxy Statement and to serve if elected.

As of April 1, 2015, the Board of Directors consists of ten directors. The six directors whose terms do not expire at the Annual Meeting are expected to continue to serve after the Annual Meeting until such time as their respective terms of office expire and their successors are duly elected and qualified.

If, at the time of the Annual Meeting, any of the nominees should be unable or unwilling for good cause to serve, the person named as proxy on the proxy card will vote for such substitute nominee or nominees as the Board of Directors recommends, or vote to allow the resulting vacancy to remain open until filled by the Board of Directors, as the Board of Directors recommends.

The following biographical information about each nominee and each director as of April 1, 2015 summarizes the specific experiences, qualifications and skills that led to the conclusion that each of our directors should serve on the Board of Directors.

    Roxanne J. Decyk   Committees:   Skills and Qualifications:  

 

 

Age 62
Director Since 2014


 

Compensation

 

In considering Ms. Decyk for continued service on the Board of Directors, the Board of Directors noted Ms. Decyk's background as a senior executive and board member of several major multinational corporations. Her experience in corporate affairs, human resources and public company governance are valuable resources to the Board of Directors.

 

 

 

Ms. Decyk retired as Executive Vice President of Global Government Relations for Royal Dutch Shell, plc, an oil, gas, chemical and refined petroleum products company, in December 2010, after serving in that position since June 2009. From 2008 until June 2009, Ms. Decyk served as Corporate Affairs and Sustainable Development Director of Royal Dutch Shell plc and from July 2005 to 2008, she served as Corporate Affairs Director. Prior to this, Ms. Decyk was Director International of Shell International B.V., Senior Vice President Corporate Affairs and Human Resources of Shell Oil Company, and Vice President of Corporate Strategy of Shell International Limited. Ms. Decyk also serves as a director of Orbital ATK and serves as chairperson of their Personnel and Compensation Committee. Ms. Decyk also serves as a director of Ensco PLC and Petrofac Ltd. and was most recently a director at Snap-on, Inc., from August 1993 to June 30, 2014. Ms. Decyk earned a Bachelor of Arts degree from the University of Illinois at Urbana-Champaign in English literature and a Juris Doctorate from Marquette University School of Law.


 

                 
    Martin C. Faga   Committees:   Skills and Qualifications:  

 

 

Age 73
Director Since 2013


 

Risk Management (Chair)

Governance and Nominating

 

In considering Mr. Faga for continued service on the Board of Directors, the Board of Directors noted Mr. Faga's significant knowledge of the intelligence community and satellite imagery industry, gained as the former director of the National Reconnaissance Office (1989-1993), a federal agency engaged in satellite reconnaissance. His technical background, professional experience and service with MITRE Corporation, operating research centers and developing strategic initiatives, are valuable resources to the Board of Directors.


 


 

 

Mr. Faga served on the Board of Directors of GeoEye from June 2008 to January 2013 and was appointed to our Board of Directors in accordance with the terms of the Company's Agreement and Plan of Merger, dated as of July 22, 2012, between the Company and GeoEye. Since April 2010, Mr. Faga has been a director of Inmarsat Government U.S., a wholly owned subsidiary of Inmarsat plc, a British mobile satellite company. Since 2009, Mr. Faga has served as a director of Thomson Reuters Special Services, a wholly owned subsidiary of Thomson Reuters Corp. Mr. Faga also serves as a director of Orbital ATK. Since 2004, Mr. Faga has served as a director for the Association for Intelligence Officers, a non-profit organization. From May 2000 to November 2012, Mr. Faga served on the Board of Trustees for the MITRE Corporation, a non-profit organization for which he served as President and Chief Executive Officer from May 2000 through June 2006. From 2006 until January 2014, he served as a director and from January 2012 to January 2014 as Chairman of the Space Foundation, a non-profit organization; and from 2007 until March 2014, he served as a director for Olive Group North America, a subsidiary of Olive Group, a privately-held British firm. From 2006 to 2008, Mr. Faga served as a director and member of the compensation committee at Electronic Data Systems. Mr. Faga holds a Bachelor of Science in Electrical Engineering and a Master of Science in Electrical Engineering from Lehigh University. As discussed in more detail below, the Board of Directors approved a waiver for Mr. Faga of the retirement age for board members contained in the Company's Governance Guidelines. Mr. Faga is being extended because of his unique experience and qualifications in the U.S. Intelligence Community, including his leadership experience as director of the National Reconnaissance Office and his expertise in geospatial intelligence and the satellite imagery industry. Mr. Faga brings a critical perspective to the Board of Directors on the development of strategic objectives and risk oversight.


 

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    Lawrence A. Hough   Committees:   Skills and Qualifications:  

 

 

Age 70
Director Since 2013


 

Compensation

 

In considering Mr. Hough for continued service on the Board of Directors, the Board of Directors noted Mr. Hough's significant experience in leadership, operations and financial oversight gained from serving as president or managing director for various companies and institutions over many years, including as CEO of a Fortune 100 corporation. His management experience, in addition to his service on various boards of directors and chairman of public company audit, governance and compensation committees, provides him with executive, operational and financial expertise that are valuable resources to the Board of Directors.

 

 

 

Mr. Hough served on the Board of Directors of GeoEye from June 2008 to January 2013 and was appointed to our Board of Directors in accordance with the terms of the Company's Agreement and Plan of Merger, dated as of July 22, 2012, between the Company and GeoEye. Since January 2007, Mr. Hough has been the managing director of Stuart Mill Venture Partners, L.P., a venture capital investment firm. From January 1997 to the present, he has served as President and Chief Executive Officer of Stuart Mill Capital, Inc. Prior to that, Mr. Hough worked with Sallie Mae for 23 years, where he held various executive positions, including service as president and CEO from 1990 to 1997. Mr. Hough has also held chief executive officer positions with SatoTravel and SynXis Corporation. From 2008 to the present, he has served on the Board of Directors of Appistry, Inc., and from 2011 to present, he has served on the Board of Directors of Conferma Ltd., both privately held corporations. From 2008 to 2014, Mr. Hough served on the Board of Directors of Marrone Bio Innovations, Inc., a public company, as a member of the Audit and Compensation Committees. From 1985 to the present, he has served as a trustee of the Shakespeare Theatre Company, a non-profit organization; and since 2006, he has served as a trustee for the Levine School of Music, a non-profit organization. Mr. Hough served as a director of Goldleaf Financial Solutions, Inc., a provider of integrated technology and payment solutions for financial institutions, from 2005 to 2009 and was chairman of its Nominating and Governance committee. Mr. Hough served on the Board of Collegiate Funding Services, Inc., which went public in June 2002, and served as chair of the Audit Committee until the company was acquired by JPMorgan Chase. Mr. Hough previously served as a member of the board of directors and as treasurer of the U.S. Olympic Committee, as trustee for George Washington University, and as a member of the corporation of the Massachusetts Institute of Technology. Mr. Hough holds a Bachelor of Science in Engineering from Stanford University and a Master of Science in Management from the MIT Sloan School of Management. As discussed in more detail below, the Board of Directors approved a waiver for Mr. Hough of the retirement age for board members contained in the Company's Governance Guidelines because of his unique business experience, including as a former public company Chief Executive Officer, and the valuable counsel and advice he provides to the Company's CEO.


 

                 
    Warren C. Jenson   Committees:   Skills and Qualifications:  

 

 

Age 58
Director Since 2008


 

Compensation (Chair)

Governance and Nominating


 

In considering Mr. Jenson for continued service on the Board of Directors, the Board of Directors noted that Mr. Jenson brings significant strategic, operational and financial reporting and internal controls experience, having served as the Chief Financial Officer and in executive operations roles for several large publicly traded companies. In addition, the Board of Directors considered Mr. Jenson's experience in the media content business, having worked at the National Broadcasting Company, Amazon.com and Electronic Arts, noting that such experience has particular value to the Company as it continues to develop its commercial business unit. The insight he brings from his significant experience in financial and operational roles are valuable resources to the Board of Directors.

 

 

 

Since 2012, Mr. Jenson has been the Chief Financial Officer and head of technical operations of Acxiom Corporation, an enterprise data, analytics and software-as-a-service company. From 2008 through 2011 he served as Chief Operating Officer and Chief Financial Officer for Silver Spring Networks, a networking platform and solutions provider for smart grid energy networks. From 2002 to 2008, Mr. Jenson served as Executive Vice President, Chief Financial Officer and Administrative Officer of Electronic Arts, Inc. Before joining Electronic Arts, Mr. Jenson served as the Senior Vice President and Chief Financial Officer for Amazon.com, Inc. from 1999 to 2002. From 1998 to 1999, he served as the Chief Financial Officer and Executive Vice President for Delta Air Lines. Prior to that, he worked in several positions as part of the General Electric Company, including as Chief Financial Officer and Senior Vice President for the National Broadcasting Company, a subsidiary of General Electric. Mr. Jenson currently serves as a director of TapJoy, Inc., a monetization and distribution services provider for mobile applications, and Intematix Corporation, an LED material development company, each of which is a privately held corporation. He has a Bachelor of Science in Accounting and a Master of Accountancy - Business Taxation from Brigham Young University.

 


                    

The Board of Directors unanimously recommends a vote "FOR" each of the nominees set forth above.

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Information Regarding Other Directors (as of April 1, 2015)

Below is a list of the members of the Board of Directors whose terms of office do not expire until after the Annual Meeting and who are therefore not standing for re-election at the Annual Meeting. For each director below, we have outlined certain of their important skills and qualifications that the Board of Directors considered in determining that the Director's continued service on the Company's Board of Directors was in the best interest of shareowners.

Class I Directors with term expiring in 2016:

    Nick S. Cyprus   Committees:   Skills and Qualifications:  

 

 

Age 61
Director Since 2009


 

Audit (Chair)

Governance and Nominating


 

Mr. Cyprus brings extensive financial reporting and internal controls experience, having served as the Chief Accounting Officer for several large publicly traded companies, including his most recent position with General Motors Company. In addition, Mr. Cyprus is a certified public accountant. The Board of Directors believes that the financial and accounting skills and experience Mr. Cyprus brings, particularly with regard to execution of certain financial risk management and financial oversight responsibilities, are valuable resources to the Board of Directors.


 


 

 

Mr. Cyprus was Vice President, Controller and Chief Accounting Officer of General Motors Company, an automotive manufacturer, from December 2006 to July 2013. Prior to joining General Motors Company, from May 2004 to March 2006, Mr. Cyprus served as Senior Vice President, Controller, and Chief Accounting Officer of Interpublic Group of Companies. From 1999 to 2004, Mr. Cyprus was Vice President, Controller, and Chief Accounting Officer at AT&T Corporation. Mr. Cyprus currently sits on the Board of Directors of Reader's Digest Association, Inc. and is the Chairman of its Audit Committee. Mr. Cyprus holds a Master of Business Administration from New York University's Stern School of Business and a Bachelor of Science Degree in Accounting from Fairleigh Dickinson University in New Jersey. Mr. Cyprus is also a certified public accountant.


 

                 
    Jeffrey R. Tarr   Committees:   Skills and Qualifications:  

 

 

Age 52
Director Since 2011


 

None

 

The Board of Directors believes that Mr. Tarr's position as President and Chief Executive Officer of the Company, and as a member of the Board of Directors, facilitates more detailed discussion around the Company's strategic objectives, internal controls, risk assessment and management, and overall performance. The Board of Directors believes that the skills and experience that Mr. Tarr brings to the position of Chief Executive Officer, including leadership in building growth companies, apply equally to his ability to serve the shareowners of the Company as a member of the Board of Directors.

