DEF 14A 1 a2233278zdef14a.htm DEF 14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.             )

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Filed by a party other than the Registrant o

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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 Pursuant to §240.14a-12

 

ZAYO GROUP HOLDINGS, 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.
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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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Notice of Annual Meeting of Stockholders

November 2, 2017
7:30 a.m. (Mountain Time)
  ZAYO GROUP HOLDINGS, INC.
1805 29th Street, Suite 2050
Boulder, CO 80301

Items of Business

1.
Election of the three directors named in the proxy statement;

2.
Ratification of KPMG LLP as our independent registered public accounting firm;

3.
Advisory vote approving executive compensation;

4.
Approval of Performance Criteria Under the 2014 Stock Incentive Plan; and

5.
Transact such other business as may properly come before the meeting or any adjournment thereof.

Notice is hereby given that the 2017 Annual Meeting of Stockholders of Zayo Group Holdings, Inc. will be held virtually via live webcast on Thursday, November 2, 2017, at 7:30 a.m. (Mountain Time). The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/zayo2017, where you will be able to listen to the meeting live, submit questions and vote online. To participate in the Annual Meeting, you will need the 16-digit control number included on your notice of Internet availability of the proxy materials.

Only stockholders of record at the close of business on September 8, 2017 are entitled to notice of, and to vote at, the virtual meeting and any adjournments thereof. For ten days prior to the meeting, a complete list of the stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder for any purpose germane to the meeting during ordinary business hours at our headquarters in Boulder, Colorado and such list will be made available during our virtual meeting at www.virtualshareholdermeeting.com/zayo2017.

Your vote is important. Voting over the Internet or by telephone, written proxy or voting instruction card will ensure your representation at the Annual Meeting regardless of whether you attend the virtual meeting.

By Order of the Board of Directors,

/s/ WENDY CASSITY   September 22, 2017

Wendy Cassity
Vice President, General Counsel & Secretary

Internet   Telephone   Mail   Virtual Meeting
             
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Visit the Web site noted on your proxy card to vote via the Internet.   Use the toll-free telephone number on your proxy card to vote by telephone.   Sign, date and return your proxy card in the enclosed envelope to vote by mail.   Attend the virtual meeting.

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PROXY STATEMENT   1
Summary   1
Please Vote   1
Voting and Quorum, Abstentions and Broker Non-Votes   1
Required Votes   3
Revocation and Voting of Proxies   3
Proxy Solicitation   4
Attending the Virtual Annual Meeting   4
Voting Results   4
PROPOSAL 1. Election of Directors   5
PROPOSAL 2. Ratification of Appointment of Independent Registered Public Accounting Firm   10
PROPOSAL 3. Advisory Vote Approving Executive Compensation   12
PROPOSAL 4. Approval of Performance Criteria Under The 2014 Stock Incentive Plan   13
CORPORATE GOVERNANCE   23
Board Composition   24
Classified Board   24
Director Independence   24
Committees of the Board   24
Code of Ethics   29
Board Leadership Structure   29
Risk Oversight   29
Selection of Board Nominees   30
Director Qualifications   30
Stockholder or Other Interested Party Communications   31
Director Attendance   31
EXECUTIVE OFFICERS   32
COMPENSATION DISCUSSION AND ANALYSIS   33
Executive Summary   33
Compensation Philosophy   36
Executive Compensation Governance and Processes   38
Elements of Executive Compensation   40
Stock Ownership Guidelines   48
Pledging and Hedging of Company Securities   48
Risk Considerations in Compensation Programs   49
Summary Compensation Table   50
Compensation Committee Interlocks and Insider Participation   55
EQUITY COMPENSATION PLAN INFORMATION   56
COMPENSATION COMMITTEE REPORT   57
AUDIT COMMITTEE REPORT   58
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT   60
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS   62
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE   64
STOCKHOLDER PROPOSALS   64
NO INCORPORATION BY REFERENCE   65
OTHER MATTERS   65
GENERAL INFORMATION   65
EXHIBIT A   A-1

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2017 Proxy Statement

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Proxy Statement
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Summary

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board") of Zayo Group Holdings, Inc. ("Zayo" or the "Company") for the Annual Meeting of Stockholders of the Company to be held virtually on Thursday, November 2, 2017, at 7:30 a.m. (Mountain Time), and any adjournment or postponement thereof (the "Annual Meeting"). The virtual Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/zayo2017, where you will be able to listen to the meeting live, submit questions and vote online.

In this document, the words "Zayo," the "Company," "we," "our," "ours," and "us" refer only to Zayo Group Holdings, Inc. and not any other person or entity.

We are taking advantage of Securities and Exchange Commission ("SEC") rules that allow us to deliver proxy materials to our stockholders on the Internet. Under these rules, we are sending our stockholders a one-page notice regarding the Internet availability of proxy materials instead of a full printed set of proxy materials. Our stockholders will not receive printed copies of the proxy materials unless specifically requested. Instead, the one-page notice that our stockholders receive will tell them how to access and review on the Internet all of the important information contained in the proxy materials. This notice also tells our stockholders how to submit their proxy card on the Internet and how to request to receive a printed copy of our proxy materials. We expect to provide notice and electronic delivery of this proxy statement to such stockholders on or about September 22, 2017.

Please Vote

Whether or not you plan to attend the virtual annual meeting, we encourage you to vote promptly. A person giving a proxy has the power to revoke it. If you attend the virtual annual meeting, you may revoke your proxy and vote via the virtual meeting website.

Proposal     Board Voting
Recommendation
  Page
Reference

Proposal No. 1

 

the election of the three directors named in this proxy statement

 

FOR

 

Page 5
Proposal No. 2   the ratification of KPMG LLP as our independent registered public accounting firm   FOR   Page 10
Proposal No. 3   an advisory vote approving executive compensation   FOR   Page 12
Proposal No. 4   approval of performance criteria under the 2014 Stock Incentive Plan   FOR   Page 13

Voting and Quorum, Abstentions and Broker Non-Votes

Only holders of record (the "Stockholders") of our common stock (the "Common Stock") as of the close of business on September 8, 2017 (the "Record Date") will be entitled to notice of and to vote at the Annual Meeting. At September 8, 2017 there were 246,487,674 shares of Common Stock outstanding. You may vote all shares owned by you as of the Record Date, including (i) shares held directly by you in your name as the Stockholder of record, and (ii) shares held for you as the beneficial owner in street name through a broker, bank, trustee or other nominee.

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PROXY SUMMARY

Stockholder of Record.    If, on the Record Date, your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, then you are considered the stockholder of record with respect to those shares. As a stockholder of record, you are entitled to vote in any one of the following ways:

  Internet   Telephone   Mail   Virtual Meeting

 

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Stockholders can vote on the Internet by following the instructions provided in the one-page notice regarding the Internet availability of proxy materials.

 

Stockholders can vote over the telephone using the toll-free telephone number obtained by accessing the website set forth in the instructions provided in the one-page notice regarding the Internet availability of proxy materials.

 

Stockholders can vote by mail after requesting a paper copy of the proxy materials, including a proxy card, by following the instructions provided in the one-page notice regarding the Internet availability of proxy materials.

 

Stockholders who choose to attend the virtual Annual Meeting can vote via the virtual meeting website by visiting www.virtualshareholdermeeting.com/zayo2017. You will need the 16-digit control number included on your notice of Internet availability of proxy materials in order to participate in the virtual Annual Meeting. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com. Even if you plan to participate in the Annual Meeting online, we recommend that you also vote by proxy as described below so that your vote will be counted if you later decide not to participate in the Annual Meeting.

Beneficial Owner.    If, on the Record Date, your shares were held in an account with a brokerage firm, bank or other nominee, then you are the beneficial owner of the shares held in street name. As a beneficial owner, you have the right to direct your nominee on how to vote the shares held in your account, and your nominee has enclosed or provided voting instructions for you to use in directing it on how to vote your shares. However, the organization that holds your shares is considered the stockholder of record for purposes of voting at the Annual Meeting. Because you are not the stockholder of record, you may not vote your shares at the virtual Annual Meeting unless you request and obtain a valid proxy from the organization that holds your shares giving you the right to vote the shares at the Annual Meeting.

Each share of Common Stock is entitled to one vote on all matters on which Stockholders may vote. There is no cumulative voting in the election of directors. The presence, in person or by proxy, of a majority of the voting power of the Common Stock outstanding and entitled to vote is necessary to constitute a quorum at the Annual Meeting. Shares of Common Stock represented by a properly executed and returned proxy will be treated as present at the Annual Meeting for purposes of determining the presence of a quorum without regard to whether the proxy is marked as casting a vote for or against, or withholding authority or abstaining with respect to a particular matter.

Broker non-votes occur when shares held by a broker for a beneficial owner are not voted either because (i) the broker did not receive voting instructions from the beneficial owner, or (ii) the broker lacked discretionary authority to vote the shares. Abstentions occur when shares present at the Annual Meeting are marked "abstain." A broker is entitled to vote shares held for a beneficial owner on "routine" matters without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on "non-routine" matters. Accordingly, we encourage you to provide voting instructions to your broker, whether or not you plan to attend the virtual Annual Meeting. All of the proposals presented at the Annual Meeting, other than the ratification of KPMG LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2018 ("Fiscal 2018"), are non-routine matters. Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present.

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PROXY SUMMARY

Required Votes

Directors will be elected by a plurality of the votes cast. This means that the nominees with the most votes will be elected. Votes may be cast for or withheld from a nominee, but a withheld vote or a broker non-vote will not affect the outcome of the election of directors at the Annual Meeting.

The affirmative vote of the holders of a majority of the shares of Common Stock represented in person or by proxy at the Annual Meeting and entitled to vote on the proposal is required for approval of the ratification of our selection of KPMG LLP as our independent registered public accounting firm for Fiscal 2018. Because they represent votes present and entitled to vote that are not cast in favor of a proposal, abstentions have the same effect as votes "against" this proposal. Because the ratification of our independent registered public accounting firm is considered a "routine" matter, brokers will be entitled to vote on the proposal at their discretion. Therefore, broker non-votes will have the same effect as a vote against the proposal.

The affirmative vote of the holders of a majority of the shares of common stock represented in person or by proxy at the Annual Meeting and entitled to vote is required for approval of the advisory vote on executive compensation. Because they represent votes present and entitled to vote that are not cast in favor of a proposal, abstentions have the same effect as votes "against" the say-on pay proposal. Broker non-votes, however, will not be considered as entitled to vote on this proposal, and therefore, will have no effect on the outcome of this proposal.

The affirmative vote of the holders of a majority of the shares of common stock represented in person or by proxy at the Annual Meeting and entitled to vote is required for approval of performance criteria under the 2014 Stock Incentive Plan. Because they represent votes present and entitled to vote that are not cast in favor of a proposal, abstentions have the same effect as votes "against" the proposal. Broker non-votes, however, will not be considered as entitled to vote on this proposal, and therefore, will have no effect on the outcome of this proposal.

Revocation and Voting of Proxies

Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time prior to the voting thereof by (i) delivering to the Corporate Secretary of the Company a revocation of proxy, (ii) executing a new proxy bearing a later date, or (iii) attending and voting at the virtual Annual Meeting. Attendance at the virtual Annual Meeting will not, by itself, revoke a proxy. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to revoke a proxy, you must contact that firm to revoke any prior voting instructions.

All valid, unrevoked proxies will be voted as directed. If a proxy card is properly executed and returned and no voting specification is indicated, the shares will be voted:

    FOR the election of the three nominees named in this proxy statement for director of the Company;

    FOR ratification of the selection of KPMG LLP as the Company's independent registered public accounting firm for Fiscal 2018;

    FOR the non-binding advisory resolution to approve the compensation paid to our named executive officers for our fiscal year ended June 30, 2017 ("Fiscal 2017"); and

    FOR the approval of the performance criteria under the 2014 Stock Incentive Plan and the amendments related thereto.

With respect to such other matters as may properly come before the Annual Meeting, votes will be cast in the discretion of the appointed proxies.

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PROXY SUMMARY

Proxy Solicitation

We are making this proxy solicitation both through the mail and Internet, although proxies may be solicited by personal interview, telephone, facsimile, letter, e-mail or otherwise. Certain of our directors, officers and other employees, without additional compensation, may participate in the solicitation of proxies. We will pay the cost of this solicitation, including the reasonable charges and expenses of brokerage firms and others who forward solicitation materials to beneficial owners of the Common Stock.

Attending the Virtual Annual Meeting

Stockholders as of the Record Date are invited to attend the virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/zayo2017. To participate in the Annual Meeting, you will need the 16-digit control number included on your notice of Internet availability of the proxy materials. The Annual Meeting will begin promptly at 7:30 a.m. (Mountain Time). Online check-in will begin at 7:25 a.m., (Mountain Time), and you should allow sufficient time for the online check-in procedures.