 

 

 

Mr. Tarr has been our President and Chief Executive Officer and Director since April 2011. Mr. Tarr previously served as the President and Chief Operating Officer of IHS Inc., a provider of information and insight in energy, economics, geopolitical risk, environmental sustainability and supply chain management from 2008 to December 2010. Before becoming President and Chief Operating Officer of IHS in 2008, Mr. Tarr was Co-President and Co-Chief Operating Officer from 2007 to 2008 and President and Chief Operating Officer of one of the company's two operating divisions from 2004 to 2007. Mr. Tarr led Hoover's Inc. from 2001 through 2004. He served as the Chief Executive Officer, President and a director from 2001 and additionally as Chairman from 2002 until The Dun & Bradstreet Corporation acquired Hoover's in 2003. Subsequent to the acquisition, Mr. Tarr served as President of Hoover's. Prior to that, Mr. Tarr served as President and Chief Executive Officer of All.com, Inc. Earlier in his career, Mr. Tarr held senior level positions at US WEST, Inc., TecMagik and International Development Group. Mr. Tarr began his career with Bain & Company. Mr. Tarr is a director of The Corporate Executive Board Company, a provider of research and analysis focused on strategy, operations and general management issues. He also serves as a director of The U.S. Geospatial Intelligence Foundation. Mr. Tarr holds a Master of Business Administration from Stanford University and a Bachelor of Arts from Princeton University's Woodrow Wilson School of Public and International Affairs.


 

                 
    James M. Whitehurst   Committees:   Skills and Qualifications:  

 

 

Age 47
Director Since 2009


 

Compensation

 

The Board of Directors believes Mr. Whitehurst's experience within diverse business environments, including as Chief Operating Officer for Delta Air Lines and as Chief Executive Officer of Red Hat, allows him to bring valuable insight and expertise to the Company, particularly with regard to development and execution of the Company's strategy. His executive management experience and operational expertise are valuable resources to the Board of Directors.

 

 

 

Mr. Whitehurst is President and Chief Executive Officer of Red Hat, the maker of Linux and other enterprise software, a position he has held since January 2008. Mr. Whitehurst previously served as Chief Operating Officer for Delta Air Lines from July 2005 to August 2007, and as Chief Network and Planning Officer from May 2004 to July 2005. From 2002 to 2004, Mr. Whitehurst served as Senior Vice President - Finance, Treasury & Business Development for Delta Air Lines. Prior to joining Delta Air Lines, Mr. Whitehurst held multiple positions of increasing authority at the Boston Consulting Group. Mr. Whitehurst holds a Bachelor of Arts in economics and computer science from Rice University, a General Course Degree from the London School of Economics, and a Master of Business Administration from Harvard Business School.


 

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Class II Directors with term expiring in 2017:

    Gen. Howell M. Estes, III
(USAF Ret.)

 
Committees:   Skills and Qualifications:  

 

 

Age 73
Director Since 2007
Chairman Since 2011



 

Governance and Nominating (Chair)

 

General Estes brings to the Board of Directors a combination of military and defense experience, and general business experience, that make him uniquely qualified to contribute to matters involving the Company's defense and intelligence programs, including the EnhancedView program. In addition, General Estes has significant board experience, as well as key leadership and management experience gained from his military career. General Estes possesses the security clearances necessary to allow him to be briefed on the Company's classified business, and his leadership skills and defense experience are valuable resources to the Board of Directors.

 

 

 

General Estes has been the President of Howell Estes & Associates, Inc., a consulting firm engaged primarily by aerospace companies, since 1998. At the present time, he only consults for Northrop Grumman Corporation's Aerospace Sector. General Estes previously served on the Board of Trustees for The Aerospace Corporation, a provider of technical and scientific research, development, and advisory services to national-security space programs, and now serves on the Boards of Directors of Analytical Graphics, Inc., a software development company focused on spaceflight and national security, and the Air Force Academy Foundation. From 1965 to 1998, he served in the U.S. Air Force. At the time of his retirement from the Air Force, he was Commander-in-Chief of the North American Aerospace Defense Command and the United States Space Command and also Commander of the Air Force Space Command. In addition to a Bachelor of Science Degree from the Air Force Academy, he holds a Master of Arts Degree in Public Administration from Auburn University and is a graduate of the Program for Senior Managers in Government at Harvard's JFK School of Government. The Board of Directors approved a waiver for General Estes of the retirement age for board members contained in the Company's Governance Guidelines.


 

                 
    Kimberly Till   Committees:   Skills and Qualifications:  

 

 

Age 59
Director Since 2010


 

Audit

Risk Management


 

Ms. Till brings to the Board of Directors significant experience in commercializing and delivering content at companies including Morf Media, Harris Interactive, Sony and Microsoft, as well as extensive experience in doing business in Europe, Asia and Latin America. Her background in executive management and expertise in information and content markets are valuable resources to the Board of Directors.

 

 

 

Ms. Till is an independent consultant and advisor to early stage companies, including serving as Interim CEO then Chairman of the Board of Morf Media, a gamification and enterprise training company from Sept. 2012 to March 2014. Prior to Morf Media, Ms. Till was a director and President and Chief Executive Officer of Harris Interactive, a publicly traded, global leader in custom market research and publishers of The Harris Poll, from October 2008 through June 2011. Ms. Till was responsible for the global management of the company, which included operations in the U.S., Canada, Europe, and Asia. From 2006 to 2008, Ms. Till was President then Chief Executive Officer of the North America Custom business of Taylor Nelson Sofres, a global market research company. From 2003 to 2006, Ms. Till served as Vice President of the U.S. then the Worldwide Media and Entertainment Group, Communications Sector, at Microsoft. Earlier in her career, Ms. Till served as Senior Vice President of International Operations and General Manager of AOL International, and as Senior Vice President of Strategic Planning and Marketing for Sony Corporation of America. Ms. Till also serves as a director of Taunton,  Inc. and Independent Programming Network ("IPN"), both privately held corporations. Ms. Till holds a Bachelor of Arts in History from the University of Alabama, a Master of Business Administration from Harvard Business School, and a Juris Doctorate from Duke University Law School.


 

                 
    Eddy Zervigon   Committees:   Skills and Qualifications:  

 

 

Age 46
Director Since 2014
Previously Director from 2004 to 2013



 

Audit

Risk Management


 

Mr. Zervigon brings to the Board of Directors significant institutional knowledge regarding the Company, having served on the Board of Directors from 2004 to January 2013. The Board of Directors also noted Mr. Zervigon's financial qualifications which have significant merit in contributing to the Company's M&A capabilities and the overall level of financial reporting experience on the Board of Directors. His significant financial and transactional experience are valuable resources to the Board of Directors.

 

 

 

Mr. Zervigon is currently a Principal at the investment firm Alta Loma Energy, and from 1997 to February 2012, he worked for Morgan Stanley & Co. Incorporated, most recently as a Managing Director of its Principal Investments Group. Mr. Zervigon also serves as a director of Bloom Energy and has previously served as a board member of MMCinemas, Impsat Fiber Networks, Inc., TVN Entertainment Corporation and Stadium Capital. Mr. Zervigon has a Bachelor's degree in Accounting and a Master's degree in Tax from Florida International University and also has a Master in Business Administration from the Amos Tuck School of Business at Dartmouth College. Mr. Zervigon is also a certified public accountant.


 

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PROPOSAL 2 - ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended ("Exchange Act"), we are providing our shareowners with the opportunity to approve, on an advisory basis, the Company's executive compensation as disclosed in this Proxy Statement in accordance with rules promulgated by the SEC.

Compensation Philosophy.    Our executive compensation programs are designed to reward executives for producing sustainable growth in shareowner value consistent with the Company's strategic plan, to attract and retain world-class talent and to align compensation with the interests of shareowners. The Compensation Committee strongly believes that executive compensation pay opportunities, realizable pay and pay actually realized should be tied to Company performance in both the short and long term.

Key Features of our Executive Compensation Programs.    Some of the key features of our current executive compensation program include:

      We tie pay to performance: both our short term cash bonus awards and our long term equity incentive awards for our executive officers are tied to performance-based conditions, and the ultimate value of our incentive equity awards is tied to our stock price, further aligning the awards with shareowner interest.

 

 


 

We awarded cash bonuses for our executive officers in 2014 based on actual performance against pre-determined goals for two key financial metrics (Adjusted EBITDA Margin and Consolidated Revenues), and the Company's and executives' performance against quantitative strategic corporate objectives.

 

 


 

We awarded long term equity incentive awards for our executive officers in 2014 using a mix of performance share units tied to the Company's return on invested capital and its relative total stockholder return over a three-year performance period, and restricted share units that feature time-based vesting requirements in order to encourage retention.

Best Practices.    We believe that shareowner interests are served by other executive compensation-related practices that we follow. These practices include:

      We maintain a clawback policy

 

 


 

We maintain stock ownership guidelines for our directors and executives

 

 


 

Our Compensation Committee retains and receives input from an independent compensation consultant

 

 


 

Payment and vesting levels under our annual executive officer cash bonus plan and long term stock incentive awards, respectively, are capped

 

 


 

We do not provide any tax gross-up payments to our executive officers

 

 


 

Our policies prohibit our directors and executives from pledging of, hedging or trading in derivatives of our stock

We encourage shareowners to review the Compensation Discussion and Analysis beginning on page 19 of this Proxy Statement, which describes our executive compensation philosophy and the design of our executive compensation programs in greater detail. Our Board of Directors believes the Company's executive compensation programs are effective in creating value for our shareowners and moving the Company towards realization of its long term goals.

The Company requests shareowner approval of the compensation paid to our named executive officers as described in this Proxy Statement and we are asking shareowners to vote "FOR" the following resolution:

    RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed in this Proxy Statement pursuant to the Securities and Exchange Commission's executive compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, executive compensation tables and narrative discussion that accompanies the executive compensation tables), is hereby APPROVED.

The vote to approve the compensation of our named executive officers is advisory and, accordingly, the results are not binding on the Company, the Board of Directors or the Compensation Committee, and will not be construed as overruling a decision by, or creating or implying any additional fiduciary duty for the Company, the Board of Directors or the Compensation Committee. Our Compensation Committee, however, values the input of our shareowners and will consider the results of the vote when making future compensation decisions for our named executive officers. We have determined that our shareowners should cast an advisory vote on the compensation of our named executive officers on an annual basis. Unless this policy changes, the next advisory vote on the compensation of our named executive officers will be at the 2016 annual meeting of shareowners.

The Board of Directors unanimously recommends a vote "FOR" the advisory approval of the Company's executive compensation of its named executive officers.

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PROPOSAL 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has appointed the accounting firm of PricewaterhouseCoopers LLP as the independent registered public accounting firm to conduct the 2015 annual audit of our financial statements. This matter is nevertheless being submitted to the shareowners to afford them the opportunity to express their views. If this proposal is not approved at the Annual Meeting by the affirmative vote of shareowners holding a majority of the shares present in person or by proxy at the meeting and entitled to vote on this proposal, the Audit Committee intends to reconsider its appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. PricewaterhouseCoopers LLP conducted the 2014 annual audit of our financial statements.

We expect that a representative of PricewaterhouseCoopers LLP will be present at the Annual Meeting to answer any questions concerning the independent registered public accounting firm's areas of responsibility, and will have an opportunity to make a statement if he or she desires to do so.

Rationale for Selection of Independent Registered Public Accounting Firm

In determining whether to reappoint PricewaterhouseCoopers LLP as the Company's independent auditor, the Audit Committee took into consideration a number of factors, including:

      PricewaterhouseCoopers LLP's historical and recent performance on the Company's audit and its financial reviews;

 

 


 

the quality and candor of PricewaterhouseCoopers LLP's communications with the Audit Committee and management;

 

 


 

the appropriateness of PricewaterhouseCoopers LLP's fees;

 

 


 

PricewaterhouseCoopers LLP's history as our independent auditor, its familiarity with our industry and the complexities of global operations, and its expertise in accounting policies and practices, and internal control over financial reporting; and

 

 


 

PricewaterhouseCoopers LLP's continued independence.

Based on this evaluation, the Audit Committee believes that the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for fiscal year 2015 is in the best interest of the Company and its shareowners, and should be ratified.

The Board of Directors unanimously recommends a vote "FOR" the ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the year ended December 31, 2015.

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CORPORATE GOVERNANCE

DigitalGlobe is committed to maintaining a program of corporate governance that promotes responsible corporate activity, the long-term interests of shareowners, and accountability of our Board and management. Our Company has a culture dedicated to ethical behavior which is reflected in our Purpose, Vision, and Values. Our corporate Purpose is Seeing a Better World - by giving our customers the power to see the Earth clearly and in new ways, we enable them to make our world a better place. We are relentlessly committed to helping our customers save lives, resources, and time and to achieving our Vision to "By 2020, be the indispensable source of information about our changing planet." Our Values (integrity, respect, mission and team before self, curiosity and innovation and results matter) guide our actions. Our Purpose, Vision, and Values unite us, creating a working environment that enables us to perform the best work of our careers. Our people are paramount to our continued success, and we continue to attract and develop talent to embrace our Purpose, Vision and Values, achieve our strategy and grow our business.

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Role of the Board of Directors

The Board of Directors plays an active role in overseeing management and representing the interests of shareowners. Directors regularly interact with management and are available to provide advice and counsel. The Board of Directors and the committees regularly schedule and hold executive sessions without any members of management present. General Estes, our independent Chairman of the Board of Directors, presides at all executive sessions of the non-management directors.

Directors are expected to attend Board of Directors meetings and the meetings of the committees on which they serve. In 2014, the Board of Directors met a total of six times. All directors attended at least 75 percent of the total meetings of the Board of Directors and the committees on which he or she served during his or her tenure during 2014. It is the policy of the Board of Directors that directors are invited to attend the Company's annual meeting of shareowners, although such attendance is not mandatory. General Estes and Mr. Tarr attended the 2014 annual meeting of shareowners.

Voting Standard for the Election of Directors

Section 3.1 of our Amended and Restated Bylaws ("Bylaws") provide that in uncontested elections, directors are elected by a majority of the votes cast. In contested elections, the plurality voting standard applies so that the vacancies on the Board of Directors are filled by the nominees who receive the most votes, regardless of whether they receive a majority of votes cast. An election will be a "contested election" if the Corporate Secretary of the Company has received one or more notices that a shareowner or shareowners intend to nominate a person or persons for election to the Board of Directors, which notice(s) purports to be in compliance with our Bylaws and all such nominations have not been withdrawn by the proposing shareowner(s) on or prior to the 10th day preceding the date we first mail our notice of meeting for such meeting to its shareowners. For purposes of Section 3.1, a "majority of the votes cast" means that the number of shares

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cast "FOR" a nominee's election exceeds the number of votes cast "AGAINST" that nominee's election (with "abstentions" and "broker non-votes" not counted as a vote cast either "FOR" or "AGAINST" that director's election).

An incumbent director who stands for election to the Board of Directors but who fails to receive a majority of the votes cast in an election that is not a contested election shall tender his or her irrevocable resignation to the Chairman of the Board of Directors or the Corporate Secretary of the Company promptly following certification of the election results. The Governance and Nominating Committee, or such other committee designated by the Board of Directors pursuant to the Bylaws, shall consider the facts and circumstances relating to the election and the resignation of such incumbent director and make a recommendation to the Board of Directors as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board of Directors shall act on the resignation, taking into account the Governance and Nominating Committee's recommendation, and we will publicly disclose the Board of Directors' decision regarding the resignation and, if such resignation is rejected, the rationale behind the decision within 90 days following certification of the election results. The Governance and Nominating Committee in making its recommendation and the Board of Directors in making its decision each may consider any factors and other information that they consider appropriate and relevant.

Any director who tenders his or her resignation pursuant to this provision shall not participate in the recommendation of the Governance and Nominating Committee or in the decision of the Board of Directors regarding whether to accept the resignation offer. If a majority of the Governance and Nominating Committee fails to receive the required vote in favor of his or her election in the same election, then the other directors shall appoint a committee amongst themselves to consider the resignation offers and recommend to the Board of Directors whether to accept them.

Corporate Governance Guidelines

Our Board of Directors has adopted Corporate Governance Guidelines that provide for responsible oversight and governance of the Company and management. Our Corporate Governance Guidelines cover a wide range of subjects, including: the role of the Board of Directors; Board of Directors composition, director responsibilities, director nomination procedures and qualifications; director independence standards; director orientation and continuing education; procedures for annual performance evaluations of the Board of Directors and the committees; formal evaluation of the chief executive officer, and succession planning and management development. The Governance and Nominating Committee regularly assesses our governance practices in light of market benchmarks and best practices.

A copy of our Corporate Governance Guidelines can be found on the Company Information page of our website under Governance Documents at http://investor.digitalglobe.com.

Director Independence

As required by our Corporate Governance Guidelines and Governance and Nominating Committee charter, the Board of Directors has determined that each of General Howell M. Estes, III, Nick S. Cyprus, Roxanne J. Decyk, Martin C. Faga, Lawrence A. Hough, Warren C. Jenson, Kimberly Till, James M. Whitehurst and Eddy Zervigon is an "independent director" as defined under the applicable rules and regulations of the SEC and the New York Stock Exchange ("NYSE"). In addition, the Board of Directors previously determined that General Michael P.C. Carns, who served on the Board of Directors during part of 2014, was independent under applicable rules and regulations of the SEC and the NYSE during the term of his service on the Board of Directors. In determining the independence of our directors, the Board of Directors considered all transactions in which we and any director had any interest. In making these determinations, the Board of Directors considered the relationships and transactions described under the caption "Certain Relationships and Related Party Transactions" beginning on page 10.

Board of Directors Leadership Structure

Our Corporate Governance Guidelines do not require the separation of the offices of the Chairman of the Board of Directors and the Chief Executive Officer. Instead, the Board of Directors has the latitude to choose its Chairman of the Board in any way that it deems best for the Company at any given point in time. After careful consideration, the Board of Directors determined that it is in the best interest of the Company and its shareowners to separate the positions of Chairman of the Board of Directors and Chief Executive Officer. General Estes, one of our independent directors, currently serves as our duly elected Chairman of the Board of Directors.

Board of Directors Oversight of Risk

In December 2010, the Company established a standing Risk Management Committee of the Board of Directors. The Risk Management Committee is charged with oversight of enterprise risks, including performance under our EnhancedView contract, information technology and security risks, regulatory compliance risks, and oversight of the Company's development and execution of its Risk Management Program. The Audit Committee has shared responsibility for risk with specific responsibility for overseeing financial risk, including risks associated with preparation of financial statements. The Audit Committee also serves as our Qualified Legal Compliance Committee. Members of management report to each committee on a quarterly basis concerning management of specific risks that may impact the Company. Both committees report to the full Board of Directors on all material risk considerations affecting the Company.

The day-to-day enterprise risk management responsibilities for the Company are overseen by an executive risk committee of the Company comprised of the Chief Financial Officer, the Chief Operations Officer, the General Counsel, the Director of Internal Audit, and other key executives and management of the Company, in accordance with the Company's Enterprise Risk Management Policy. The Chief Financial Officer, the Chief Operations Officer, and the Director of Internal Audit have primary responsibility for reporting to the Risk Management Committee and the Audit Committee on enterprise risk matters, though other members of management may participate, as warranted by the matters to be discussed.

Our Board of Directors believes that the processes it has established for overseeing risk would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of leadership structure as described under "Board of Directors Leadership Structure" above.

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Code of Ethics

We have adopted a Code of Ethics and Business Conduct that governs our Board of Directors, senior officers, including our Chief Executive Officer and Chief Financial Officer, and employees. Copies of our Code of Ethics and Business Conduct can be found on the Company Information page of our website under Governance Documents at http://investor.digitalglobe.com and may also be obtained upon request without charge by writing to the Corporate Secretary of the Company, DigitalGlobe, Inc., 1601 Dry Creek Drive, Suite 260, Longmont, Colorado 80503. We will post to our website any amendments to the Code of Ethics and Business Conduct, and any waivers that are required to be disclosed by the rules of either the SEC or the NYSE.

Succession Planning

The Board of Directors is accountable for the development, implementation and regular review of a succession plan for the Chief Executive Officer and other executive officers. Board members are expected to have a thorough understanding of the characteristics necessary for a Chief Executive Officer to execute on a long term strategy that optimizes operating performance, profitability and shareowner value creation. As part of its responsibilities under its charter, the Governance and Nominating Committee of the Board of Directors oversees the succession planning process for the Chief Executive Officer and other key employees. The ongoing succession process is designed to reduce vacancy, readiness and transition risks and develop strong leadership quality and executive bench strength. The succession plan for the Chief Executive Officer and other key employees is reviewed not less than annually with the Board of Directors in executive session.

Director Evaluation Process

The Board of Directors, through the Governance and Nominating Committee, establishes criteria and processes for the annual self-evaluation of the Board of Directors and each committee. The performance self-evaluations focus on the contribution to the Company by the Board of Directors and each committee, and specifically focuses on areas in which a better contribution could be made. From time to time, the Board of Directors engages outside consultants to assist with its self-evaluations. The Board of Directors believes that through this annual self-evaluation procedure, the Board of Directors will continue to evolve to meet the needs of the Company.

Related Party Transactions Policies and Procedures

Our Governance and Nominating Committee is responsible for reviewing all related person transactions that are required to be disclosed under the SEC rules and, when appropriate, initially authorize or ratify all such transactions in accordance with written policies and procedures established by the committee from time to time. The policies and procedures provide that, in determining whether or not to recommend the initial approval or ratification of a related person transaction, the Governance and Nominating Committee will consider all of the relevant facts and circumstances available, including (if applicable) but not limited to:

      Whether there is an appropriate business justification for the transaction;

 

 


 

The benefits that accrue to us as a result of the transaction;

 

 


 

The terms available to unrelated third parties entering into similar transactions;

 

 


 

The impact of the transaction on a director's independence (in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareowner or executive officer);

 

 


 

The availability of other sources for comparable products or services;

 

 


 

Whether it is a single transaction or a series of ongoing, related transactions;

 

 


 

Whether entering into the transaction would be consistent with our Code of Ethics and Business Conduct.

In addition, our Audit Committee reviews all related person transactions for which Audit Committee approval is required by applicable law or NYSE rules.

Certain Relationships and Related Party Transactions

We describe below transactions and series of similar transactions, since January 1, 2014, to which we were a party or will be a party other than compensation arrangements which are described under Compensation Discussion and Analysis, in which: (i) the amounts involved exceeded or will exceed $120,000, and (ii) a director, executive officer, holder of more than 5% of our voting securities or any member of their immediate family had or will have a direct or indirect material interest.