Voting Results

Voting results will be tabulated and certified by the inspector of elections appointed for the Annual Meeting. The preliminary voting results will be announced at the Annual Meeting. The final results will be tallied by the inspector of elections and filed with the Securities and Exchange Commission (the "SEC") in a current report on Form 8-K within four business days of the Annual Meeting.

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Proposal 1. Election of Directors

It is proposed to elect the three directors nominated in this proxy statement to serve until the annual meeting of stockholders in 2020, and until successors shall have been duly elected and qualified. Proxies cannot be voted for more than three persons. Unless otherwise specified in the accompanying proxy, the shares voted by proxy will be voted FOR the election of the persons listed for a term expiring in 2020.

Each of the nominees listed below has agreed to serve as a director of the company if elected. The Company knows of no reason why the nominees would not be available for election or, if elected, would not be able to serve. If any of the nominees are unable to serve or for good cause will not serve as a nominee at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee designated by the Board to fill the vacancy.

Nominees for Director with Term Expiring at the Annual Meeting of Stockholders in 2020

Phil Canfield  

 

PHOTO

Director Since:    July 2012

Age:(1)    49

Independent Director

Lead Director

Nominating & Governance Committee Chairman

Mr. Canfield was appointed Director as a result of his extensive experience in corporate finance and in the telecommunications industry.

Experience

Mr. Canfield is a Managing Director of private equity firm GTCR LLC and co-heads GTCR's Technology, Media and Telecommunications investment team. Mr. Canfield joined GTCR in 1992 and became a Principal in 1997. From 1990 to 1992, Mr. Canfield worked in the Corporate Finance Department at Kidder, Peabody and Company. Since June 2017, Mr. Canfield has served on the board of directors of Cision Ltd., a global public relations and earned media software company and services provider listed on the New York Stock Exchange, and he currently serves on several private company boards. He holds an M.B.A. from the University of Chicago and a B.B.A. in finance with High Honors from the Honors Business Program at the University of Texas.


 

Steve Kaplan


 

 

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Director Since: April 2017

Age:(1)    57

Independent Director

Audit Committee Member

Compensation Committee Member

Mr. Kaplan was appointed Director as a result of his extensive experience in entrepreneurship, corporate finance and compensation.

Experience

Since 2011, Mr. Kaplan has served as Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance at University of Chicago Booth School of Business ("Booth"). From 1999 to 2011, Mr. Kaplan served as Neubauer Family Professor of Entrepreneurship and Finance at Booth. From, and from 1997 to 1999, Mr. Kaplan served as Leon Carroll Marshall Professor of Finance at Booth. In 2013, Mr. Kaplan also began teaching at the University of Chicago Law School, recognized in 2014 as the Thomas Cole Distinguished Visiting Professor Chair. During his tenure at University of Chicago, he has served as the Faculty Director of Chicago Booth's Polsky Center for Entrepreneurship and Innovation and as Research Associate at the National Bureau of Economic Research. In 1997, Mr. Kaplan helped to start Booth's business plan competition, the New Venture Challenge, which has spawned over 180 companies. Mr. Kaplan currently serves on the board of directors and is chairman of the compensation committee of Morningstar, Inc., a provider of independent investment research in North America, Europe, Australia, and Asia listed on NASDAQ, since 1999. He also served on the board of trustees of the Columbia Acorn Funds until December 2016 and served on the board of directors of Accretive Health, Inc. (now R1 RCM Inc.) from 2004 to2015. Mr. Kaplan earned his PhD in Business Economics from Harvard University and an AB in Applied Mathematics and Economics from Harvard College.


 
(1)
Age as of September 8, 2017.

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PROPOSAL 1. ELECTION OF DIRECTORS


Linda Rottenberg


 

 

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Director Since: May 2014

Age:(1)    48

Independent Director

Nominating & Governance Committee Member

Strategy Committee Member

Ms. Rottenberg was appointed Director as a result of her extensive experience in entrepreneurship, innovation, business development and leadership.

Experience

Ms. Rottenberg is co-founder and chief executive officer of Endeavor Global, Inc., a global entrepreneurship movement founded in 1997. Ms. Rottenberg also leads Endeavor Catalyst LP Funds I and II, funds that invest in Endeavor Entrepreneurs. Ms. Rottenberg also serves on the board of directors of Globant SA, a digitally native technology services company listed on the NYSE, and privately-held online ordering platform Olo. Ms. Rottenberg earned a law degree at Yale Law School and a bachelor's degree from Harvard University.


 

The following persons shall continue to serve as directors for the terms indicated:

Directors with Terms Expiring at the Annual Meeting of Stockholders in 2018

Dan Caruso  

 

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Director Since: 2007

Age:(1)    54

Chief Executive Officer

Chairman of the Board

Mr. Caruso brings to the Board extensive leadership experience and, as our cofounder, significant knowledge of the Company's business, strategy and industry.

Experience

Mr. Caruso is one of Zayo's cofounders and has served as Chief Executive Officer and Chairman of the Board since Zayo's inception in 2007. Between 2004 and 2006, Mr. Caruso was President and CEO of ICG Communications, Inc. ("ICG"). In 2004, he led a buyout of ICG and took it private. In 2006, ICG was sold to Level 3 Communications, Inc. ("Level 3"). Prior to ICG, Mr. Caruso was one of the founding executives of Level 3, and served as their Group Vice President from 1997 through 2003 where he was responsible for Level 3's engineering, construction, and operations organization and most of its lines of business and marketing functions at different times. Prior to Level 3, Mr. Caruso was a member of the MFS Communications Company, Inc. ("MFS Communications") senior management team. He began his career at Illinois Bell Telephone Company, a former subsidiary of Ameritech Corporation. He holds an MBA from the University of Chicago and a B.S. in Mechanical Engineering from the University of Illinois.


 
(1)
Age as of September 8, 2017.

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PROPOSAL 1. ELECTION OF DIRECTORS

Don Gips  

 

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Director Since: July 2013

Age:(1)    57

Independent Director

Compensation Committee Chairman

Strategy Committee Chairman

Mr. Gips was appointed Director as a result of his extensive experience in the telecommunications industry.

Experience

Mr. Gips serves as a Partner at the Albright Stonebridge Group, as a Senior Advisor to the Blackstone Group, and as Venture Partner to Columbia Capital. He is a member of the boards of directors of Liquid Telecom, a privately-held company that provides data, voice and IP services in Africa, Omnispace, LLC, a privately-held global satellite provider, Black Rhino, a privately-held power development company based in Africa, and NextNav, a privately-held geolocation provider. He is also the Chairman of the U.S.-South Africa Business Council, working on behalf of the U.S. Chamber of Commerce. From 2008 to 2016, Mr. Gips held several positions in the Obama Administration. He served as assistant to President Obama during the Presidential transition, ran the office of Presidential Personnel, and served as the United States Ambassador to South Africa from July 2009 until January 2013. From 1998 to 2008, Mr. Gips worked in the Clinton Administration as Chief Domestic Policy Advisor to Vice President Al Gore and as Chief of the International Bureau of the Federal Communications Commission. From 1998 to 2008, Mr. Gips was also Group Vice President of Global Corporate Development for Level 3. Before 1998, Mr. Gips was a management consultant to Fortune 500 companies at McKinsey & Company. Mr. Gips received an MBA from the Yale School of Management where he was recently honored as a Donaldson Fellow and received his undergraduate degree from Harvard University.


 

 


Nina Richardson


 

 

PHOTO

Director Since: November 2015

Age:(1)    58

Independent Director

Nominating & Governance Committee Member

Ms. Richardson was appointed Director as a result of her extensive leadership and operational experience in scaling businesses and in the technology area.

Experience

Ms. Richardson is a Managing Director of Three Rivers Energy, an energy services company she co-founded in 2004. From February 2013 through February 2015, she also served as the Chief Operating Officer at GoPro, a manufacturer of action cameras listed on NASDAQ. Previously, Ms. Richardson was an independent operations and management consultant for a diverse group of companies including Tesla Motors, Solaria and TouchTunes Interactive Networks. She also held a variety of executive positions at Flextronics, a global electronics manufacturing services provider, including vice president and general manager. Ms. Richardson serves on the board of directors of Silicon Labs, a semiconductor company listed on NASDAQ, CallidusCloud, a global enterprise software and SaaS company listed on NASDAQ, Exploramed NC7 (dba Willow), a private company, and We Care Solar, a nonprofit organization providing solar-powered systems for maternity care. Ms. Richardson served on the board of directors of SGI, a global leader in high-performance solutions for computing, data analytics and data management listed on NASDAQ, during 2016 prior to its acquisition by Hewlett Packard. She holds a B.S. in Industrial Engineering from Purdue University and an Executive MBA from Pepperdine University.


 
(1)
Age as of September 8, 2017.

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PROPOSAL 1. ELECTION OF DIRECTORS

Directors with Terms Expiring at the Annual Meeting of Stockholders in 2019

Rick Connor  

 

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Director Since: June 2010

Age:(1)    68

Independent Director

Audit Committee Chairman

Mr. Connor was appointed Director as a result of his extensive technical accounting and auditing background, knowledge of SEC filing requirements and experience with telecommunications clients.

Experience

Mr. Connor is retired. Prior to his retirement in 2009, he was an audit partner with KPMG LLP where he served clients in the telecommunications, media and energy industries for 38 years. From 1996 to 2008, he served as the Managing Partner of KPMG's Denver office. Mr. Connor is a member of the board of directors and Chairman of the audit committee of Antero Resources Corporation, an independent oil and natural gas corporation and Antero Resources Midstream Management LLC, the general partner of Antero Midstream Partners LP, a master limited partnership formed by Antero Resources Corporation. Mr. Connor is also a member of the board of directors and Chairman of the audit committee of Centerra Gold, Inc., a Toronto based gold mining company listed on the Toronto Stock Exchange. Mr. Connor earned his B.S. degree in accounting from the University of Colorado.


 

 

Cathy Morris  

 

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Director Since: November 2017

Age:(1)    59

Independent Director

Audit Committee Member

Compensation Committee Member

Ms. Morris was appointed Director as a result of her extensive strategic, leadership, operational and financial experience in the technology area.

Experience

Ms. Morris serves as senior vice president and chief strategy officer for Arrow Electronics, Inc. ("Arrow"), a publicly-traded global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Ms. Morris leads strategic initiatives for Arrow, including global merger and acquisition activity. Ms. Morris has worked at Arrow for over 20 years in progressively senior roles including president of Arrow's enterprise computing solutions segment, vice president of North American support services operations, vice president of finance and support services for the enterprise computing solutions business, and vice president of corporate development. Ms. Morris came to Arrow through its acquisition of Anthem Electronics, where she was vice president of finance and corporate controller. Prior to joining Arrow, Ms. Morris held various financial leadership roles in the banking and manufacturing industries. From 2014 to 2015 she served as a member of the board of directors and chair of the audit committee for GrafTech International Holdings Inc., a manufacturing company listed on the New York Stock Exchange. She received her bachelor's degree in finance from Colorado State University and completed Harvard Business School's General Management Program.


 
(1)
Age as of September 8, 2017.

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PROPOSAL 1. ELECTION OF DIRECTORS

Emily White  

 

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Director Since: April 2017

Age:(1)    39

Independent Director

Strategy Committee Member

Ms. White was appointed Director as a result of her extensive experience in entrepreneurship and her operational and leadership experience in the technology area.

Experience

From 2014 to 2015, Ms. White was the Chief Operating Officer at Snapchat, Inc., a photo messaging company listed on the NYSE. Prior to joining Snapchat, Ms. White held several key roles at Facebook, a social media corporation listed on NASDAQ , from 2010 to 2013, including Director of Local Business Operations, Director of Mobile Business Operations, and leader of business operations for Instagram. From 2001 to 2010, Ms. White worked at Google. Ms. White has served on the board of directors of Lululemon, a yoga outfitter listed on NASDAQ, since 2011 and on the board of the National Center for Women in I.T. since 2008. She is also a Board Adviser to Hyperloop One and VSCO, Inc. Ms. White received her B.A. in Art History from Vanderbilt University.


 
(1)
Age as of September 8, 2017.

Recommendation of the Board













FOR     The Board recommends a vote FOR the nominees for director named above.  
 

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Proposal 2. Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee of the Board has appointed KPMG LLP as our independent registered public accounting firm for Fiscal 2018. Services provided to the Company by KPMG LLP in Fiscal 2017 and the fiscal year ended June 30, 2016 ("Fiscal 2016") are described below.

The Company is asking its stockholders to ratify the selection of KPMG LLP as its independent registered public accounting firm. Although ratification is not required by the Company's bylaws or otherwise, the Board is submitting the selection of KPMG LLP to its stockholders for ratification as a matter of good corporate practice.