Cerberus

Based on information supplied in an amended Schedule 13D filed with the SEC on November 22, 2013, the Cerberus Parties (collectively, Cerberus Capital Management, L.P., Cerberus Partners II, L.P., Cerberus Series Four Holdings, LLC and Cerberus Satellite LLC) ceased being the beneficial owners of more than 5% of our common stock; however, the Cerberus Parties continued being the beneficial owners of more than 5% of our Series A Convertible Preferred Stock until 2014. In March 2014, the Cerberus Parties transferred the 80,000 shares of Series A Convertible Preferred Stock to Citigroup Global Markets, Inc., and ceased being the beneficial owners of more than 5% of our Series A Convertible Preferred Stock.

Pursuant to an agreement entered into on July 22, 2012 among the Company and the Cerberus Parties ("Cerberus Agreement"), the Cerberus Parties previously agreed that for a period of time neither they nor their respective affiliates (i) would hold beneficial ownership in excess of 19.9% of the outstanding DigitalGlobe common stock, including the DigitalGlobe preferred stock on an as-converted basis, and (ii) would vote their shares in accordance with the recommendations of the DigitalGlobe Board of Directors. Pursuant to the Cerberus

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Agreement, Cerberus Capital Management, L.P. also held the right to appoint one director to the DigitalGlobe Board of Directors, with a term that expired at the Company's 2014 annual meeting of shareowners. General Michael P.C. Carns, Cerberus Capital Management, L.P.'s designee, was appointed to the DigitalGlobe Board of Directors effective January 31, 2013 in connection with the closing of the acquisition of GeoEye, Inc. ("GeoEye"). The Cerberus Agreement expired on November 13, 2014, one year after the Cerberus Parties ceased to be beneficial owners of more than 5% of our common stock.

Communication with the Board of Directors

The Board of Directors encourages our shareowners and other interested parties who are interested in communicating with our Board of Directors, the Chairman of the Board of Directors or the independent directors as a group by mail as follows:

Board of Directors of DigitalGlobe, Inc.
c/o Corporate Secretary
DigitalGlobe, Inc.
1601 Dry Creek Drive, Suite 260
Longmont, Colorado 80503

Additionally, shareowners and other interested parties who are interested in communicating with the Chairman of the Board of Directors or the independent directors as a group may do so electronically by clicking on "Contact the Board" on our Company Information page of our website under Governance Documents at http://investor.digitalglobe.com, by email to independentdirector@digitalglobe.com, or by mail addressed to: Corporate Secretary, DigitalGlobe, Inc., 1601 Dry Creek Drive, Suite 260, Longmont, Colorado 80503.

Correspondence received will be reviewed by our General Counsel or designee, who will regularly forward to the appropriate directors all correspondence that, in the opinion of our General Counsel, deals with the functions of the Board of Directors or committees thereof or that the General Counsel otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by the Company that is addressed to any director and request copies of any such correspondence. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Audit Committee and handled in accordance with procedures established by the Audit Committee with respect to such matters.

Board Committees

The Board of Directors has four standing committees. The following table lists, as of the date of this Proxy Statement, the membership on each standing committees of the Board of Directors and the number of meetings each committee held in 2014:

 

 

Name


Audit
Compensation
Governance &
Nominating


Risk
Management


 

 

General Howell M. Estes, III

      Chair    

 

 

Nick S. Cyprus

  Chair       Member        

 

 

Roxanne J. Decyk

    Member      

 

 

Martin C. Faga

          Member   Chair    

 

 

Lawrence A. Hough

    Member      

 

 

Warren C. Jenson

      Chair   Member        

 

 

Kimberly Till

  Member       Member  

 

 

James M. Whitehurst

      Member            

 

 

Eddy Zervigon

  Member       Member  

 

 

Total Committee Meetings Held in 2014

  9   5   4   4    

The Board of Directors annually reviews and approves the charter of each of the committees. All committee charters are available on the Company Information page of our website under Governance Documents at http://investor.digitalglobe.com.

Audit Committee

Our Audit Committee assists the Board of Directors in its oversight of the integrity of our financial statements, our independent registered public accounting firm's qualifications and independence and the performance of our independent registered public accounting firm. Among its functions, the Audit Committee: (i) reviews the audit plans and findings of our independent registered public accounting firm and our internal audit activities, as well as the results of regulatory examinations, and tracks management's corrective action plans where necessary; (ii) reviews our financial statements, including any significant financial items and changes in accounting policies, with our senior management and independent registered public accounting firm; (iii) reviews our financial risk and internal control procedures, and significant tax and legal matters; and (iv) has the sole discretion to appoint annually our independent registered public accounting firm, evaluate its independence and performance and set clear hiring policies for employees or former employees of the independent registered public accounting firm. The Audit Committee reviews and evaluates, at least annually, the adequacy of its charter. The Board of Directors has determined that each of Mr. Cyprus, Ms. Till and Mr. Zervigon qualifies as an audit committee financial expert as defined by applicable SEC rules. Each member of the Audit Committee qualifies as an independent director, as defined under the NYSE rules and Rule 10A-3 of the Exchange Act applicable to the Audit Committee members.

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Compensation Committee

Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our officers and employees. The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives, and recommends for approval by the Board of Directors the compensation of these officers based on such evaluations. In making compensation decisions, the Compensation Committee may consider the recommendations of the Chief Executive Officer concerning the Company's compensation and employment benefit plans and practices, including its executive compensation plans, incentive compensation and equity-based plans with respect to executive officers (other than the Chief Executive Officer) and director compensation arrangements. The Compensation Committee also administers the issuance of awards under our equity award plans. The Compensation Committee used both Towers Watson and Radford, an Aon Hewitt company ("Radford"), as independent consultants in 2014 to assist in fulfilling the Compensation Committee's duties. Additional information regarding the Compensation Committee's engagement of its independent compensation consultant is contained in this Proxy Statement on page 23. The Compensation Committee reviews and evaluates, at least annually, the adequacy of its charter and the performance of the Compensation Committee and its members, including compliance of the Compensation Committee with its charter. Each member of the Compensation Committee qualifies as an independent director, as defined under the applicable rules and regulations of the NYSE. In making its independence determination for each member of the Compensation Committee, the Board of Directors considered whether the director has a relationship with the Company that is material to the director's ability to be independent from management in connection with the duties of a compensation committee member.

Governance and Nominating Committee

Our Governance and Nominating Committee is responsible for making recommendations to the Board of Directors regarding candidates for directorships and the size and composition of the Board of Directors. The Governance and Nominating Committee evaluates and reviews with the Board of Directors, from time to time, the appropriate qualifications, expertise and characteristics required of Board of Directors members. This assessment includes issues of diversity; experience, background and skills, including an understanding of media content markets, U.S. government contracting, international business, corporate finance, accounting and internal controls, technology, sales and marketing, and strategic business planning. In addition, the Governance and Nominating Committee is responsible for overseeing our corporate governance guidelines, reporting and making recommendations to the Board of Directors concerning governance matters, and succession planning for our Chief Executive Officer and key executives. The Governance and Nominating Committee reviews and evaluates, at least annually, the adequacy of its charter. Each member of the Governance and Nominating Committee qualifies as an independent director, as defined under the applicable rules and regulations of the NYSE.

The Governance and Nominating Committee reviews all candidates for nomination to the Board of Directors, including those recommended by shareowners. To have a candidate considered by the Governance and Nominating Committee for next year's annual meeting of shareowners, a shareowner must submit the recommendation in writing to our Corporate Secretary. Recommendation letters must include the following information: (i) the name of the shareowner submitting the recommendation and evidence of the shareowner's ownership of Company stock, including the number of shares owned and the length of time of ownership; (ii) the reasons for the recommendation; and (iii) the full name and address of each recommended director candidate as well as brief biographical information setting forth past and present directorships, employments, occupations and civic activities. Any such recommendation should also be accompanied by a written statement from the proposed nominee consenting to be named as a candidate and, if nominated and elected, consenting to serve as a director. The Governance and Nominating Committee may request additional information concerning the director candidate as it deems reasonably necessary to determine the eligibility and qualification of the director candidate to serve as a member of our Board of Directors. For a candidate to be considered by the Governance and Nominating Committee for nomination to the Board of Director at an upcoming annual meeting, a shareowner recommendation must be received by our Corporate Secretary not less than 120 days prior to the anniversary date of the Company's most recent annual meeting of shareowners. Our Bylaws include additional requirements regarding nominations of persons at a shareowners' meeting other than by the Board of Directors. The Board of Directors will evaluate director candidates recommended by shareowners in the same manner as director nominees recommended by any other source, including management or members of the Board of Directors.

The Governance and Nominating Committee and the Board of Directors considered waivers of the retirement age in the Company's Governance Guidelines for each of Messrs. Estes, Faga and Hough, and determined that it would be in the best interests of the Company and its shareowners to waive the retirement age for them. With regard to Gen. Estes, the Board of Directors determined that his extensive defense and military experience, leadership skills, and his long history with the Company were vital to the Board of Directors. With regard to Mr. Faga, the Board of Directors determined that his extensive experience in the satellite imagery industry and background with the U.S. federal government bring a critical perspective to the Board of Directors and to development of strategic objectives and risk oversight. With regard to Mr. Hough, the Board of Directors determined that Mr. Hough's broad experience as a CEO and director of public companies and his widespread investment experience provide a decisive perspective on operational, financial and strategic matters.

Risk Management Committee

Our Risk Management Committee is responsible for overseeing enterprise risk management for the Company. Its responsibilities include reviewing the Company's identification of risks and their mitigation in light of the Company's risk tolerance profile and business strategy, periodically reviewing the adequacy of the Company's resources to perform its risk management responsibilities and achieve its objectives, meeting with the Company's executive risk oversight committee, reviewing the Company's performance under material agreements such as the EnhancedView contract, reviewing the Company's information technology and industrial security programs and reviewing the Company's compliance with legal and regulatory requirements relating to business operations. The Risk Management Committee reviews and evaluates, at least annually, the adequacy of its charter. The Risk Management Committee charter requires that each member of the Risk Management Committee qualify as an independent director, that at least one member shall hold specified security clearances and one member also serve on the Company's Audit Committee. Each member of the Risk Management Committee qualifies as an independent director, as defined under the applicable rules of the NYSE.

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Executive Leadership Team

The following table lists the members of our executive leadership team of April 1, 2015:

 

 

Name



Age
Title

 

 

Jeffrey R. Tarr

  52   President and Chief Executive Officer  

 

 

Gary W. Ferrera

    52   Executive Vice President, Chief Financial Officer    

 

 

Timothy M. Hascall

  61   Executive Vice President, Chief Operations Officer  

 

 

Walter S. Scott

    57   Executive Vice President, Chief Technical Officer and GM-USG    

 

 

Daniel L. Jablonsky

  45   Senior Vice President, General Counsel, and Corporate Secretary  

 

 

David B. Turner, Jr.

    41   Senior Vice President, Diversified Commercial Sales and Marketing    

 

 

Grover N Wray

  54   Senior Vice President, Chief Human Resources Officer  

Please see Proposal 1 of this Proxy Statement, Information Regarding Other Directors, for Mr. Tarr's biography.