A representative of KPMG LLP will be present at the virtual Annual Meeting and will have an opportunity to make a statement and/or to respond to appropriate questions from our stockholders.

Audit Fees

In connection with the audit of the Fiscal 2017 consolidated financial statements, the Company entered into an engagement agreement with KPMG LLP, which set forth the terms by which KPMG LLP agreed to perform audit services for the Company.

Set forth below is information relating to the aggregate fees paid to KPMG LLP for professional services rendered for Fiscal 2017 and Fiscal 2016, respectively.

Fiscal 2017
Fiscal 2016

(in millions)

(1) Audit fees



$

4.4


$

2.7

(2) Audit-related fees

$ $ 0.2

(3) Tax fees

$ 0.3 $ 0.4

(4) All other fees

For the purposes of the preceding table, the professional fees are classified as follows:

    Audit fees — These are the aggregate fees billed for the fiscal years shown for professional services performed by KPMG LLP for the audit of the Company's consolidated financial statements for that year, comfort letters, consents and reviews of interim/quarterly financial information.

    Audit-related fees — These are fees billed for assurance and related services and foreign statutory audits that are traditionally performed by our independent certified public accounting firm.

    Tax fees — These are fees billed for all professional services by professional staff of our independent registered public accounting firm's tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning and tax advice. Tax compliance involves preparation of original and amended tax returns, refund claims and tax payment services. Tax planning and tax advice encompass a diverse range of subjects, including assistance with tax audits and appeals; tax advice related to mergers, acquisitions and dispositions; and requests for rulings or technical advice from taxing authorities.

It is the policy of the Audit Committee, as set forth in the Audit Committee's Charter, to pre-approve, consistent with the requirements of the federal securities laws, all auditing services and permissible non-audit services provided to the Company by its independent registered public accounting firm. The Audit Committee has

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PROPOSAL 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

established policies and procedures for the pre-approval of audit, audit related, tax and permissible other services to be provided to the Company by its independent registered public accounting firm. The Audit Committee has delegated to the chair of the Audit Committee the authority to pre-approve audit-related and non-audit services not prohibited by law to be performed by our independent registered public accounting firm and associated fees up to a maximum of $100,000 per engagement, per additional category of services or in excess of pre-approved budgeted levels for the specified service, provided that the chair shall report any decisions to pre-approve services and fees to the full Audit Committee at its next regular meeting. The Company provides quarterly reporting to the Audit Committee regarding services performed by and fees paid to its independent registered public accounting firm. Audit fees for Fiscal 2017 and Fiscal 2016 included $0.3 million and $0.1 million, respectively, for services related to SEC filings, including comfort letters and consents. All fees listed in the table above were pre-approved by the Audit Committee.

Recommendation of the Board











FOR  
  The Board recommends that stockholders vote FOR ratification of the appointment of KPMG LLP as the Company's independent registered public accounting firm for fiscal 2018.  
 

In the event that the Company's stockholders do not ratify the appointment, the appointment will be reconsidered by the Audit Committee and the Board. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the fiscal year if it determines that such a change would be in the best interests of the Company and its stockholders.

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Proposal 3. Advisory Vote Approving Executive Compensation

In accordance with The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing our stockholders with the opportunity to make a non-binding, advisory resolution to approve the compensation of our named executive officers as disclosed in this proxy statement in accordance with rules promulgated by the SEC.

The Company asks that you indicate your support for our executive compensation policies and practices as described in "Compensation Discussion and Analysis," and the accompanying tables and related disclosures in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers, and the policies and practices described in this proxy statement. Your vote is advisory and so will not be binding on the Compensation Committee or the Board. However, the Board will review the voting results and take them into consideration when structuring future executive compensation arrangements. The affirmative vote of the holders of a majority of the shares of Common Stock represented in person or by proxy at the annual meeting and entitled to vote on the proposal will be required for approval.

We believe that our compensation philosophy and program design are essential elements of our culture and have led to our success in delivering returns for our shareholders. Our unique program provides us with a competitive advantage in successfully attracting talent in an industry that includes publicly traded communication infrastructure companies as well as organizations backed by private investment capital. Accordingly, the following distinctive elements of our executive compensation program support our company strategy:

    Our fundamental premise of delivering industry-leading returns for shareholders and appropriately sharing incremental value created with our executives and employees.

    Our extensive reliance on equity-based pay to align executive pay with shareholder value creation.

    Our strict use of financial and market return performance criteria as determinants of both cash bonuses and earned stock grants.

Further, we do not believe that our executive compensation program encourages our management to take excessive risks.

The Board encourages you to carefully review the information regarding our executive compensation program contained in this Proxy Statement, including the Compensation Discussion and Analysis beginning on page 33, which provides detailed information on the compensation of our named executive officers.

Recommendation of the Board











FOR  
  The Board Recommends that stockholders vote FOR the below resolution.  
 

"RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Company's named executive officers, as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative discussion."

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Proposal 4. Approval of Performance Criteria Under The 2014 Stock Incentive Plan

Overview

The Company's 2014 Stock Incentive Plan (the "Plan") was adopted by the Board and our stockholders on October 9, 2014, and became effective on October 17, 2014 in connection with our initial public offering, and was amended by the Board effective August 23, 2016. The Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), incentive bonuses, which may be paid in cash or stock or a combination thereof, and other stock-based awards to non-employee directors of the Company and officers and eligible employees of the Company and any subsidiaries.

The purpose of the Plan is to promote and closely align the interests of employees and non-employee directors of the Company and its stockholders by providing stock-based compensation and other performance-based compensation. The objectives of the Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Plan participants and to optimize the profitability and growth of the Company through incentives that are consistent with the Company's goals and that link the personal interests of participants to those of the Company's stockholders.

Proposal

In order to allow for awards under the Plan to qualify as tax-deductible performance-based compensation under Section 162(m) ("Section 162(m)") of the Internal Revenue Code (the "Code"), we are asking our stockholders to approve the material terms, share limits, performance award dollar limit, and performance criteria of the Plan pursuant to Section 162(m).

The Plan has been amended solely for purposes of allowing for flexibility under Section 162(m), subject to approval of this Proposal 4 by stockholders. The amendments are highlighted below. Approval of this Proposal 4 is also an approval of the amendments made to the Plan.

Section 162(m) of the Code

As amended, the Plan is designed to permit the grant of awards that are intended to qualify as "performance-based compensation" not subject to Section 162(m)'s $1,000,000 deductibility cap, however, there can be no guarantee that amounts payable under the Plan will be treated as qualified "performance-based compensation" under Section 162(m). In general, under Section 162(m), in order for the Company to be able to deduct compensation in excess of $1,000,000 paid in any one year to the Company's chief executive officer and certain other executive officers, such compensation must qualify as "performance-based." One of the requirements of "performance-based" compensation for purposes of Section 162(m) is that the material terms of the performance criteria under which compensation may be paid be disclosed to and approved by the Company's stockholders at least once every five years (subject to a three-year exception upon a company becoming publicly traded). For purposes of Section 162(m), the material terms include (i) the employees eligible to receive compensation, (ii) a description of the business criteria on which the performance criteria is based and (iii) the maximum amount of compensation that can be paid to an employee under the performance criteria. With respect to the various types of awards under the Plan, each of these aspects is discussed below, and, as noted above, stockholders are being asked under this proposal to approve each of these aspects of the Plan for purposes of the approval requirements of Section 162(m).

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PROPOSAL 4. APPROVAL OF PERFORMANCE CRITERIA UNDER THE 2014 STOCK INCENTIVE PLAN

Section 162(m) Amendments

The following amendments were made to the Plan to provide the Company flexibility under Section 162(m), with further detail provided in the Plan Summary below:

    Addition of tax code limitations for purposes of Section 162(m).

    Addition of "Qualifying Performance Criteria" for purposes of Section 162(m).

Burn Rate and Share Reserve Details

We are not asking our stockholders to approve an increase in the share reserve of the Plan. However, the following factors are provided for stockholder consideration:

    The number of participants in the Plan is approximately 3,100, of which only 11 are directors and executive officers.

    Current Reserve: As of June 30, 2017, there were 11,748,758 shares authorized, but unissued under the Plan.

    Share Usage: Share usage rate is a metric monitored to ensure that the shares awarded under the Company's equity compensation plans are not excessively dilutive to the Company's stockholders. It is defined as the number of shares granted under the equity compensation plans divided by the basic weighted average common shares outstanding for each of the last three fiscal years. Over the past three fiscal years, the Company's annual share usage rate has averaged 1.2%.

    Burn Rate: Burn rate is equal to the total number of equity awards the Company granted in a fiscal year (with performance awards shown at target level) divided by the weighted average common stock outstanding during the year. Over the past three fiscal years 2017, 2016, and 2015, the Company's burn rate has been 1.4%, 1.4% and 0.9%, respectively.

    Outstanding Awards: As of June 30, 2017, the aggregate maximum number of unvested full value awards (i.e., RSUs) outstanding under all equity compensation plans was 5,179,497. The closing price of a share of our common stock on the New York Stock Exchange on June 30, 2017 was $30.90.

Plan Summary

The following summary of the material terms of the Plan is qualified in its entirety by reference to the full text of the Plan, which is set forth in Exhibit A to this proxy statement.

Administration

Our Compensation Committee or any successor committee (the "Committee") has the authority to administer the Plan. Any power of the Committee may also be exercised by our full Board, except to the extent otherwise prohibited by the terms of the Plan. To the extent that any action taken by the Committee conflicts with an action taken by the full Board, the action of the Board will control. To the maximum extent permissible under applicable law, the Committee may by resolution delegate any or all of its authority to one or more subcommittees composed of one or more directors and/or officers, subject to the terms of the Plan, and any such subcommittee will be treated as the Committee for all purposes under the Plan. Subject to the express provisions of the Plan, the Committee is authorized and empowered to do all things it determines necessary or appropriate in connection with the administration of the Plan, including, without limitation, the power to: (i) prescribe, amend and rescind rules and regulations relating to the Plan and to define terms not otherwise defined therein; (ii) determine which persons are eligible to receive awards under the Plan, to which of such persons, if any, awards will be granted and the timing of any such awards; (iii) prescribe and amend the terms of award agreements, to grant awards and determine the terms and conditions thereof; (iv) establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, retention, vesting, exercisability or settlement of any award; (v) prescribe and amend the terms of or form of

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any document or notice required to be delivered to the Company by participants under the Plan; (vi) determine the extent to which adjustments are required pursuant to certain changes in our capitalization; (vii) interpret and construe the Plan, any rules and regulations thereunder and the terms and conditions of any award granted thereunder, and to make exceptions to any such provisions if the Committee, in good faith, determines that it is appropriate to do so; (viii) approve corrections in the documentation or administration of any award; and (ix) make all other determinations deemed necessary or advisable for the administration of the Plan.

The Committee may, in its sole and absolute discretion, without amendment to the Plan, but subject to the limitations otherwise set forth therein, waive or amend the operation of Plan provisions respecting exercise after termination of employment with the Company or an affiliate. The Committee or any member thereof may, in its sole and absolute discretion and, except as otherwise provided in the Plan, waive, settle or adjust any of the terms of any award so as to avoid unanticipated consequences or address unanticipated events (including any temporary closure of an applicable stock exchange, disruption of communications or natural catastrophe). All decisions, determinations and interpretations by the Committee regarding the Plan, any rules and regulations thereunder and the terms and conditions of or operation of any award granted thereunder are final and binding on all participants, beneficiaries, heirs, assigns or other persons holding or claiming rights under the Plan or any award granted thereunder. Members of the Board and members of the Committee acting under the Plan are fully protected in relying in good faith upon the advice of counsel and will incur no liability except for gross negligence or willful misconduct in the performance of their duties.

Eligibility

Awards may be granted to employees, including officers, and non-employee directors of the Company and its subsidiaries. Only our employees and those of our subsidiaries are eligible to receive incentive stock options.

Shares Subject to the Plan

We initially reserved 14,000,000 shares of Common Stock to be issued under the Plan. Commencing with the first business day of each fiscal year following the fiscal year in which the Plan first became effective and until the expiration of the Plan, the number of shares of our common stock available for issuance under the Plan will be increased by a number such that the total amount available for issuance will be equal to six percent of the number of shares of our common stock outstanding on the last day of the immediately preceding fiscal year of the Company, calculated on a fully diluted basis, or a lesser number of shares of common stock as determined by our Board. As of July 1, 2017, an aggregate of 14,788,291 shares of Common Stock are available for issuance under the Plan (including shares that have been previously issued pursuant to awards granted under the Plan and shares subject to outstanding awards under the Plan). The shares of common stock issued under the Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market.

The aggregate number of shares of our common stock issued under the Plan at any time will equal only the number of shares of our common stock actually issued upon exercise or settlement of an award, and shares of our common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash will not count as shares of common stock issued under the Plan.

The aggregate number of shares available for issuance under the Plan will not be reduced by (i) shares subject to awards that have been terminated, expired unexercised, forfeited or settled in cash, (ii) shares subject to awards that have been retained or withheld by the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an award, or (iii) shares subject to awards that otherwise do not result in the issuance of shares in connection with payment or settlement thereof. In addition, shares that have been delivered (either actually or by attestation) to the Company in payment or satisfaction of the exercise price, purchase price or tax withholding obligation of an award will be available for issuance under the Plan.

The Company may grant substitute awards under the Plan, which are awards granted or common stock issued by the Company in assumption of, or in substation or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any subsidiary or with which the

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PROPOSAL 4. APPROVAL OF PERFORMANCE CRITERIA UNDER THE 2014 STOCK INCENTIVE PLAN

Company or any subsidiary combines. Substitute awards will not reduce the shares of common stock authorized for issuance under the Plan or authorized for grant to a participant in any calendar year. Additionally, in the event that a company acquired by the Company or any subsidiary, or with which the Company or any subsidiary combines, has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan, as adjusted in connection with the transaction, if necessary, may be used for awards under the Plan and will not reduce the shares of our common stock authorized for issuance under the Plan.

The aggregate number of shares subject to awards granted during any calendar year to any one participant may not exceed 3,000,000 (but which number does not include any tandem stock appreciation rights), and the maximum cash amount payable pursuant to an incentive stock bonus to any one participant during any calendar year may not exceed $24 million. Additionally, the aggregate number of shares that may be issued pursuant to the exercise of incentive stock options under the Plan may not exceed 3,000,000.

Stock Options

A stock option may be granted as an incentive stock option or a nonqualified stock option. The option exercise price may not be less than the fair market value of the stock subject to the option on the date the option is granted (or, with respect to incentive stock options, less than 110% of the fair market value if the recipient owns stock possessing more than 10% of the total combined voting power of all classes of stock of the company or any affiliate, or a Ten Percent Stockholder), unless the option was granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 409A of the Code ("Section 409A") and, if applicable, Section 424(a) of the Code. Options will not be exercisable after the expiration of ten years from the date of grant (or five years, in the case of an incentive stock option issued to a Ten Percent Stockholder); provided, however, that the term (other than an incentive stock option) will be automatically extended if, at the time of its schedule expiration, the participant is prohibited by law or the Company's insider trading policy from exercising the option, which extension will expire on the 30th day following the date such prohibition no longer applies. Each award agreement will set forth the number of shares subject to each option. The purchase price of any shares acquired pursuant to an option may be payable in cash or such other method as determined by the Committee, including an irrevocable commitment by a broker to pay over such amount from a sale of the shares of common stock issuable under an option, the delivery or previously owned shares of our common stock or withholding of shares of our common stock deliverable upon exercise. Options will not be granted in consideration for and will not be conditioned upon the delivery of shares of our common stock to the Company in payment of the exercise price and/or tax withholding obligation under any other employee stock option.

Stock Appreciation Rights

A stock appreciation right, or SAR, is a right that entitles the participant to receive, in cash or shares of stock or a combination thereof, as determined by the Committee, value equal to or otherwise based on the excess of (i) the fair market value of a specified number of shares at the time of exercise over (ii) the exercise price of the right, as established by the Committee on the date of grant. Upon exercising a SAR, the participant is entitled to receive the amount by which the fair market value of the stock at the time of exercise exceeds the exercise price of the SAR. The exercise price of each SAR may not be less than the fair market value of the stock subject to the award on the date the SAR is granted, unless the SAR was granted pursuant to an assumption of or substitution for another option in a manner satisfying the provisions of Section 409A. SARs will not be exercisable after the expiration of ten years from the date of grant. Each award agreement will set forth the number of shares subject to the SAR and the applicable vesting schedule.

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Provisions Applicable to Both Options and SARs

No Repricing without Stockholder Approval.    Other than in connection with a change in the Company's capitalization, the Committee will not, without stockholder approval, reduce the exercise price of a previously award option or SAR and, at any time when the exercise price of a previously awarded option or SAR is above the fair market value of a share of our common stock, the Committee will not, without stockholder approval, cancel and re-grant or exchange such option or SAR for cash or a new award with a lower (or no) exercise price.

No Stockholder Rights.    Participants will not have any voting rights and will not have any rights to receive dividends or dividend equivalents in respect of an option or SAR or any shares of common stock subject to an option or SAR until the participant becomes the holder of record of such shares.

Restricted Stock and Restricted Stock Units

Restricted stock awards are awards of shares, the grant, issuance, retention, vesting and/or transferability of which is subject during specified periods of time to such conditions (including continued employment and/or the satisfaction of performance criteria) and terms as the Committee deems appropriate. RSUs are an award denominated in units under which the issuance of shares (or cash payment in lieu thereof) is subject to such conditions (including continued employment and/or the satisfaction of performance criteria) and terms as the Committee deems appropriate. Each award document evidencing a grant of restricted stock or RSUs will set forth the terms and conditions of each award, including vesting and forfeiture provisions, transferability and, if applicable, right to receive dividends or dividend equivalents. In no event will dividends or dividend equivalents be paid during a performance period with respect to unearned awards of restricted stock or RSUs that are subject to performance-based vesting criteria. Dividends or dividend equivalents that become accrued on such shares will become payable no earlier than the date the performance-based vesting criteria have been achieved and the underlying shares or RSUs have been earned.

Incentive Bonuses

An incentive bonus is a bonus opportunity pursuant to which a participant may become entitled to receive an amount based on satisfaction of performance criteria established for a specified performance period as specified in an award agreement. The Committee will establish the performance criteria and level of achievement versus such criteria that will determine the amount payable under an incentive bonus, which may include a target, threshold and/or maximum amount payable and any formula for determining such achievement, and which criteria may be based on performance conditions. The Committee will determine the timing of payment of any incentive bonus, which may be payable in cash or common stock, as determined by the Committee. Notwithstanding satisfaction of any performance goals, the amount paid under an incentive bonus on account of either financial performance or personal performance evaluations may be adjusted by the Committee on the basis of such further considerations as the Committee may determine.

Qualifying Performance Criteria

The Committee may establish performance criteria and levels of achievement versus such criteria that will determine the number of shares, units or cash to be granted, retained, vested, issued or issuable under or in settlement of an award or the amount payable pursuant to an award, which criteria may be based on "qualifying performance criteria" (as described below) or other standards of financial performance and/or personal performance evaluations. In addition, the Committee may specify that an award or a portion of an award is intended to satisfy the requirements for "performance-based compensation" under Section 162(m), provided that the performance criteria for such award or portion of such award is a measure based on one or more qualifying performance criteria selected by the Committee and specified at the time the award is granted. The Committee will certify the extent to which any qualifying performance criteria has been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting of any award that is intended to satisfy the requirements for "performance-based compensation" under Section 162(m). Notwithstanding satisfaction of any performance criteria, the number of shares issued under or the amount paid under an award

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may be reduced, but not increased, by the Committee on the basis of such further considerations as the Committee in its sole discretion may determine.

For purposes of the Plan, the term "qualifying performance criteria" means any one or more of the following performance criteria, or derivations of such performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business division, unit, subsidiary or individual, either individually, alternatively or in any combination, and measured annually, cumulatively over a period of years or by project or on a geographical basis, on an absolute basis or relative basis, to previous results, to a designated comparison group or company or to an index, in specific levels of or increases in one or more of the following (alone or in combination with any other criterion, whether gross or net, before or after taxes and/or before or after adjustments), in each case as specified by the Committee: (i) cash flow (before or after dividends) or free cash flow (or free cash flow per share); (ii) earnings, earnings measures/ratios or earnings per share (basic or diluted), including but not limited to earnings before interest, taxes, depreciation and amortization; (iii) stock price, return on equity or total stockholder return; (iv) return on capital or investment (including return on total capital, return on invested capital, return on investment, financial return ratios or internal rates of return); (v) return on assets (gross or net); (vi) market capitalization; (vii) economic value added; (viii) debt leverage (debt to capital); (ix) revenue, revenue growth, rate of revenue growth or returns on sales or revenues; (x) pre tax income or net income; (xi) operating profit, net operating profit, operating income, operating margin, profit margin, gross margin, operating expenses, operating ratio, operating revenue or return on operating revenue; (xii) cash from operations, cash flow (including but not limited to operating cash flow and free cash flow), cash flow return on investment (discounted or otherwise) or cash flow in excess of cost of capital; (xiii) health and safety; (xiv) implementation or completion of critical projects or processes; (xv) cost or expense targets, reductions and savings, productivity and efficiencies; (xvi) sales or sales growth; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specific market penetration, market share, geographic business expansion, customer service, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology, and goals relating to acquisitions, divestitures, joint ventures and similar transactions and budget comparisons; and (xxvii) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, the formation of joint ventures and the completion of other corporate transactions.

To the extent consistent with Section 162(m), the Committee may appropriately adjust any evaluation of performance under a "qualifying performance criteria" (i) to eliminate the effects of charges for restructurings, discontinued operations, and all items of gain, loss or expense that are infrequently occurring or related to the acquisition or disposal of a segment of a business or related to a change in accounting principle all as determined in accordance with applicable accounting provisions, as well as the cumulative effect of accounting changes, in each case as determined in accordance with GAAP or identified in the Company's financial statements or notes to the financial statements, (ii) to exclude any of the following events that occurs during a performance period: (a) asset write-downs, (b) litigation, claims, judgments or settlements, (c) the effect of changes in tax law or other such laws or provisions affecting reported results, (d) accruals for reorganization and restructuring programs and (e) accruals of any amounts for payment under this Plan or any other compensation arrangement maintained by the Company, and (iii) for such other events as the Committee shall deem appropriate, so long as such adjustment is timely approved in connection with the establishment of such qualifying performance criteria.

Deferral of Payment

The Committee may, in an award agreement or otherwise, provide for the deferred delivery of common stock or cash upon settlement, vesting or other events with respect to RSUs or in payment or satisfaction of an incentive bonus. No award will provide for the deferral of compensation that is not intended to comply with Section 409A; provided, however, that the Company, the Board and the Committee will have no liability to a participant or any other party if an award that is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant or for any action taken by the Board or the Committee.

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Conditions and Restrictions upon Securities Subject to Awards

The Committee may provide that common stock subject to or issued under an award will be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the grant, vesting, exercise or settlement of such award, including without limitation, conditions on vesting or transferability, forfeiture or repurchase provisions and method of payment for the common stock issued upon exercise, vesting or settlement of such award (including the actual or constructive surrender of common stock already owned by the participant) or payment of taxes arising in connection with an award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the participant or other subsequent transfers by the participant of any shares of common stock issued under an award, including without limitation (i) restrictions under an insider trading policy or pursuant to applicable law, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by the participant and holders of other Company equity compensation arrangements, (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers, (iv) provisions requiring common stock be sold on the open market or to the Company in order to satisfy tax withholding or other obligations and (v) mandatory holding periods.

Adjustments Provisions

The number and kind of shares of common stock available for issuance under the Plan (including under any awards then outstanding), and the number and kind of shares of common stock subject to the limits set forth in the Plan, shall be equitably adjusted by the Committee to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of shares of common stock outstanding. Such adjustment may be designed to comply with Section 424 of the Code or may be designed to treat the shares of common stock available under the Plan and subject to awards as if they were all outstanding on the record date for such event or transaction or to increase the number of such shares of common stock to reflect a deemed reinvestment in shares of common stock of the amount distributed to the Company's securityholders. The terms of any outstanding award will also be equitably adjusted by the Committee as to price, number or kind of shares of common stock subject to such award, vesting, and other terms to reflect the foregoing events, which adjustments need not be uniform as between different awards or different types of awards. No fractional shares of common stock will be issued pursuant to such an adjustment.

Change in Control and Other Events

In the event there is any other change in the number or kind of outstanding shares of our common stock, or any stock or other securities into which our common stock will have been changed, or for which it will have been exchanged, by reason of a change in control, other merger, consolidation or otherwise, then the Committee will determine the appropriate and equitable adjustment to be effected, which adjustments need not be uniform between different awards or different types of awards. In addition, in the event of such a change, the Committee may accelerate the time or times at which any award may be exercised, consistent with and as otherwise permitted under Section 409A, and may provide for cancellation or such accelerated awards that are not exercised within a time prescribed by the Committee in its sole discretion.

In the event of a change in control, and except as otherwise set forth in an award agreement or another contract, the Committee will determine which of the following methods will be applied to outstanding awards in its sole discretion: (i) cancelation and cash settlement of all awards; (ii) accelerated vesting of all awards (with performance-based awards vesting based on the greater of performance through the date of determination or target performance); (iii) assumption or continuation of all outstanding awards or substitution or conversation with substantially equivalent economic value (provided that any such award shall vest in full upon a participant's termination of employment without cause within 18 months following a change in control); or (iv) any combination of the aforementioned methods.