The role of our executive leadership team is to define our strategy and formalize clear objectives, including businesses and market segments. They also define our culture, which is reflected in our Company's stated purpose, vision and values. One of our key strategic focus areas is our Culture of Leadership. Our Company's success is dependent upon the right people, culture and organizational structure. The Board of Directors also recognizes the importance of effective executive leadership to our success. Each member of our executive leadership team serves at the pleasure of the Board of Directors:

Gary W. Ferrera joined DigitalGlobe in 2015 as our Executive Vice President and Chief Financial Officer. From January 2014 through January 2015, he was Executive Vice President, Chief Financial Officer and Treasurer of Intrawest Resorts. From March 2013 through January 2014, Mr. Ferrera was executive vice president and chief financial officer of Great Wolf Resorts, Inc. Previously, he served as executive vice president and chief financial officer of National CineMedia, L.L.C., a subsidiary of National CineMedia, Inc., from May 2007 through February 2013. Mr. Ferrera also currently serves as a director of Colorado Public Radio. Mr. Ferrera served in investment banking roles at CitiGroup and Bear Stearns and as an international tax consultant with Arthur Andersen. Additionally, Mr. Ferrera served in the U.S. Army Special Operations and U.S. Army Intelligence prior to earning his undergraduate and graduate degrees. Mr. Ferrera holds an M.B.A. from the Kellogg School of Management and a B.S. in Accounting from Bentley College, magna cum laude.

Timothy M. Hascall joined DigitalGlobe in October 2011 and currently serves as our Executive Vice President and Chief Operations Officer. Prior to joining us, from 2004 to 2011, Mr. Hascall served as a senior executive at TriZetto Corporation, most recently as President, Blue Cross/Blue Shield Market. Additionally, Mr. Hascall's prior experience includes General Manager, North America for Equitant, Inc. Mr. Hascall began his business career with Andersen Consulting, later Accenture, and was made partner in 1996. Mr. Hascall holds a Bachelor of Science in Business Administration from the University of Nebraska, and achieved the rank of Major in the United States Marine Corps, serving as an imagery intelligence officer.

Dr. Walter S. Scott is our founder and currently serves as our Executive Vice President and Chief Technical Officer, and General Manager of our US Government business. From 1986 through 1992, Dr. Scott held a number of technical, program and department management positions at the Lawrence Livermore National Laboratory, including serving as the Assistant Associate Director of the Physics Department. Prior to this, Dr. Scott served as President of Scott Consulting, a Unix systems and applications consulting firm. Since April 2013, Dr. Scott has served on the Board of Directors of The Open Geospatial Consortium (OGC), an international industry consensus standards organization. Dr. Scott holds a Bachelor of Arts in Applied Mathematics, magna cum laude, from Harvard College and a Doctorate and Master of Science in Computer Science from the University of California, Berkeley.

Daniel L. Jablonsky joined DigitalGlobe in March 2012 and currently serves as our Senior Vice President, General Counsel and Corporate Secretary. Prior to joining us, from 2011 to March 2012, Mr. Jablonsky was a shareholder at Brownstein Hyatt Farber Schreck, LLP, a law firm, where he practiced corporate and securities law. From 2010 to 2011, Mr. Jablonsky served as the Interim Co-General Counsel of Flextronics International Ltd. and from 2007 to 2010, Mr. Jablonsky served as Senior Corporate Counsel, Securities and Mergers & Acquisitions at Flextronics. Mr. Jablonsky previously was in-house counsel at UBS Financial Services, Inc., served in the enforcement division of the U.S. Securities and Exchange Commission, and practiced corporate and securities law with O'Melveny & Myers LLP. Mr. Jablonsky also served as an officer and nuclear engineer in the United States Navy prior to attending law school. Mr. Jablonsky holds a Bachelor of Science degree in Mechanical Engineering from the United States Naval Academy and a Juris Doctor degree from the University of Washington School of Law.

David B. ("Bert") Turner, Jr. joined DigitalGlobe in June 2012 and currently serves as our Senior Vice President, Diversified Commercial Sales and Marketing. Prior to joining DigitalGlobe, from 2003 to May 2012 Mr. Turner worked at IHS Inc., a global information company, most recently as Vice President, Strategy & Analysis and Supply Chain. At IHS, Mr. Turner led sales and business development for the Americas Strategy & Analysis sales teams. Prior to IHS, Mr. Turner was the senior business development leader for SAT Corporation, a field-force automation software company. Mr. Turner served as Executive Vice President and later President of iPath Solutions, a Houston-based e-business consulting firm, and served as Vice President of Global Shop Solutions, an ERP software firm. Mr. Turner holds a Bachelor of Business Administration degree from Baylor University with a double major in management information systems and quantitative business analysis.

Grover N Wray joined DigitalGlobe in December 2011 and currently serves as our Senior Vice President and Chief Human Resources Officer. Prior to joining DigitalGlobe, from 2005 to 2011 Mr. Wray led professional, organizational and leadership development initiatives as Executive Vice President of Human Resources at Western Union, a Fortune 500 company based in Englewood, Colorado, and as Vice President, Leadership, Professional Development and Staffing at Janus Capital Group. Mr. Wray also led human resources at Heidrick & Struggles and at Arthur Andersen, where in addition to leading human resources, he also advised clients on change management. Mr. Wray holds a Bachelor of Science in Sociology and a Masters of Organizational Behavior, both from Brigham Young University.

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Table of Contents

AUDIT RELATED MATTERS

Audit Committee Report

The Audit Committee Report is not deemed "soliciting material," is not "filed" with the SEC, is not subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act, and is not incorporated by reference into any past or future filing under the Securities Act of 1933, as amended ("Securities Act") or the Exchange Act, except to the extent the Company specifically requests that it be treated as soliciting material or specifically incorporates it by reference into a filing under the Securities Act or Exchange Act.

AUDIT COMMITTEE REPORT

The Audit Committee assists the Board of Directors in fulfilling its responsibilities by reviewing and overseeing the accounting, financial reporting, and internal controls processes of the Company. As of April 1, 2015, the Audit Committee consisted of three members, each of whom has been determined by the Board of Directors to be an audit committee financial expert (as defined by applicable SEC rules), and an independent director (as defined under the NYSE rules and Rule 10A-3 of the Exchange Act applicable to the Audit Committee members).

The Audit Committee operates pursuant to a written charter, as adopted by the Board of Directors, a copy of which is available on the Company Information page of our website under Governance Documents at http://investor.digitalglobe.com. As set forth in more detail in the Audit Committee's charter, the Audit Committee's primary responsibilities fall into three categories:

      Monitoring management's preparation and review of the quarterly and annual financial reports, including discussions with management and the Company's outside independent registered public accounting firm regarding significant accounting and reporting matters;

 

 


 

The appointment, compensation, retention and oversight of all of the work of our independent registered public accounting firm, as well as determining whether the independent registered public accounting firm is independent and qualified; and

 

 


 

Overseeing guidelines, policies and management's implementation of effective systems of internal controls and financial risk management.

In connection with these responsibilities, the Audit Committee met a total of 9 times during 2014. Audit Committee meetings are scheduled as necessary to ensure that adequate time and attention are devoted to all of the Audit Committee's obligations. The Audit Committee utilizes the expertise and knowledge of management and the independent auditor, and meetings are structured to allow for full discussion and, where appropriate, separate sessions with the Company's independent auditors and select management. In fulfilling its responsibilities and duties, in 2014 the Audit Committee, among other actions:

      reviewed and discussed with management and the independent auditor the Company's quarterly earnings press releases, consolidated financial statements (including the presentation of non-GAAP financial information and review of significant accounting policies and judgments), and related periodic reports prior to their release;

 

 


 

reviewed and discussed the effectiveness of the Company's compliance programs and its internal controls over financial reporting;

 

 


 

reviewed the scope of, and the overall plans for, the annual audit and internal audit program with management and the independent auditor;

 

 


 

monitored management's administration of processes and procedures, including the Company's use of the Ethicspoint® reporting system, for anonymous submissions of employee concerns and complaints in accordance with the Company's Code of Ethics and Business Conduct;

 

 


 

reviewed significant legal developments and the Company's processes for monitoring compliance with legal and regulatory requirements and Company policies;

 

 


 

inquired about significant business and financial reporting risks, reviewed the Company's policies for risk assessment and risk management, and assessed the steps management is taking to control these risks;

 

 


 

reviewed the Company's policy for the pre-approval of audit and permitted non-audit services by the independent auditor; and

 

 


 

met in periodic executive sessions with management or the independent auditor, including to discuss the results of their examinations, their evaluations of internal controls, and the overall quality of the Company's financial reporting.

As part of its oversight of the Company's financial statements, the Audit Committee reviewed and discussed with management and the Company's independent registered public accountants all annual and quarterly financial statements, including the fiscal year 2014 audited annual financial statements, prior to their issuance. These reviews included discussion with the independent registered public accountants of matters required to be discussed pursuant to Public Company Accounting Oversight Board Auditing Standard No. 16 (Communication With Audit Committees). The Audit Committee also discussed with PricewaterhouseCoopers LLP matters relating to its independence, including a review of audit and non-audit fees and the written disclosures and letter from PricewaterhouseCoopers LLP to the Audit Committee pursuant to applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountants' communications with the Audit Committee concerning independence.

Based upon the foregoing review and discussions and the report of PricewaterhouseCoopers LLP, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 for filing with the SEC.


The Audit Committee
Nick S. Cyprus, Chairman
Kimberly Till
Eddy Zervigon

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Table of Contents

Audit and Non-Audit Fees

PricewaterhouseCoopers LLP's charges for fiscal years 2014 and 2013 were as follows:

 

 

 
2014


2013

 

 

 

Audit Fees(1)

  $ 2,010,000   $ 3,074,000  

 

 

Audit-Related Fees

    -     -    

 

 

Tax Fees

  -   -  

 

 

All Other Fees(2)

    6,308     6,308    
(1)
Fees for the audit of our annual financial statements included in our annual report on Form 10-K, the audit of our internal control over financial reporting, the review of the financial statements included in our Quarterly Reports on Form 10-Q, and audit services provided in connection with regulatory filings.

(2)
Research software subscription fees.

Pre-Approval of Independent Auditor Services

All services, audit and non-audit, provided by the independent auditor must be pre-approved by the Audit Committee or its delegate. As set forth in its charter, the Audit Committee has the sole authority to review in advance, and grant any appropriate pre-approval of: (i) all auditing services to be provided by the independent registered public accounting firm and (ii) all non-audit services to be provided by the independent registered public accounting firm as permitted by Section 10A of the Exchange Act, and in connection therewith to approve all fees and other terms of engagement. Such pre-approval can be given as part of the Audit Committee's approval of the scope of the engagement of the independent registered public accounting firm or on an individual basis. The Audit Committee may delegate responsibility for pre-approval of non-auditing services to one or more of its members, but the decision must be presented to the full Audit Committee. In 2014 and 2013, all services of PricewaterhouseCoopers LLP were pre-approved by the Audit Committee.

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Table of Contents

2014 DIRECTOR COMPENSATION

Philosophy

The compensation program for the non-employee members of our Board of Directors ("Non-Employee Directors") is reviewed annually by the Compensation Committee and any changes to the program are approved by the Board of Directors. The Compensation Committee retains an independent Compensation Committee advisor to provide guidance on Executive Compensation matters. The Compensation Committee used both Towers Watson and Radford as its independent advisor in 2014 and continues in 2015 to use Radford as its primary advisor. The Company seeks to provide fair and equitable compensation to our Non-Employee Directors with a focus on the following:

      Attract and retain qualified and diversified individuals by providing an overall compensation package using comparable industry and market data;

 

 


 

Tie director compensation to shareowner interests by providing a significant portion of compensation in the form of equity awards that fluctuate in value with the Company's stock price.