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Transferability

Each award may not be sold, transferred for value, pledged, assigned, or otherwise alienated or hypothecated by a participant other than by will or the laws of descent and distribution, and each option or SAR may be exercised only by the participant during his or her lifetime. Notwithstanding the foregoing, outstanding options may be exercised following the participant's death by the participant's beneficiaries or as permitted by the Committee.

Termination and Amendment

The Board may amend, alter or discontinue the Plan and the Committee may amend or alter any agreement or other document evidencing an award made under the Plan but, except in connection with certain changes in our capitalization, no such amendment will, without stockholder approval: (i) increase the maximum number of shares of common stock for which awards may be granted under the Plan; (ii) reduce the price at which options may be granted below the price provided for in the Plan; (iii) reprice outstanding options or SARs; (iv) extend the term of the Plan; (v) change the class of persons eligible to participate in the Plan; (vi) increase the individual maximum limits set forth in the Plan; or (vii) otherwise amend the Plan in any manner requiring stockholder approval by law or the rules of any stock exchange or market or quotation system on which our common stock is traded, listed or quoted. No amendment or alteration to the Plan or any award or award agreement will be made which would impair the rights of the holder of an award without such holder's consent, provided that such consent will not be required if the Committee determines in its sole discretion and prior to the date of any change in control that such amendment or alteration either is required or advisable in order for the Company, the Plan or the award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard, or is not reasonably likely to significantly diminish the benefits provided under such award, or that any such diminishment has been adequately compensated. The Plan shall remain available for the grant of awards until the tenth anniversary of its effective date.

Federal Income Tax Treatment

The following discussion of the federal income tax consequences of the Plan is intended to be a summary of applicable federal law as currently in effect. It should not be taken as tax advice by Plan participants, who are urged to consult their individual tax advisors.

Stock Options

Incentive stock options, or ISOs, and non-qualified stock options, or NQSOs, are treated differently for federal income tax purposes. ISOs are intended to comply with the requirements of Section 422 of the Code. NQSOs do not comply with such requirements.

An optionee is not taxed on the grant or exercise of an ISO. The difference between the exercise price and the fair market value of the shares on the exercise date will, however, be a preference item for purposes of the alternative minimum tax. If an optionee holds the shares acquired upon exercise of an ISO for at least two years following the option grant date and at least one year following exercise, the optionee's gain, if any, upon a subsequent disposition of such shares is long term capital gain. The measure of the gain is the difference between the proceeds received on disposition and the optionee's basis in the shares (which generally equals the exercise price). If an optionee disposes of stock acquired pursuant to exercise of an ISO before satisfying these holding periods, the optionee will recognize both ordinary income and capital gain in the year of disposition. The Company is not entitled to an income tax deduction on the grant or exercise of an ISO or on the optionee's disposition of the shares after satisfying the holding period requirement described above. If the holding periods are not satisfied, the Company will be entitled to a deduction in the year the optionee disposes of the shares in an amount equal to the ordinary income recognized by the optionee.

In order for an option to qualify for ISO tax treatment, the grant of the option must satisfy various other conditions more fully described in the Code. The Company does not guarantee that any option will qualify for

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ISO tax treatment even if the option is intended to qualify for such treatment. In the event an option intended to be an ISO fails to so qualify, it will be taxed as an NQSO, as described in the paragraph below.

An optionee is not taxed on the grant of an NQSO. On exercise, the optionee recognizes ordinary income equal to the difference between the exercise price and the fair market value of the shares acquired on the date of exercise. The Company is entitled to an income tax deduction in the year of exercise in the amount recognized by the optionee as ordinary income. The optionee's gain (or loss) on subsequent disposition of the shares is long term capital gain (or loss) if the shares are held for at least one year following exercise. The Company does not receive a deduction for this gain.

Stock Appreciation Rights

A participant will not recognize taxable income upon the grant of an SAR. Upon exercise of an SAR, a participant will recognize taxable ordinary income in an amount equal to the amount of cash received or the difference between the fair market value of the underlying shares on the date of exercise and the exercise price of the SAR. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.

Restricted Stock and Restricted Stock Units

Grantees of restricted stock or RSUs do not recognize income at the time of the grant. When the award vests or is paid, grantees generally recognize ordinary income in an amount equal to the fair market value of the stock or units at such time, and the Company will receive a corresponding deduction. However, no later than 30 days after a participant receives an award of restricted stock, the participant may elect to recognize taxable ordinary income in an amount equal to the fair market value of the shares at the time of receipt. Provided that the election is made in a timely manner, when the restrictions on the shares lapse, the participant will not recognize any additional income. If the participant forfeits the shares to the Company (e.g., upon the participant's termination prior to vesting), the participant may not claim a deduction with respect to the income recognized as a result of the election. Dividends paid with respect to unvested shares of restricted stock generally will be taxable as ordinary income to the participant at the time the dividends are received.

Company Deduction and Section 162(m)

Section 162(m) generally allows the Company to obtain tax deductions without limit for performance-based compensation. Subject to stockholder approval, the Plan is designed to permit the grant of options and stock appreciation rights, and certain awards of restricted stock, RSUs, incentive bonuses and other stock-based awards that are intended to qualify as "performance-based compensation" not subject to Section 162(m)'s $1,000,000 deductibility cap. The rules and regulations promulgated under Section 162(m) are complicated and subject to change from time to time, sometimes with retroactive effect. In addition, a number of requirements must be met in order for particular compensation to so qualify. As such, there can be no assurance that any compensation awarded or paid under the Plan will be fully deductible under all circumstances.

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New Plan Benefits

The benefits that will be awarded or paid in the future under the Plan are not currently determinable. Such awards are within the discretion of the Committee, and the Committee has not determined future awards or who might receive them, therefore, the table below shows the aggregate number of awards granted under the Plan during Fiscal 2017 to our named executives as of June 30, 2017.

Name and Position


Dollar Value ($) as of June 30, 2017
Number of Units

Dan Caruso, Chief Executive Officer


11,439,891

370,223

Ken desGarennes, (former) Chief Financial Officer

6,187,972 200,258

Andrew Crouch, President & Chief Operating Officer

2,487,635 80,506

Jack Waters, Chief Technology Officer & President of Network Solutions

2,836,280 91,789

All current executive officers

22,951,778 742,776

All current non-executive directors

1,370,848 44,364

All current non-executive employees

72,371,663 2,342,125

As of June 30, 2017, the closing price of a share of the Company's common stock was $30.90.

Equity Compensation Plan Information

For the information required by Item 201(d) of Regulation S-K under the Exchange Act, see "Equity Compensation Plan Information" below.

Recommendation of the Board











FOR  
  The Board recommends that stockholders vote FOR the approval of the performance criteria under the 2014 Stock Incentive Plan and the related amendments thereto.  
 

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Corporate Governance

2017 Highlights

Added 2 new independent directors with diverse backgrounds and deep business, operational and finance experience
Added new, fully independent Strategy Committee of the Board
Remediated material weaknesses in internal controls and received clean audit opinion

Governance Best Practices

Regular evaluations

Thorough annual Board, Committee and individual director evaluations
Commitment to Board refreshment and diversity

Average Board tenure of 3 years

4 of 9 directors are women (44%)

Ongoing attention to refreshment to address succession planning and changing business needs
Robust director nominee selection process

Seek diverse, connected and experienced Board

Methodical analysis of skill set needs in light of evolving business and industry

New directors recruited through both external search firms and current Board member referrals
Strong Board and Committee independence

8 of 9 directors independent

Lead Director elected by the independent directors

Fully independent Audit, Compensation, Nominating & Governance and Strategy Committees

Regular executive sessions of independent directors
Comprehensive strategy and risk oversight by Board and committees

New Strategy Committee responsible for oversight of key strategic objectives

Oversight of enterprise risk management by Nominating & Governance Committee, with specific risk areas delegated to each Committee
Alignment of director and executive officer interests with shareholder interests

Meaningful stock ownership guidelines for directors and executives

Robust anti-hedging, anti-short sale and anti-pledging policies

Annual "say on pay" advisory vote
Active shareholder engagement and outreach

Director participation in process

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CORPORATE GOVERNANCE

Board Composition

Our Board of Directors consists of nine directors. During Fiscal 2017, we increased the size of our Board from seven to nine directors, adding two new independent directors. We increased the size of the Board in order to accommodate formation of a new Strategy Committee and to ensure smooth longer-term Board succession planning.

Election of our directors is governed by our Amended and Restated Certificate of Incorporation ("Certificate of Incorporation") and Amended and Restated Bylaws ("Bylaws"). In accordance with the Stockholders Agreement between the Company and each stockholder listed on the signature pages thereto (the "Stockholders Agreement"), investment funds affiliated with GTCR LLC ("GTCR") have the right to nominate one independent director for consideration by the Nominating and Governance Committee when the current term of their designee, Mr. Canfield, expires. If the Nominating and Governance Committee determines in good faith that a designee is not a suitable candidate then it may reject the designee, and GTCR shall have the right to nominate an alternative individual for consideration, such process to continue until a suitable candidate is designated. GTCR will retain these Board nomination rights until its ownership of Company shares falls below 50% of the amount it owned immediately prior to the Company's initial public offering.

Classified Board

Our Certificate of Incorporation and Bylaws provide for a classified Board consisting of three classes of directors, each serving staggered three-year terms. Our directors are divided among the three classes as follows:

    Class III directors are Mr. Canfield, Mr. Kaplan and Ms. Rottenberg, whose terms will expire at the Annual Meeting.

    Class I directors are Mr. Caruso, Mr. Gips and Ms. Richardson, whose terms will expire at the annual meeting of stockholders to be held in 2018.

    Class II directors are Mr. Connor, Ms. Morris and Ms. White, whose terms will expire at the annual meeting of stockholders to be held in 2019.

Directors for a particular class are elected for three-year terms at the annual meeting of stockholders in the year in which their term expires. As a result, only one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Each director's term continues until the election and qualification of his successor, or his earlier death, resignation or removal.

Director Independence

In August 2017, our Board undertook a review of the independence of our directors and considered whether any director had a material relationship with us that could compromise that person's ability to exercise independent judgment in carrying out his or her responsibilities. Our Board affirmatively determined that each of Mr. Canfield, Mr. Connor, Mr. Gips, Mr. Kaplan, Ms. Morris, Ms. Richardson, Ms. Rottenberg and Ms. White is independent under the rules of the NYSE.

There are no family relationships among any of our directors or executive officers.

Committees of the Board

Our Board has an Audit Committee, a Compensation Committee, a Nominating and Governance Committee and a Strategy Committee. The Strategy Committee is a new committee of the Board that was formed during Fiscal 2017. In the future, our Board may establish other committees, as it deems appropriate, to assist it with its responsibilities. The composition, duties and responsibilities of our committees are as set forth below. Each of these committees has a written charter approved by our Board. Copies of these committee charters as well as

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CORPORATE GOVERNANCE

our corporate governance guidelines are available, without charge, upon request in writing to Zayo Group Holdings, Inc., 1805 29th Street, Suite 2050, Boulder, CO 80301, Attn: Corporate Secretary, or by clicking on "Corporate Governance" in the Investors section of our website, www.zayo.com.

Audit Committee

Our Audit Committee has the following responsibilities, among other things, as set forth in its written charter:

MEMBERS:

    Mr. Connor, Chairman
    Mr. Kaplan
    Ms. Morris

RESPONSIBILITIES:

    reviewing relevant financial reports, disclosures within those reports, accounting policies and practices, and the processes used to produce such reports;

    appointing, reviewing, compensating, retaining and overseeing our independent registered public accounting firm;

    approving in advance any audit and permissible non-audit services to be provided by our independent registered public accounting firm;

    establishing and reviewing policies for our hiring of employees or former employees of the independent registered public accounting firm to ensure compliance with SEC regulations and NYSE requirements;

    reviewing and discussing with the independent registered public accounting firm the matters required to be discussed by the applicable Auditing Standards adopted by the PCAOB and amended from time to time;

    receiving reports from the independent registered public accounting firm and management regarding the adequacy and effectiveness of our internal controls over financial reporting and disclosure controls and procedures;
    overseeing our internal audit function;

    monitoring our accounting policies and practices; financial and accounting controls; and compliance with legal, regulatory and policy requirements;

    preparing the audit committee report required to be included in our annual proxy statement;

    reviewing and approving any related party transactions in accordance with our related party transactions policy, as in effect from time to time; and

    discussing with management our major financial risk exposures and the steps taken to monitor and controls such exposures, and periodically reviewing and discussing with management our guidelines and policies governing the process by which risk assessment and management is undertaken.

Each of Mr. Connor, Mr. Kaplan and Ms. Morris is a non-employee director who meets the applicable requirements for financial literacy. Our Board has determined that Mr. Connor qualifies as an "audit committee financial expert," as such term is defined in Item 407(d)(5) of Regulation S-K. In addition, our Board has determined that each of Mr. Connor, Mr. Kaplan and Ms. Morris meets the definition of an independent director for purposes of serving on an audit committee under Rule 10A-3 and the NYSE rules.

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CORPORATE GOVERNANCE

Compensation Committee

Our Compensation Committee has the following responsibilities, among other things, as set forth in its written charter:

MEMBERS:

    Mr. Gips, Chairman
    Mr. Kaplan
    Ms. Morris

RESPONSIBILITIES:

    reviewing and evaluating our long-term strategy of employee compensation, endeavoring to ensure that our compensation policies are designed to attract and retain key employees, motivate employees to achieve our business objectives and align the interest of management with the long-term interests of our stockholders;

    assessing risks related to our compensation policies and programs;

    considering and assessing the results of our most recent vote by stockholders on executive compensation and overseeing our engagement efforts with shareholders on the subject of executive compensation;

    reviewing and approving goals and objectives relevant to the compensation of our Chief Executive Officer;

    evaluating the performance of our Chief Executive Officer in light of such compensation goals and objectives and determining the compensation of our Chief Executive Officer;

    reviewing and approving the compensation of our other executive officers;
    reviewing and approving any severance, non-competition and non-solicitation arrangements to be made with any of our executive officers;

    reviewing, and either approving or endorsing for the Board's approval, the design of and changes to our compensation and benefit plans;

    preparing the Compensation Committee report required to be included in our annual proxy statement;

    reviewing and making recommendations to the Board with respect to the compensation of our non-employee directors;

    at least annually, assessing whether the work of any compensation consultants involved in determining or recommending executive or director compensation has raised any conflict of interest that is required to be disclosed in our annual report or proxy statement; and

    reviewing and making an annual report to the Board on executive officer succession planning.

Our Board has determined that each of Mr. Gips, Mr. Kaplan and Ms. Morris is a non-employee director as defined in Rule 16b-3 of the Exchange Act, an outside director as defined in Section 162(m) of the Internal Revenue Code and meets the definition of an independent director for purposes of serving on a compensation committee under the NYSE rules.

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CORPORATE GOVERNANCE

Nominating and Governance Committee

Our Nominating and Governance Committee has the following responsibilities, among other things, as set forth in its written charter:

MEMBERS:

    Mr. Canfield, Chairman
    Ms. Richardson
    Ms. Rottenberg

RESPONSIBILITIES:

    evaluating the appropriate size, structure, composition and functioning of the Board and evaluating proposed changes to the criteria for Board membership;

    evaluating the independence of existing and prospective directors;

    identifying and evaluating individuals qualified to become Board members or to be re-nominated as Board members;

    recommending qualified candidates for election to the Board or re-election at each annual stockholder's meeting;

    recommending candidates to be elected by the Board as necessary to fill vacancies and newly created directorships;

    recommending committee members and chairpersons to the Board for appointment;

    evaluating and assessing the performance of the Board, the members of the Board and the Board's committees;

    periodically reviewing the Board's leadership structure and recommending changes to the Board as appropriate, including recommendations to the independent directors regarding the appointment of a lead independent director;
    periodically reviewing and assessing the channels through which the Board receives information;

    developing appropriate Board orientation and training programs for new Board members as well as continuing education requirements for existing Board members;

    developing and annually assessing corporate governance guidelines and a code of ethics for employees and Board members;

    in consultation with the CEO, annually reviewing and recommending to the Board for approval changes to a capital management policy;

    overseeing management's enterprise risk management program;

    reviewing and recommending to the Board for approval changes to, or additions of, officers of the Company; and

    considering questions of conflicts of interest of Board members and executive officers.

Our Board has determined that each of Mr. Canfield, Ms. Richardson and Ms. Rottenberg is a non-employee director and meets the definition of an independent director under the NYSE rules.

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Strategy Committee

Our Strategy Committee has the following responsibilities, among other things, as set forth in its written charter:

MEMBERS:

    Mr. Gips, Chairman
    Ms. Rottenberg
    Ms. White

RESPONSIBILITIES:

    reviewing with management our strategy and strategic plans;

    reviewing with management key issues and external developments impacting our strategy;

    facilitating an annual Board review of our strategy and strategic options;
    reviewing and providing guidance to management and the Board on our strategies for transactions, assisting management and the Board with the identification of transaction opportunities, assisting management and the Board with review of proposals made by management for transactions, and considering and making recommendation to the Board for proposed transactions.

Our Board has determined that each of Mr. Gips, Ms. Rottenberg and Ms. White is a non-employee director and meets the definition of an independent director under the NYSE rules.

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CORPORATE GOVERNANCE

Code of Ethics

We have adopted a written code of ethics applicable to our directors, officers and employees, including our principal executive officer and senior financial officers, in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and the rules of the SEC. In the event that we make any changes to, or provide any waivers from, the provisions of our code of conduct applicable to our principal executive officer and senior financial officers, we intend to disclose such events on our website or in a report on Form 8-K within four business days of such event. A copy of our code of ethics is available by clicking on "Corporate Governance" in the Investors section of our website, www.zayo.com.

Board Leadership Structure

With respect to the roles of Chairman of the Board and Chief Executive Officer, our corporate governance guidelines provide that the roles may be separated or combined, and our Board exercises its discretion in combining or separating these positions as it deems appropriate in light of prevailing circumstances. Our Board believes that the combination or separation of these positions should continue to be considered as part of our succession planning process. Mr. Caruso currently serves as both Chief Executive Officer and Chairman of the Board, which enables him to act as the key link between our Board and the other members of management. Our Board believes that his service in both roles is currently in the best interest of our Company and our stockholders, as it provides strong unified leadership for our Company.

Our corporate governance guidelines provide that if the Chairman of the Board is a member of management, or if no Chairman of the Board has been elected, the Board may designate any independent director as the Lead Director. The Lead Director is, among other things, responsible for coordinating and presiding over any required executive sessions and will be consulted in the determination of the frequency, place, time and length of regular meetings of the Board. The Board has appointed Mr. Canfield as Lead Director. The non-employee directors meet in regularly scheduled executive sessions without management to promote open and honest discussion.

Our corporate governance guidelines further provide the flexibility for our Board to modify our leadership structure in the future as appropriate. We believe that our Company, like many United States companies, is well served by this flexible leadership structure.

Risk Oversight

Our Board is responsible for overseeing our risk management process. Our Board focuses on our general risk management strategy, the most significant risks facing us, and oversees the implementation of risk mitigation strategies by management. Our Board is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters and significant transactions.

While the Board has primary responsibility for oversight of our risk management, the Board's standing committees support the Board by regularly addressing various risks in their respective areas of oversight. The Board has determined that the Nominating and Governance committee should oversee and evaluate management's enterprise risk management activities for the Board, designating oversight for specific areas of enterprise risk management to other committees of the Board. The Nominating and Governance Committee has allocated various categories of risk among itself and the other standing committees of the Board; specifically, the Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance with public reporting requirements; the Compensation Committee assists the Board in fulfilling its risk management oversight responsibilities with respect to risks arising from compensation policies and programs and employee culture; the Nominating and Governance Committee assists the Board in fulfilling its risk management oversight responsibilities with respect to risks related to corporate governance matters; and the Strategy Committee assists the Board in fulfilling its risk management oversight responsibilities with respect to risks related to strategic transactions and initiatives.

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CORPORATE GOVERNANCE

The Board, led by the Nominating and Governance Committee, conducts an annual self-evaluation of the Board and its members to determine whether it and its committees are functioning effectively. This process includes an annual self-evaluation by each Board committee, and an evaluation of each of the individual directors.

Selection of Board Nominees

The Nominating and Governance Committee will consider candidates for Board membership suggested by its members and other Board members, as well as management and stockholders, and uses the same criteria to evaluate all candidates. The Committee has established a procedure for submission of suggestions by stockholders and will consider candidates recommended in writing, including the candidate's full name, biographical information, qualifications for Board membership and personal references. All submissions should include verification of the stockholder status of the person submitting the recommendation and be sent to the Corporate Secretary at Zayo Group Holdings, Inc., 1805 29th Street, Suite 2050, Boulder, CO 80301.

In accordance with the Stockholders Agreement, investment funds affiliated with GTCR have the right to nominate one independent director for consideration by the Nominating and Governance Committee when the current term of their designee, Mr. Canfield, expires. If the Nominating and Governance Committee determines in good faith that a designee is not a suitable candidate then it may reject the designee, and GTCR shall have the right to nominate an alternative individual for consideration, such process to continue until a suitable candidate is designated. GTCR will retain these board nomination rights until its ownership of Company shares falls below 50% of the amount it owned immediately prior to the Company's initial public offering.

Candidates for nomination to our Board are selected by the Board based on the recommendation of the Nominating and Governance Committee in accordance with the Committee's charter, our Certificate of Incorporation and Bylaws, our corporate governance guidelines, the Stockholders Agreement and the director qualifications considerations set forth below. Evaluations of candidates generally involve a review of background materials, internal discussions and interviews with selected candidates as appropriate and, in addition, the Nominating and Governance Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees.

Director Qualifications

The Nominating and Governance Committee of the Board is responsible for evaluating and then reviewing with the Board from time to time the appropriate qualifications, expertise and characteristics required of Board members. This assessment includes an evaluation of experience and skills, including the individual's understanding of our industry, corporate finance, accounting, internal controls, technology, sales and marketing and strategic business planning. Other considerations include:

    the individual's strengths and contributions relative to overall corporate governance, service on Board committees, Company strategy, key customer and industry relationships, shaping of Company culture, evaluation of the execution and performance of the Company, and mentoring of Company executives;

    the independence, judgment, strength of character, reputation in the business community, ethics and integrity of the individual;

    the business or other relevant experience, skills and knowledge that the individual may have that will enable him or her to provide effective oversight of the Company's business;

    the fit of the individual's skillset and personality with those of the other Board members so as to build a Board that works together effectively and constructively;

    the individual's ability to devote sufficient time to carry out his or her responsibilities as a director in light of his or her occupation and the number of boards of directors of on which he or she serves; and

    diversity in respect of gender, ethnicity, geography, industry, function, personality type and age that the individual contributes to the Board in light of the current composition of the Board.

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CORPORATE GOVERNANCE

The brief biographical description of each director set forth in Proposal 1 above includes the primary individual experience, qualifications, attributes and skills of each of our directors that led to the conclusion that each director should serve as a member of our Board at this time.

Stockholder or Other Interested Party Communications

Stockholders or other parties interested in communicating directly with the Board, or specified individual directors or the non-management or independent directors as a group, may do so by writing the Corporate Secretary at Zayo Group Holdings, Inc., 1805 29th Street, Suite 2050, Boulder, CO 80301. The Secretary will review all such correspondence and will regularly forward to the Board or the specified individual director or group of directors copies of all such correspondence that, in the opinion of the Secretary, relates to the functions of the Board or its committees or that the Secretary otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by the Company that is addressed to members of the Board and request copies of such correspondence. Concerns relating to accounting, internal controls or auditing matters will immediately be brought to the attention of the Chairman of the Audit Committee and handled in accordance with procedures established by the Audit Committee with respect to such matters.

Director Attendance

During Fiscal 2017, the Board held seven meetings, the Audit Committee held five meetings, the Compensation Committee held five meetings, and the Nominating and Governance Committee held four meetings. The Strategy Committee was formed in Fiscal 2017, but held its first meeting after Fiscal 2017 had ended. Each director attended at least 75% of the meetings of the Board and the committees of the Board on which such director served (during the period that such director served on our Board and any committee).

We expect all members of the Board to attend our annual meetings of stockholders absent unusual circumstances.

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Executive Officers

The following sets forth the name, age, position and biographical information for each of our executive officers. For information regarding Mr. Caruso, please refer to Proposal 1 above titled "Election of Directors."

Andrew Crouch  

 


PHOTO

Officer Since: April 2017

President & Chief Operating Officer

Age    46



Mr. Crouch has served as our President and Chief Operating Officer since April 2017. In this role, he is responsible for leading all aspects of Zayo's global business operations. Previously, Mr. Crouch worked at Level 3 Communications, LLC ("Level 3"), a multinational telecommunications and internet service provider company, as Regional President, EMEA and Global Accounts Division from November 2014 through March 2017, Regional President, North America and Asia-Pacific from October 2012 through October 2014, and Regional President, North American Sales and Asia-Pacific from October 2011 through October 2012. Born in the U.K., he completed his studies there, with a Bachelor of Science in Management Sciences at the University of Manchester and a master's degree at University College London (UCL) in Telecommunications Management.