In February 2014, after review of market benchmarks and input from the Compensation Committee and its independent compensation consultant, the Board of Directors approved a $25,000 increase in the value of the Annual Equity Retainer for our Non-Employee Directors, from $110,000 to $135,000, effective as of the beginning of the second quarter of 2014.

2014 Director Compensation Structure

For fiscal year 2014, our Non-Employee Directors were entitled to the following elements of compensation:

 

 

Board of Directors Service Compensation (All Non-Employee Directors)



Amount($)

 

 

Annual Cash Retainer(1)

  65,000  

 

 

Annual Equity Retainer(2)

    135,000    

 

 

 

Additional Service Compensation



Amount($)

 

 

Chairman of the Board of Directors Incremental Cash Retainer(1)

  35,000  

 

 

Chairman of the Board of Directors Incremental Equity Retainer(2)

    50,000    

 

 

Audit Committee Chair Incremental Cash Retainer(1)

  21,000  

 

 

Compensation Committee Chair Incremental Cash Retainer(1)

    16,000    

 

 

Governance Committee Chair Incremental Cash Retainer(1)

  13,500  

 

 

Risk Management Committee Chair Incremental Cash Retainer(1)

    13,500    

 

 

 

Newly Appointed Board Member Compensation



Amount($)

 

 

One-Time Equity Grant(2)

  170,000  
(1)
The Annual Cash Retainer and each of the Incremental Cash Retainers reported in the tables above are annualized amounts that are paid in equal quarterly installments in arrears and are pro-rated for Non-Employee Directors who join or depart the Board of Directors during the calendar year.

(2)
The Annual Equity Retainer, the Chairman of the Board of Directors Incremental Equity Retainer and the One-Time Equity Grant reported in the tables above are granted as restricted share units. Restricted share units granted to Non-Employee Directors are fully-vested at grant and are payable on a one-for-one basis in shares of Company common stock. The number of restricted share units awarded is determined by dividing the applicable dollar amount indicated above by the closing price of a share of Company common stock on the applicable grant date. The Annual Equity Retainer is granted in equal quarterly installments based on the normal quarterly Board of Directors meeting schedule, and newly appointed Non-Employee Director members of the Board of Directors are eligible to receive a one-time grant made on the date that their services commence. The Annual Equity Retainer is pro-rated for Non-Employee Directors who join or depart the Board of Directors during the calendar year. Non-Employee Directors may elect to defer receipt of up to 100% of their cash or equity retainer pursuant to the terms of our Deferred Compensation Plan, as described below.
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Table of Contents

2014 Non-Employee Director Compensation

The following table presents information regarding the compensation paid for fiscal year 2014 to each of our Non-Employee Directors. The compensation paid to Mr. Tarr, our President and Chief Executive Officer, for 2014 is discussed in the Executive Compensation section of this Proxy Statement. Mr. Tarr is not entitled to receive additional compensation for his service as a director.

 

 

Director(1)





Fees Earned or
Paid in Cash
($)(2)





Stock Awards
($)(3)




Total
($)


 

 

General Howell M. Estes, III

  $ 113,500   $ 178,836 (4) $ 292,336  

 

 

Nick S. Cyprus

    86,000     128,802 (5)   214,802    

 

 

Roxanne J. Decyk

  32,500   237,554 (6) 270,054  

 

 

Martin C. Faga

    78,500     128,802 (5)   207,302    

 

 

Lawrence A. Hough

  65,000   128,802 (5) 193,802  

 

 

Warren C. Jenson

    81,000     128,802 (5)   209,802    

 

 

Kimberly Till

  65,000   128,802 (5) 193,802  

 

 

James M. Whitehurst

    65,000     128,802 (5)   193,802    

 

 

Eddy Zervigon

  54,167   110,474 (7) 164,641  

 

 

General Michael P.C. Carns

    48,750     58,767 (8)   107,517    
(1)
Mr. Zervigon re-joined the Board of Directors effective March 1, 2014, General Carns served on the Board of Directors until May 28, 2014, and Ms. Decyk joined the Board of Directors on July 1, 2014.

(2)
The amount reported in this column for Mr. Whitehurst includes $61,000 of cash retainers that Mr. Whitehurst deferred under our Deferred Compensation Plan.

(3)
Amounts reported in this column of the table above represent the grant date fair value of stock awards computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions used in the FASB ASC Topic 718 calculations, see Note 2 "Summary of Significant Accounting Policies" to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2014.

    The following table shows the number of shares subject to outstanding and unexercised option awards and the number of shares subject to outstanding deferred restricted share units ("DSUs"), pursuant to elections made under our Deferred Compensation Plan described below, and held by each of the Non-Employee Directors as of December 31, 2014:

 

 

Director




Number of Shares Subject to
Outstanding Options




Number of Shares Subject to
Outstanding DSUs


 

 

General Howell M. Estes, III

  33,984   7,219  

 

 

Nick S. Cyprus

    -     5,171    

 

 

Roxanne J. Decyk

  -   8,583  

 

 

Martin C. Faga

    -     5,171    

 

 

Lawrence A. Hough

  -   5,171  

 

 

Warren C. Jenson

    32,512     5,171    

 

 

Kimberly Till

  -   -  

 

 

James M. Whitehurst

    17,847     5,171    

 

 

Eddy Zervigon

  -   -  
(4)
Includes the following grants awarded in 2014: 1,071 shares with a grant date fair value of $40,023 on February 5, 2014; 1,488 shares with a grant date fair value of $43,762 on April 23, 2014; 1,591 shares with a grant date fair value of $43,768 on July 23, 2014; 1,520 shares with a grant date fair value of $43,776 on October 22, 2014; and 271 shares with a grant date fair value of $7,507 on November 20, 2014.

(5)
Includes the following grants awarded in 2014: 736 shares with a grant date fair value of $27,504 on February 5, 2014; 1,063 shares with a grant date fair value of $31,263 on April 23, 2014; 1,136 shares with a grant date fair value of $31,251 on July 23, 2014; 1,086 shares with a grant date fair value of $31,277 on October 22, 2014; and 271 shares with a grant date fair value of $7,507 on November 20, 2014.

(6)
Includes the following grants awarded in 2014: a One Time Equity Grant of Company common stock of 6,180 shares with a grant date fair value of $170,012 on July 23, 2014 made in connection with Ms. Decyk's initial appointment to the Board of Directors on July 1, 2014; 1,136 shares with a grant date fair value of $31,251 on July 23, 2014; 1,086 shares with a grant date fair value of $31,277 on October 22, 2014; and 181 shares with a grant date fair value of $5,014 on November 20, 2014.

(7)
Includes the following grants awarded in 2014: 1,375 shares with a grant date fair value of $40,439 on April 23, 2014; 1,136 shares with a grant date fair value of $31,251 on July 23, 2014; 1,086 shares with a grant date fair value of $31,277 on October 22, 2014; and 271 shares with a grant date fair value of $7,507 on November 20, 2014.

(8)
Includes the following grants awarded in 2014: 736 shares with a grant date fair value of $27,504 on February 5, 2014; and 1,063 shares with a grant date fair value of $31,263 on April 23, 2014.
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Table of Contents

Other Director Compensation Considerations

Travel Expenses and Continuing Education
We also reimburse our directors for their travel costs and expenses relating to attendance at Board of Directors and Board of Directors committee meetings. In addition, the Company will reimburse certain expenses incurred by a director in connection with attendance at approved continuing education programs.

Deferred Compensation Plan
Each Non-Employee Director may defer receipt of up to 100% of his or her cash fees or equity retainer pursuant to the DigitalGlobe Deferred Compensation Plan ("Deferred Compensation Plan"), as discussed in more detail in the Compensation Discussion and Analysis Section of this Proxy Statement below under the section entitled Executive Policies, Provisions and Agreements. If equity is deferred, the director is credited with a number of share units equal in number to the shares that would have been granted to the director. If cash is deferred, participants in the Deferred Compensation Plan, specify one or more benchmark fund(s) in which his or her cash deferrals will be deemed to be invested for purposes of crediting the cash deferrals with earnings or losses. In general, amounts deferred are not paid until a date elected by the director. At the end of the applicable deferral period, the director receives a share of Company common stock for each share unit credited under the plan, and the director's cash deferrals are paid in cash. Payments are made either in a lump sum or over a period not to exceed 10 years, as elected in advance by each director.

Non-Employee Director Stock Ownership Guidelines
We maintain stock ownership guidelines ("Stock Ownership Guidelines") for our Non-Employee Directors. Under the Stock Ownership Guidelines, each Non-Employee Director should hold, for his or her tenure with the Company, Qualifying Shares with a value equal to at least three times (3x) the director's annual cash retainer (for 2014, the annual cash retainer is $65,000). For these purposes, "Qualifying Shares" include: (i) shares of Company common stock held by the director in a brokerage account, or for the director's benefit (or their beneficiaries) in trust, or through a tax qualified retirement plan, (ii) Company shares or restricted share units (whether vested or unvested) held by the director, and (iii) shares having a value equal to 50% of the aggregate spread (the difference between the fair market value of the Company's common stock less the exercise price of the options) on vested Company stock options held by the director. Non-Employee Directors are expected to achieve the applicable level of holdings under the Stock Ownership Guidelines within five years from the date of adoption of the guidelines, December 13, 2010 or, as to directors who first joined the Board Directors after that date, within five years from the date that they first joined the Board of Directors. The Board of Directors may change the terms of our Non-Employee Director compensation program from time to time.

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Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CD&A)

For ease of use when navigating the CD&A, below is a CD&A specific table of contents:

EXECUTIVE COMPENSATION PROGRAM OVERVIEW

  20

2014 Company Performance

  20

Compensation Changes from Shareowner Engagement and Say-on-Pay Consideration

  20

Performance Driven Total Compensation Package

  21

IMPLEMENTATION OF COMPENSATION BEST PRACTICES

 
21

Compensation Philosophy

  21

Overall Best Practices Structures

  22

The Executive Compensation Decision Making Process

  22

Independent Compensation Consultant

  23

Peer Group

  23

Changes to Short Term Incentive Program - Corporate Strategic Objective Modifier

  24

Changes to 2015 - 2017 Total Shareholder Return

  24

2014 EXECUTIVE COMPENSATION RESULTS

 
25

Named Executive Officers

  25

Executive Success Sharing Plan Targets and Awards

  25

2014 Target Compensation Summary

  25

2014 Base Salary

  25

2014 Short Term Incentive Awards

  25

2014 Long Term Incentive Awards

  27

2014 - 2016 Performance Share Unit Metrics

  29

EXECUTIVE POLICIES, PROVISIONS AND AGREEMENTS

 
29

Stock Ownership Guidelines

  29

Executive Non-qualified Deferred Compensation

  29

Clawback Policy

  30

Anti-Hedging and Pledging Policy

  30

Interim Chief Financial Officer Compensation Arrangement

  30

Former Chief Financial Officer Separation Agreement

  30

Chief Executive Officer Employment Agreement

  30

Benefits Payable to Other Named Executive Officers

  31

Pension Benefits

  32

Tax Considerations

  32
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Table of Contents

Executive Compensation Program Overview

DigitalGlobe has consistently designed its executive compensation programs with a strong connection between pay and performance. We continue to be proactive in our approach to aligning executive compensation and shareowner interests and have made a number of important changes this year in order to ensure that we adopt and maintain best practices for motivating and retaining our executives while remaining aligned with shareowner interests. In 2014, this resulted in 87% of targeted CEO pay and 76% of targeted Named Executive Officer ("NEO") pay being performance-based. We have also developed a portfolio of metrics linking executive pay to consolidated revenue, EBITDA Margin, return on invested capital and total shareholder return. We believe that our balanced, performance-based approach best serves the short and long term interests of shareowners, and are pleased to report these results in the pages that follow.

2014 Company Performance

Performance Highlights
2014 was a milestone year for DigitalGlobe, as we transitioned from a period of heavy capital investment, in which we built the world's leading earth observation constellation, to a new era of growth, margin expansion, strong free cash flow and improving returns. We believe these financial and operational metrics, detailed below, are important measures for the creation and sustainment of shareowner value.

      We grew revenue by 7% to $655 million, including double-digit growth in our U.S. Government and Direct Access businesses

 

 


 

We delivered Adjusted EBITDA of $286 million, driving a margin of 44%, up more than 600 basis points year-over-year and ended 2014 with a fourth quarter Adjusted EBITDA Margin of 50%*

 

 


 

We delivered cumulative Total Shareholder Return ("TSR") of 81% for the three year period ending December 31, 2014, significantly exceeding the three-year TSR of the Russell 2000 Index during the same period

 

 


 

We successfully launched and commissioned WorldView-3, the world's most advanced commercial earth imaging satellite

 

 


 

We completed our GeoEye integration and the realization of $120 million in annual synergy savings, well above our original target

 

 


 

We developed new products and capabilities that took us deeper into attractive verticals, and completed the acquisition of Spatial Energy

 

 


 

We returned value to our shareowners, repurchasing more than $75 million of our stock
      *
      Adjusted EBITDA and Adjusted EBITDA Margin are non-U.S. GAAP financial measures. For these purposes, Adjusted EBITDA represents net income before interest, taxes, and depreciation and amortization expense, and excludes restructuring charges, integration costs, acquisition costs, loss from early extinguishment of debt, and loss on abandonment of asset. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by U.S. GAAP revenue. For a reconciliation of Adjusted EBITDA to net income, please see "Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Disclosures" of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2015.

Compensation Changes from Shareowner Engagement and Say-on-Pay Consideration

The Compensation Committee continues to focus on ensuring executive compensation aligns to the long term interests of DigitalGlobe shareowners. At the 2014 Annual Meeting, approximately 76% of the non-binding advisory votes were cast to approve our NEO compensation, commonly referred to as a "Say-on-Pay" vote. This result was slightly lower than previous years. As a result, we enhanced our annual shareowner outreach, and held conversations and/or in-person meetings with our top 25 shareowners, representing more than 90% of our outstanding shares, to gather additional insight and perspective on our executive compensation programs. While the overall feedback was highly positive, we have highlighted areas below where we determined, in connection with our independent compensation consultant, that we could increase the effectiveness of our executive compensation programs and disclosures.

      What We Heard

What We Did


Page

    Insufficient disclosure of Long Term Incentive ("LTI") Plan goals   Enhanced disclosure in this year's proxy to provide more insight into the LTI plan metrics and outcomes   27  
    Absence of a formal clawback policy   Implemented a clawback policy     30    
    Single-trigger change of control provisions in executive equity awards   Revised the two remaining executive agreements that contained single-trigger provisions to ensure that all cash and equity awards are subject to double-trigger change of control provisions   31  
    Peer Group contained too many aspirational components   Revised the peer group with input from our independent compensation consultant to ensure the peer group was balanced in terms of relative size     23    
    TSR awards should target payouts above the 50th percentile with a cap if TSR is negative   Revised the vesting schedule on new awards to require TSR above 50th percentile performance for target payouts, implemented a cap at 100% if TSR is negative, and increased the maximum payout at 90th percentile performance, vs. 75th percentile   24  
    High discretionary payouts of Short Term Incentive ("STI") awards   Changed the structure of the Corporate Strategic Objective portion of the bonus to be based on quantitative factors, and capped the potential payout modifier at 150%     26    
    Better explain how performance targets were set and year-over-year differences   Enhanced disclosure in this year's proxy to provide greater clarity around how metrics are set year-over-year   28  
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Table of Contents

Performance Driven Total Compensation Package

Our compensation programs are designed to reward executives for producing sustainable growth in shareowner value consistent with the Company's strategic plan, to attract and retain world-class talent and to align compensation with the interests of shareowners. The Compensation Committee strongly believes that executive compensation pay opportunities, realizable pay and pay actually realized should be tied to Company performance in both the short and long term.

      In the short term - we pay an annual salary and provide for an annual bonus that rewards performance against objectives for revenue growth, EBITDA Margin, and strategic corporate objectives

 

 


 

In the long term - we reward executives relative to 3 year performance against Return on Invested Capital ("ROIC"), total shareholder return, and with time-vested equity

Below is the average 2014 targeted pay mix for DigitalGlobe's CEO and NEOs with 87% of the CEO pay and 76% of the NEO pay performance based.

Graphic

Implementation of Compensation Best Practices

Compensation Philosophy

A key component of our business strategy is to provide appropriate incentives to attract, retain, and motivate top talent. The Compensation Committee has designed CEO and executive total compensation packages to drive actions that align with both the short term and long term interests of our shareowners. We met these objectives by applying the following principles:

      Pay at Risk Tied to Company Performance: Support the overall business objectives by aligning a substantial portion of executive total compensation to our financial and operating performance with 87% of CEO pay and 76% of NEO pay tied to performance

 

 


 

Market Competitive Compensation: Compensate executives at the 50th percentile for target total cash compensation and between the 50th and 75th percentile for target total equity compensation, when compared against the Company's designated peer group and the Radford High Technology Survey

 

 


 

Shareowner Alignment: Ensure the linkage between our executives' and our shareowners' interests through issuing awards with payouts tied directly to the Company's financial performance and the value of our common stock

 

 


 

Benchmarking: Benchmark compensation packages against a selected peer group and the Radford High Technology Survey, to ensure market competitive Total Direct Compensation

 

 


 

Absolute and Relative Pay for Performance: Align key performance metrics, EBITDA Margin, revenue growth, TSR and ROIC, with executive pay
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Overall Best Practices Structures

We continued to utilize key "best practices" in compensating our executives:

    What We Do

What We Don't Do

 
    Pay for Performance: Aligned executive compensation with corporate and individual performance. 87% and 76% of the CEO and NEO pay is performance-based pay.   No Excise Tax Gross-Ups  
    Double Trigger: Updated the two remaining Executive Officer employment arrangements that still had single-trigger provisions for legacy equity awards in the event of a change of control.   No Current Payment of Dividend Equivalents on Unvested Long Term Incentives    
    Clawback Policy: Implemented an incentive recoupment policy for performance-based cash and equity awards for our Executive Officers. The policy is in addition to CEO and CFO policies under Sarbanes Oxley and provisions attached to any grant issued to any employee under our 2007 Plan.   No Repricing of Underwater Stock Options  
    Stock Ownership Guidelines: Our guidelines require our directors and executives to have an equity interest in the Company valued at 1.5x, 3x, and 5x multiples of base salary or cash retainers. All of our current officers and directors are on target to meet or exceed the requirements.   No Pledging, Hedging, Short Sales, or Derivative Transactions    
    Independent Compensation Consultant: Conducted a search for a new independent executive compensation consultant and selected Radford.    
    Capped Award Payouts: Set maximum award levels of 200% under the annual cash incentive plan and the performance share unit long term incentive programs.        
    Mitigation of Risk: Conducted an annual risk assessment, facilitated by our independent compensation advisor, of our compensation policies and practices covering all employees.    

The Executive Compensation Decision Making Process

The Compensation Committee seeks to take all relevant factors into account in determining executive compensation. The Compensation Committee reviewed recommendations from our CEO for compensation awards and adjustments for our other NEO's, and obtained input and advice from our independent compensation consultants. The Board, upon recommendation from the Compensation Committee, reviewed and approved CEO and NEO performance awards and compensation. The roles and responsibilities of all parties involved with executive compensation are outlined below:

    ROLE

RESPONSIBILITIES

 

 

 

Shareowners

 

-

Cast advisory vote on executive compensation

-

Approve, with the Board of Directors, share increases or certain other changes to equity plans

 

 

 

Board of
Directors

 

-

Evaluate CEO performance, which is used to make compensation decisions

-

Approve share increases or changes to equity plans (subject to shareowner approval in certain cases)

-

Review and approve CEO and NEO compensation

-

Review and approve the Proxy Statement

   

 

 

Compensation
Committee


 

-

Approve:

-

achievement of STI and LTI targets for calculation of bonus payments

-

metrics and targets to be used with both STI and LTI compensation

-

equity awards

-

Peer Groups used for executive compensation

-

Recommend to the Board of Directors adjustments to CEO and NEO base salary and bonus payouts

 

 

 

Independent
Compensation
Consultant

 

-

Provide to the Compensation Committee:

-

input on pay philosophy, best practices, market trends, shareowner interests, and relevant regulatory mandates

-

advice on relevant peer groups and companies

-

advice for design of STI and LTI compensation, and changes to equity plans

-

insight and interpretation on market studies and other reports on executive compensation pay and vehicles

-

Review and provide an independent assessment of the data and materials presented by management to the Compensation Committee

-

Participate in Compensation Committee meetings as requested

-

Review the CD&A and provide input to the Compensation Committee

   

 

 

CEO

 

-

Evaluates executive performance and recommends adjustments to executive base salary and STI and LTI compensation

-

Develops internal financial goals for the STI and LTI programs, which are presented to the Compensation Committee for approval

 

 

 

 

 

 

 

 
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Independent Compensation Consultant

Towers Watson served as the independent compensation advisor to the Compensation Committee from January through October of 2014. As part of the Compensation Committee's review process, and given the increased size and complexity of DigitalGlobe compared to prior years, the Compensation Committee interviewed independent firms that focused on growth companies in the high-tech industry. After a thorough vetting and selection process, the Compensation Committee selected Radford, an Aon Hewitt Company ("Radford"), as the Compensation Committee's new independent compensation consultant in October 2014. Both consulting firms reported directly to and worked for the Compensation Committee. Neither Towers Watson nor Radford provided any other services to the Company, other than advising the Board of Directors and the Compensation Committee with respect to compensation arrangements for the Company's non-employee directors. The Compensation Committee has assessed the independence of both Towers Watson and Radford and concluded that both are independent and that their respective engagements do not raise any conflict of interest with the Company or any of its directors or executive officers.

Peer Group

After engaging Radford, the Compensation Committee directed Radford to assess the appropriateness of DigitalGlobe's peer group. Radford and the Compensation Committee determined that the use of Radford's High Tech grouping of companies, along with the Company's selected Peer Group, appropriately represented companies against which DigitalGlobe competes for the specialized talent and experience required of our NEOs. Radford used the following principal considerations when developing the new peer group:

      Industry Affiliation - Companies in the Satellite & Geospatial, Business Information and Defense industries

 

 


 

Revenues - Revenues in the range of $250 Million to $2 Billion

 

 


 

Market Capitalization - Market Capitalization in the range of .3 to 3 times DigitalGlobe's market cap, or $700 Million to $6 Billion for 2014

In applying these criteria, Radford recommended the following changes to rebalance the peer group. Prior to the rebalance, DigitalGlobe was at the 22nd percentile for revenue and 42nd percentile for market cap compared to the peer companies. When rebalanced in November, DigitalGlobe was at the 34th percentile for revenue and 54th percentile for market cap compared to the Company's peers. In establishing a list of potential peer companies, the Compensation Committee placed less emphasis on revenue size, given that DigitalGlobe operates at a much higher margin structure than other companies in the peer group, which is consistent with performance metrics investors use to assess DigitalGlobe financial performance.