 

Matt Steinfort


 

 


PHOTO

Officer Since: September 15, 2017

Chief Financial Officer

Age    47



Mr. Steinfort has served as our Chief Financial Officer since September 15, 2017. Mr. Steinfort joined Zayo as Executive Vice President, Corporate Strategy, Development and Administration in November, 2016. He joined Zayo from Envysion, Inc., a privately-held video intelligence SaaS company, where he was co-founder and Chief Executive Officer from February 2006 through November 2016. Prior to Envysion, he was senior vice president of Corporate Strategy at ICG Communications, and held a variety of vice president roles at Level 3 Communications, including Consumer Voice, Corporate Strategy and Development, and Softswitch Strategy and Finance. Earlier in his career, Mr. Steinfort held positions at management consultancy Bain & Company and IT consultancy Cambridge Technology Partners. Mr. Steinfort received a bachelor's of science in civil engineering and operations research from Princeton University and an MBA from the MIT-Sloan School of Management.


 

Jack Waters


 

 


PHOTO

Officer Since: August 2016

Chief Technology Officer & President of Network Solutions

Age    52



Mr. Waters joined the Company in August 2016 as Chief Technology Officer and President of Network Solutions, and in early 2017 he became President of Zayo's Fiber Solutions segment. In this role, he oversees global technology and network strategy and execution, and leads Zayo's largest business segment. Prior to joining the Company, he was Chief Technology Officer at Level 3 from January 2008 to August 2016. He joined Level 3 in 1997 and held numerous leadership roles within that company. Before joining Level 3, Mr. Waters served as an executive staff member for MCI Communications, Inc. with responsibility for network architecture, design and implementation. He was an original member of the team responsible for InternetMCI, the company's initial Internet service. Prior to MCI, Mr. Waters served as director of engineering and operations for SURAnet, the Southeastern University Research and Academic Network. Mr. Waters serves on the FCC's Technical Advisory Council and the board of directors for the Colorado Technology Association. He holds a B.S. in Electrical Engineering from West Virginia University and an M.S. in Electrical Engineering from Johns Hopkins University.


 

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes the material elements of compensation for our named executive officers for Fiscal 2017. When we refer to "named executive", "named executive officer" or "NEO" in this section, we mean the five executives listed below. Chris Morley, our former President and Chief Operating Officer, ceased employment with the Company on May 2, 2017 and Ken desGarennes resigned from his position as Chief Financial Officer effective September 15, 2017; as both Mr. Morley and Mr. desGarennes were named executive officers during Fiscal 2017, their compensation for Fiscal 2017 is included in this section.

Fiscal 2017 named executive officers:

 
Name Position
Dan Caruso Chief Executive Officer
Ken desGarennes Chief Financial Officer
Andrew Crouch President & Chief Operating Officer
Jack Waters Chief Technology Officer & President of Network Solutions
Chris Morley former President & Chief Operating Officer

Executive Summary

Compensation Strategy

Our compensation philosophy and program design are essential elements of our culture and have led to our success in delivering returns for our shareholders. Our unique program provides us with a competitive advantage in successfully attracting talent in an industry that includes publicly traded communication infrastructure companies as well as organizations backed by private investment capital. We believe our program embodies and supports the entrepreneurial culture that has been critical to our success and is fundamental to our ability to create shareholder value.

The following distinctive elements of our executive compensation program support our company strategy:

    Our fundamental premise of delivering industry-leading returns for shareholders and appropriately sharing incremental value created with our executives and employees

    Our extensive reliance on equity-based pay to align executive pay with shareholder value creation

    Our strict use of equity value creation and market return performance criteria as determinants of both cash bonuses and earned stock grants

Organizational Performance

We provide communications infrastructure services, including fiber and bandwidth connectivity, colocation and cloud infrastructure to the world's leading businesses. We amass fiber, data center and structure assets and unleash their value by providing exceptional communication infrastructure services. Our Fiscal 2017 business strategy focused on realigning our business segments with key segments of the market to ensure continued high revenue and EBITDA growth and on continuing to expand our asset footprint and gain efficiencies through inorganic growth.

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In Fiscal 2017, we continued our transition to a post-IPO management team by hiring several new executives. Andrew Crouch joined as our new President and Chief Operating Officer. Mr. Crouch has extensive global experience running large scale organizations similar to Zayo and deep experience selling and marketing our core products. Jack Waters joined as our new Chief Technology Officer and President of Fiber Solutions. Mr. Waters has more than 30 years of experience in the communications infrastructure industry and is a well-known and respected technology leader. Matt Steinfort joined us as EVP of Corporate Strategy, Development and Administration, having held executive, operational and strategy roles at software and communications infrastructure companies. Mr. Steinfort assumed the role of our Chief Financial Officer of the Company September 15, 2017, replacing Ken desGarennes, who resigned as Chief Financial Officer and will depart the Company following a transition period expected to extend through the filing of the Company's Form 10-Q for the quarter ended December 31, 2017.

Fiscal 2017 was a year of uncertainty in our industry and headwinds in our business. Our industry underwent significant consolidation, several of our largest customers revisited their fiber strategies, and new competitors entered into our markets, and we worked through several large integrations following major acquisitions. In spite of this activity, our execution of our business strategy allowed us to succeed and deliver strong performance and growth.

Our key performance achievements in Fiscal 2017 included:

Total revenue growth of 28%, driven by organic growth as well as fiscal 2015 and 2016 acquisitions.
Closed the fiscal year with record operating metrics; fiscal fourth quarter net bookings and gross installs were both new records for the company.
Completed the Electric Lightwave ($1.4B), KIO ($11.9M) and Santa Clara Data Center ($11.3M) acquisitions.
Re-aligned the company into five new business segments to position it for increased growth.

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Compensation Actions and Outcomes

The table below summarizes our significant executive compensation actions and outcomes for Fiscal 2017:

Compensation Element
2017 Actions
2017 Outcomes
Base Salaries — see page 40 for details  

Fixed cash compensation as only a modest part of our executive pay program

 

Base salaries of NEOs were not increased in 2017

Incentive Cash Compensation ("ICC") — see page 40 for details  

CEO does not participate in Incentive Cash Compensation plan

Other NEOs' ICC targets unchanged from Fiscal 2016

Actual quarterly payouts primarily based on Equity IRR performance

 

ICC Payouts for NEOs who receive ICC (other than Mr. Crouch) for the four quarters of Fiscal 2017 were $0 - $25,000, representing 0% - 50% of target

Mr. Crouch joined the Company in Q2 and received 100% of his target ICC payout ($75,000) for each of Fiscal Q3 and Q4 per his sign-on arrangement

Performance Restricted Stock Units — see page 42 for details   Granted Performance RSUs as the primary element of our executive pay program:

Performance RSUs in the form of Part A RSUs awarded based on our financial and operational performance, primarily Equity IRR

Performance RSUs in the form of Part B RSUs vesting amounts based solely on our stock price performance

  Part A RSUs

Part A RSU grants to CEO had aggregate grant value of $1.5 million, 25% of target

Part A RSU grants to other NEOs (other than Mr. Crouch) ranged from $410,156 - $644,956, 35% - 65% of target

Per his sign-on arrangement, Mr. Crouch received 100% of the target value of his fiscal Q4 RSU grant ($1.3 million)

Part B RSUs

Part B RSU grants to CEO had aggregate grant date fair value of $11.7 million

Part B RSU grants to other NEOs ranged from $529,000 - $8.3 million

Part B RSUs granted to CEO in Fiscal 2016 vested at 189% of target in Fiscal 2017

Part B RSUs granted to other NEOs in Fiscal 2016 vested at 0% - 458% of target in Fiscal 2017

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Compensation Program Changes for Fiscal 2018

For Fiscal 2016, 72% of our shareholders voted in favor of our pay program in our annual "Say-On-Pay" vote. In preparation for our fiscal year ending in 2018 ("Fiscal 2018"), we conducted a detailed review of our executive pay program and engaged directly with many of our largest shareholders regarding our pay performance and pay philosophy. Following this review of our program, and given shareholder feedback, we made changes to our compensation program for Fiscal 2018 that illustrate our commitment to our philosophy of aligning our executives' pay with shareholder returns and providing reward for market-leading performance.

We made the following changes to our compensation program for Fiscal 2018:

    Shifted 100% of CEO's long-term incentive award target to Part B RSUs

    Company stock price is sole performance metric

    Recalibrated target payout and stock price performance requirement for Part B RSUs to more closely align our executive pay to market level

    Target payout reduced to 50% of Fiscal 2017 amount

    Target stock price performance requirement set at an above-market 15% year-over-year increase

    Extended vesting period for Part B RSUs from 12 to 15 months and eliminated 12-month holding period for vested Part B RSU shares, given that our stock ownership guidelines already ensure significant holding by our executives

Compensation Philosophy

Our compensation philosophy and program are integral to our culture, strategy and record of shareholder value creation. Since our formation in 2007, $1.1B of equity has been invested into Zayo and, as of June 30, 2017 our equity (inclusive of prior distributions) was worth approximately $7.9B, representing a 7X multiple of invested equity and a compounded equity internal rate of return ("IRR") over 40%. We believe a key factor in our growth and success has been our unique compensation program, both for executives and for our broader employee base.

Zayo seeks to be the employer of choice for highly skilled, entrepreneurial employees. We award performance-based equity compensation as an explicit, quantifiable and heavily-weighted part of the total compensation of nearly all of our employees. Total compensation includes salary, incentive cash compensation and equity compensation. We establish cash compensation at below median market levels and provide performance-based equity compensation opportunities at above median market levels. We believe our pay for performance philosophy attracts motivated, entrepreneurial employees by rewarding them for creating value for our shareholders.

Compensation for our executives is heavily weighted towards performance-based pay. As illustrated below, nearly 100% of our CEO's target total compensation is comprised of performance-based RSU awards. For our other named executive officers, approximately 97% of their target pay is comprised of performance-based compensation, 4% in the form of ICC and 93% in the form of performance-based RSU awards. Our target compensation opportunities for our executives are in the upper quartile of the market, but target pay is only earned if we deliver outstanding performance, measured as Equity IRR of 20% (see "Elements of Executive Compensation" below for description) and total shareholder return/stock price appreciation of 20%. As

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illustrated below, significantly more of our executives' compensation is performance-based, as compared to our peer group.

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Note: Zayo pay mix based on employee target compensation as of 6/30/2017. Zayo Comparator Peer pay mix based on public company proxies filed as of 6/30/2017. See comparator peer group on page 39

Not only is the majority of our NEO compensation performance-based, but also both our ICC and RSU programs require the achievement of market-leading performance in order to achieve target. Under our ICC and Part A RSU program, an Equity IRR of 20% is required to earn target payouts. If our Equity IRR is 6%, the payouts under the ICC and Part A RSUs are only 25% of target. Similarly, in order for the target award to be earned under our Part B RSUs, year-over-year stock price appreciation of 20% must be achieved. In order to achieve any payout, year-over-year stock price appreciation of a minimum 10% is required (25% prior to fiscal fourth quarter 2017).

GRAPHIC   GRAPHIC   GRAPHIC

Note: Zayo payout curves based on ICC, Part A and Part B payout structure as of 6/30/2017

The pay-for-performance orientation of our program is demonstrated by our CEO's Fiscal 2017 realizable compensation relative to his target total compensation opportunity. During Fiscal 2017, our stock price appreciation was approximately 10.6%, which compares favorably to long-term market returns. As shown below, Mr. Caruso's Fiscal 2017 realizable compensation was approximately $3.1 million, which represented approximately 20% of his target total compensation for Fiscal 2017.

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Note: The 2017 realizable compensation reflects Part A RSUs earned during 2017 valued based on the 6/30/17 stock price of $30.90 and Part B RSUs granted during 2017 that would be earned based on stock price performance if the performance period ended on 6/30/17 and valued based on the 6/30/17 stock price. The 2017 target pay reflects Mr. Caruso's aggregate value of salary, target ICC and target RSUs for Fiscal 2017.

Executive Compensation Governance and Processes

Role of the Executive Officers and Management

Management is responsible for developing the Company's compensation philosophy and programs in consultation with and under the oversight of the Compensation Committee. Our CEO makes recommendations to the Compensation Committee regarding the total compensation for each executive (excluding himself), including base salary, non-equity incentive compensation and equity participation as well as the financial targets and business unit and corporate objectives, which determine non-equity incentive compensation payouts. The Compensation Committee considers the CEO's recommendations in consultation with the full Board and makes final decisions for the total amount of compensation and each element of compensation for our executives other than the CEO, and the Compensation Committee makes recommendations to the full Board for its approval regarding the CEO's compensation.

The CEO and the Compensation Committee use their general knowledge of the compensation practices of other companies with whom we compete for executive talent, including telecommunications and web-scale companies, and the information provided by the Compensation Committee's consultant to form their recommendations and decisions. The day-to-day design and administration of savings, health, welfare and paid time-off plans and policies applicable to our employees in general, including our executives, are handled by company management.