New Peers

    Peer



Revenue*
($)





Market
Capitalization*
($)



Industry

    comScore   315   1,274   Business Information Services  
    Forrester Research     303     719   Information Consulting    
    NeuStar   949   1,391   Data Processing  
    Qlik Technologies     536     2,284   Business Information Services    
    The Advisory Board   539   1,810   Research and Consulting  
    The KEYW Holding Corporation     281     387   Aerospace and Defense    

Excluded Peers

    Peer



Revenue*
($)





Market
Capitalization*
($)



Reason for Exclusion

    Equifax Inc.   2,390   8,857   The company's business model is not comparative to ours and is no longer a relevant industry peer  
    NCI, Inc.     323     122   Revenue and Market Capitalization are both well below thresholds    
    Loral Space & Communications, Inc.   N/A   2,182   The company has undergone a corporate change and is no longer a relevant peer  
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Resulting Peer Group for our 2015 Benchmarking: Current Peers

 

 

Peer




Revenue*
($)




Market
Capitalization* ($)


Geospatial/
Satellite


Business
Information


Defense

 

 

DigitalGlobe

  639   2,155   X   X   X  

 

 

Acxiom Corporation

  1,083   1,317     X    

 

 

comScore, Inc.

    316     1,274       X        

 

 

Corporate Executive Board Co.

  892   2,089     X    

 

 

CoStar Group Inc.

    536     4,744       X        

 

 

FactSet Research Systems Inc.

  920   5,179     X    

 

 

Fair Isaac Corporation

    758     1,816       X        

 

 

FLIR Systems, Inc.

  1,479   4,292       X  

 

 

Forrester Research Inc.

    303     719       X        

 

 

Gartner Inc.

  1,898   6,717     X    

 

 

IHS Inc.

    2,208     8,589       X        

 

 

Iridium Communications Inc.

  406   832   X      

 

 

Kratos Defense & Security Solutions

    892     374   X       X    

 

 

NeuStar, Inc.

  949   1,391     X    

 

 

Orbital Sciences Corp.

    1,355     1,688   X       X    

 

 

Qlik Technologies, Inc.

  536   2,284     X    

 

 

The Advisory Board Company

    539     1,810       X        

 

 

The KEYW Holding Corporation

  281   387   X     X  

 

 

Trimble Navigation Limited

    2,403     7,548   X            

 

 

Verisk Analytics, Inc.

  1,699   10,007     X    

 

 

ViaSat Inc.

    1,350     2,615   X       X    

 

50th Percentile / % of Sector Type

  $ 906   $ 1,952   30%   65%   25%    
*
Revenue is trailing 4 quarters as of November 3, 2014 and Market Capitalization data is as of November 3, 2014. Figures are provided by Radford and dollars are presented in millions.

Changes to Short Term Incentive Program - Corporate Strategic Objective Modifier

After a review of STI plan design best practices with Radford and feedback from investors, the Compensation Committee modified the Corporate Strategic Objective portion of the bonus to be based on quantitative Corporate Strategic Objectives, as well as an assessment of the executive's individual performance, as described in more detail below. To ensure this portion of our plan did not overly award the executives if the Consolidated Revenue and EBITDA Margin financial results were not achieved, we capped the payout of this component at 150%. This change took effect in 2014 and is reflected in 2014 payouts.

Changes to 2015 - 2017 Total Shareholder Return

The Compensation Committee conducted a review of LTI plan design with Radford in November 2014 and made the following changes to the TSR component of our performance share awards granted on February 18, 2015. These changes ensure payout levels are appropriately tied to shareowner returns:

      Adjusted the target payout to be above median, meaning we pay at 100% for achieving the 55th percentile

 

 


 

Introduced a negative TSR cap, meaning that if the stock price performance at the end of the 3 year period is negative, regardless of percentile rank, payouts are capped at 100%

 

 


 

Modified the upside such that to get 200% payout, the Company must be at the 90th percentile vs. the original plan of the 75th percentile

Revised 2015 Relative TSR Payout Scale

 

 

Percentile*



Payout with Positive TSR


Payout with Negative TSR

 

 

Below 25th

  0 % 0 %

 

 

25th

    55 %   55 %  

 

 

55th

  100 % 100 %

 

 

75th

    150 %   100 %  

 

 

90th and above

  200 % 100 %
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2014 Executive Compensation Results

The Company grew in size and complexity due to the acquisition of GeoEye in 2013. The Board of Directors felt it was important to retain and recruit the high-caliber leadership necessary for the combined organization not only because of increased revenues, market capitalization and complexity, but also because of its increased global importance and business opportunity. The Compensation Committee evaluated the executive team's compensation against the then-current Company peer group and determined that a significant disparity existed between our executive compensation and peer group median compensation. The Compensation Committee determined to move deliberately to bring the executive team's compensation closer to the peer and survey group's mean over a two year period, and factored in the decision that the base salary adjustments, in the short term, might be considered outsized relative to certain peers. In 2015, following completion of this plan, annual base salary increases will return to adjustments in-line with market conditions.

Named Executive Officers

This Compensation Discussion and Analysis focuses on compensation for our Named Executive Officers ("NEOs") that represent the pay structure used for all of our executive officers. Our 2014 Named Executive Officers and their titles were as follows:

    Name

Title

    Jeffrey R. Tarr   President and Chief Executive Officer  
    Yancey L. Spruill*   Executive Vice President, Chief Financial Officer    
    Fred A. Graffam*   Senior Vice President, Financial Planning & Analysis and Interim Chief Financial Officer  
    Walter S. Scott   Executive Vice President and Chief Technical Officer    
    Timothy M. Hascall   Executive Vice President, Operations and Customer Experience  
    David B. Turner, Jr.   Senior Vice President, Sales and Marketing    
*
Effective September 3, 2014, Yancey Spruill separated from the Company and resigned as our Executive Vice President, Chief Financial Officer. On the same date, Fred Graffam was named our Interim Chief Financial Officer and his compensation is described in the "Interim Chief Financial Officer Compensation Arrangement" section below.

Executive Success Sharing Plan Targets and Awards

The Executive Success Sharing Plan is the short and long term incentive compensation plan, which provides executives with the ability to earn both annual cash incentives and long term incentive grants based on both Company financial metrics and individual strategic objectives.

2014 Target Compensation Summary

The table below illustrates the Total Direct Compensation ("TDC") potential based on awards and compensation targets established in the 2014 compensation planning year.

    Name


Salary($)


Bonus Target - STI


LTI($)


TDC($)

 
    Jeffrey R. Tarr   690,000   100 % 3,840,000   5,220,000  
    Yancey L. Spruill     380,000     70 %   850,000     1,496,000    
    Walter S. Scott   360,000   70 % 850,000   1,462,000  
    Timothy M. Hascall     360,000     70 %   1,000,000     1,612,000    
    David B. Turner, Jr.   355,000   65 % 850,000   1,435,750  

2014 Base Salary

The table below shows annual base salary in 2013 and 2014. The year over year increases in base salary reflect the second year of the Compensation Committee's plan to align NEO compensation to market median levels.

 

 

Name



2013($)


2014($)

 

 

 

Jeffrey R. Tarr

  630,000   690,000  

 

 

Yancey L. Spruill

    360,000     380,000    

 

 

Walter S. Scott

  330,000   360,000  

 

 

Timothy M. Hascall

    330,000     360,000    

 

 

David B. Turner, Jr.

  325,000   355,000  

2014 Short Term Incentive Awards

The Compensation Committee established a target opportunity for NEOs. Based on the market assessment conducted by the independent compensation advisor in February 2014, the following changes were recommended to the short term incentive targets under the Executive Success Sharing Plan. Incentive targets were set for each executive level based on the market review of the appropriate total direct

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Table of Contents

compensation levels for each of the NEO roles. The Compensation Committee approved the following annual cash incentive target increases to more closely align each level with market pay levels.

 

 

Name



2013


2014

 

 

 

Jeffrey R. Tarr

  100 % 100 %

 

 

Yancey L. Spruill

    60 %   70 %  

 

 

Walter S. Scott

  60 % 70 %

 

 

Timothy M. Hascall

    60 %   70 %  

 

 

David B. Turner, Jr.

  60 % 65 %

Components and Results of the Short Term Incentive Plan

The Compensation Committee used both financial and strategic metrics for the 2014 STI performance cycle and approved payout factors based on achievement at the threshold, target and maximum levels. For 2014, 35% of the target cash incentive was based on 2014 Adjusted EBITDA Margin, 35% was based on 2014 Consolidated Revenues and the remaining 30% was based on achievement of individual and Corporate Strategic Objectives.

Financial Metrics

The table below illustrates the financial metrics approved by the Compensation Committee for the 2014 Short Term Cash Incentive Plan:

    Performance Type ($ in millions)


Weighting


Threshold


Target


Maximum


Actual

 
    Adjusted EBITDA Margin *   35 % 39 % 46 % 53 % 71.7 %
    Consolidated Revenue     35 % $ 607   $ 660   $ 713     95.9 %  
    Payout   70 % 25 % 100 % 200 % 83.8 %  
*
Adjusted EBITDA Margin is a non-U.S. GAAP financial measure. For purposes of the Short Term Cash Incentive Plan, Adjusted EBITDA Margin represents net income before interest, taxes, and depreciation and amortization expense, and excludes restructuring charges, integration costs, acquisition costs, loss from early extinguishment of debt, loss on abandonment of asset, and annual incentive compensation expense, the total of which is divided by U.S. GAAP revenue.

Corporate Strategic Objective Metrics

Thirty percent (30%) of the Executive Success Sharing Plan executive payouts were determined by DigitalGlobe's quantitative performance against goals in the four Focus Areas of EnhancedView Success, Profitable Customer Growth, Operational Excellence and Culture of Leadership. All goals were set in the first quarter of the year.

    Focus Areas

  Goals

  Measurement

 
Score

 
               
    EnhancedView     EV Execution: Achieve all EV milestones and metrics,
including WV-3 Full Operating Capacity (FOC)

 
  Avoidance of performance penalties     150%  
             
    Success     EV Funding: Achieve full EV funding through 2020 by
increasing commercial imagery adoption


  SLA funding plus added revenue      
           
        Growth: Profitably grow revenue from all targeted
customer segments beyond the EV SLA

 
  Amount of 12-month backlog at year end      
             
    Profitable Customer Growth     Diversification: Grow Diversified Commercial revenue through focus on International Civil, LBS, and Other Industry Verticals     Amount of revenue for International Civil, LBS, and Other Industry Verticals     50%  
             
        Offerings: Profitably grow Information and Insight revenue from existing and new capabilities, including GBD     Information and insight revenue      
           
    Operational     Quality: Improve quality of products and customer experience to deliver superior customer value     C2C Quality Score     100%  
             
    Excellence     Efficiency and Scalability: Achieve all synergies of the combination and build a more scalable business for the future

  EBITDA for 4Q14      
           
    Culture of Leadership     Culture: Behave according to our Purpose, Vision and Values to build team member engagement and drive performance     Team member engagement score relative to comparison companies     150%