Role of the Compensation Committee

The Compensation Committee assists the Board in fulfilling its responsibility relating to oversight and determination of compensation of the Company's executive officers and directors. The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of the CEO, evaluates the CEO's performance in light of those goals and objectives, approves the grant of equity awards to the CEO and makes recommendations to the Board regarding the CEO's compensation level based on this evaluation. The Compensation Committee also oversees the evaluation of the other executive officers of the Company, approves

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the grant of equity awards to such officers and sets their compensation, in each case based upon the recommendation of the CEO. The Compensation Committee oversees the Company's use of severance, non-competition and non-solicitation arrangements with employees, including the approval of any such arrangements to be made with any executive officer of the Company. The Compensation Committee also reviews, and either approves or endorses for the Board's approval, the design of and changes to the Company's compensation or benefit plans, including incentive compensation (bonus) and equity-based plans.

Role of the Compensation Consultant

The Compensation Committee retains ultimate responsibility for executive compensation-related decisions. During 2017, the Compensation Committee engaged Willis Towers Watson to assist with the review of our executive pay programs. Willis Towers Watson analyzed our executive compensation structure and plan designs and assessed whether the executive compensation program is competitive and consistent with our overall executive compensation philosophy.

In performing their work, Willis Towers Watson developed comparative market data based on the following comparator group of companies, which was approved by the Compensation Committee:

 
Public Company Comparator Group

Akamai Technologies, Inc.


Digital Realty Trust, Inc.


QTS Realty Trust, Inc.

Box, Inc.


EchoStar Corporation


SBA Communications Corporation

Cable ONE, Inc.


Equinix, Inc.


Symantec Corporation

Cogent Communications Holdings, Inc.


F5 Networks, Inc.


United States Cellular Corporation

CoreSite Realty Corporation


FireEye, Inc.


ViaSat, Inc.

Crown Castle International Corp.


GTT Communications



CyrusOne Inc.


Level 3 Communications, Inc.


 

The Board and Compensation Committee have established the following procedures with regard to Compensation Committee consultants:

    the Compensation Committee has the sole authority to retain, obtain the advice of and terminate any compensation consultant, independent legal counsel or other advisor;

    the Compensation Committee may select such consultant only after considering the consultant's independence from the Company and management; and

    the Compensation Committee evaluates the objectivity of the services provided by the consultant each year and determines whether to continue to retain the consultant.

The Compensation Committee assessed the independence of Willis Towers Watson as required by the Compensation Committee's charter, referenced above, and concluded that Willis Towers Watson is independent from the Company and management and that Willis Towers Watson's work has not raised any conflicts of interest.

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Elements of Executive Compensation

The primary elements of the total compensation program for our named executive officers are outlined and summarized below.

GRAPHIC

Base Salary

We provide our executives with a base salary to appropriately compensate them for their role and the skills and abilities they bring to our organization. Our base salaries are generally below those of our peer companies, and in the case of our CEO, he receives as base salary only the minimum dollar amount required to enable him to be eligible to participate in our 401(k) plan. The base salaries may be reviewed and adjusted from time to time based on individual merit, promotions or other changes in job responsibilities. During Fiscal 2017, the base salaries for our named executive officers were unchanged from Fiscal 2016, as the salaries were appropriate given our philosophy of de-emphasizing fixed cash compensation.

 

Executive


Title
Annual Salary

Dan Caruso

Chief Executive Officer



$

17,500

Ken desGarennes

Chief Financial Officer $ 240,000

Andrew Crouch

President & Chief Operating Officer $ 240,000

Jack Waters

Chief Technical Officer $ 325,000

Chris Morley

Chief Technology Officer & President of Network Solutions $ 220,000

Incentive Cash Compensation ("ICC")

We also have a quarterly cash incentive plan in which most of our full-time, non-sales employees, including our executives (with exception of the CEO), participate. This plan provides our executives with potential cash payments that act as incentives for current performance, while also encouraging behavior that is consistent with our long-term goals.

We make ICC payments to participating executives if quarterly financial performance targets (based on Equity IRR improvement) and certain qualitative business unit and corporate objectives are met. This includes a qualitative self-assessment of each business unit's historical and projected Equity IRR contribution to the

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company. The financial targets and business unit and corporate objectives are recommended by the CEO (who does not participate in the plan) and are approved by the Compensation Committee. Our CEO recommends to the Compensation Committee the quarterly payouts under this plan, from 25% to 200% of target payout, based on the achievement of the financial performance targets and his assessment of achievement of business unit and corporate objectives. The actual financial results may be adjusted up or down to normalize for certain non-recurring or unusual events (e.g., timing impact of a major acquisition) with approval of the Compensation Committee.

In Fiscal 2017, quarterly ICC incentives were earned based on our Equity IRR performance. Equity IRR is a critical measure of our performance, providing an assessment of our effectiveness in generating returns on the equity capital we invest in our business.

At the beginning the performance period, we calculate our Equity Value by applying a constant multiple to our EBITDA during the period to establish our Total Enterprise Value. Net debt is subtracted from our Total Enterprise Value to establish our Equity Value. At the end of the period, we calculate our Equity Value using this same multiple and subtract any equity invested in the business during the period. We then compare the period ending Equity Value to the Equity Value at the beginning of the period to determine our Equity IRR.

Illustrative Calculation of Equity IRR

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Equity IRR for each quarter is calculated over a two-quarter and four-quarter basis. A historical view looks at the prior four quarters, and a forward-looking trajectory view focuses on leading indicators that may impact subsequent two- to four-quarter Equity IRR. We measure our performance over multiple quarters to reduce the effect of short-term fluctuations in the financial components that are used to calculate our Equity IRR. We believe the use of the Equity IRR calculation provides a good measure for short-term and long-term compensation, as the consistent growth will lead to continued long-term value creation for our employees and shareholders.

In addition to measuring the overall company level Equity IRR, we measure our individual business segments' overall Equity IRR performance by determining the equity value created at the segment level through the use of an EBITDA multiple consistent with the market multiple for each of our segments.

The specific Equity IRR performance ranges and associated ICC payout ranges for each quarter in Fiscal 2017 were as follows:

Equity IRR Performance Threshold


Non-Equity Incentive
Compensation Plan
Payout of Target

Less than 6%

25%

Between 6% - 10%

25% - 50%

Between 10% - 20%

50% - 100%

Between 20% - 30%

100% - 150%

Between 30% - 40%

150% - 200%

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Actual ICC payouts were approved by the Committee and the Board (for the CEO) evaluation of our Equity IRR performance and our performance relative to qualitative business unit and qualitative corporate objectives.

The following table shows the payouts as a percentage of target that were earned by our named executive officers for each quarter of Fiscal 2017. The company-wide ICC payouts, driven largely by our Equity IRR calculations, were 70%, 50%, 50% and 50% for the first quarter, second quarter, third quarter and fourth quarter, respectively. First quarter and second quarter payouts for Mr. desGarennes, Mr. Morley and Mr. Waters (second quarter only, per his sign-on arrangement) were lower than the overall company payouts for such quarters. The third quarter payouts for Mr. desGarennes and Mr. Morley were zero for that quarter, and the payout for Mr. Waters matched that for the company overall (Mr. Crouch received 100% of his target per his sign-on arrangement). The fourth quarter payouts to Mr. desGarennes and Mr. Waters were 25%, or half of the company overall payout (Mr. Crouch received 100% of his target per his sign-on arrangement). Our executives received lower than overall company payouts when our Equity IRR was below our targets, as we hold executives disproportionately accountable for operational performance below expectations.

ICC Plan Payout % of Target

Named Executive Officer


First
Quarter


Second
Quarter


Third
Quarter


Fourth
Quarter


Annual

Dan Caruso

na

na

na

na

na

Ken desGarennes

30% 25% 0% 25% 20%

Andrew Crouch

na na 100% 100% 100%

Jack Waters

na 25% 50% 25% 33%

Chris Morley

40% 25% 0% na 22%

Company Payout

70% 50% 50% 50% 55%

The table below shows the aggregate four quarter ICC targets and actual payouts based on the payout percentages noted above for Fiscal 2017 for our named executive officers.

Name


Plan
Target Payout


Plan
Actual Payout

Dan Caruso



$



$

Ken desGarennes

$ 300,000 $ 60,000

Andrew Crouch

$ 150,000 $ 150,000

Jack Waters

$ 150,000 $ 50,000

Chris Morley

$ 82,500 $ 17,981

Performance Restricted Stock Units

A significant percentage of total compensation for our executives consists of long-term incentive compensation in the form of RSUs. We believe RSUs both reward our named executive officers for delivering meaningful returns to our shareholders and promote stock ownership, creating a clear link between the interest of executives and those of stockholders. In support of our compensation objectives, the target value of equity compensation is generally above market median levels, so that, when combined with our below median cash compensation, we create total compensation opportunities in the top quartile of our industry when we deliver outstanding performance.

The opportunity for our named executive officers to earn RSUs is provided through our Part A and Part B RSU programs. Both the Part A and Part B RSUs are earned based on the achievement of performance, with our Part A RSUs being earned based on financial and operational performance and the Part B RSUs being earned based on our stock price appreciation. In Fiscal 2017, 61% of Mr. Caruso's RSU target compensation was delivered in the form of Part B RSUs and 39% through Part A RSUs. For our other named executive officers,

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21-50% of their RSU target compensation was delivered in the form of Part B RSUs, with the balance taking the form of Part A RSUs.

Part A RSUs.    Under our Part A RSU program, our executives are eligible to earn quarterly awards of RSUs. Each participant in the Part A program has a target annual award value. 25% of the target annual award value is allocated to each fiscal quarter. Participants are eligible to earn Part A RSUs each quarter up to 300% of their quarterly target award. The actual value of Part A RSUs earned for any fiscal quarter is determined in the sole discretion of the Compensation Committee, taking into account the Company's Equity IRR for the quarter and other Company, group and individual performance factors. The table below provides the Fiscal 2017 quarterly and full year target award values for each of our named executive officers under our Part A RSUs program.

Part A Quarterly Target Compensation Summary ($000s)

Name


1st
Quarter


2nd
Quarter


3rd
Quarter


4th
Quarter


Full-Year
Target

Dan Caruso


$

1,599

$

1,531

$

1,686

$

1,247


$

6,064

Ken desGarennes

$ 283 $ 231 $ 349 $ 817 $ 1,679

Andrew Crouch

na na na $ 1,308 $ 1,308

Jack Waters

na $ 391 $ 391 $ 391 $ 1,172

Chris Morley

$ 364 $ 312 na $ 676

The number of Part A RSUs granted is calculated at the end of each quarter based on the percentage of target achieved multiplied by the target grant value divided by the average closing price of the Company's common stock over the last ten trading days of the quarter. Part A RSUs vest six months after the beginning of the measurement period, contingent upon continued employment at the time of vesting, and at that time convert into an equal number of shares of Company common stock. We believe our practice of making quarterly grants that vest six quarters after the beginning of the measurement period, versus other plans that make larger annual grants that vest over a longer period of time (e.g., three years), is comparable in terms of the time it takes to vest a full year's worth of granted equity (as illustrated below) and more effectively aligns determination of payout with actual company performance.

Part A Granting and Vesting Illustration

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The table below details the Equity IRR performance ranges used to determine quarterly grants during Fiscal 2017. For the quarter ending June 30, 2017, we increased the payouts for performance in the 20-40% range in order to provide greater incentive for employees and management, primarily those employees who do not receive Part B RSUs, to achieve our Equity IRR targets and create shareholder value. At the same time, we reduced the Part B RSU maximum payouts, as noted below.

Part A Payout % at Top End of Range by Quarter Immediately Preceding the Grant Date

Equity IRR Performance Threshold


September 30,
2016


December 30,
2016


March 31,
2017


June 30,
2017

Less than 6%

25%

25%

25%

25%

Between 6% - 10%

25% - 50% 25% - 50% 25% - 50% 25% - 50%

Between 10% - 20%

50% - 100% 50% - 100% 50% - 100% 50% - 100%

Between 20% - 30%

100% - 150% 100% - 150% 100% - 150% 100% - 200%

Between 30% - 40%

150% - 200% 150% - 200% 150% - 200% 200% - 300%

The table below details the Part A RSUs granted to our named executive officers during Fiscal 2017. The company-wide Part A payouts, driven largely by our Equity IRR calculations, were 70%, 50%, 65% and 50% for the first quarter, second quarter, third quarter and fourth quarter, respectively. The first quarter Part A RSU payout for Mr. Caruso aligned with the Company's Equity IRR for the quarter. Mr. desGarennes' and Mr. Morley's Part A RSU payouts were slightly above company payout levels given their lower ICC payouts and to reward them for strong leadership through that quarter's organizational restructuring. The second quarter Part A RSU payouts were 25% for all named executive officers in light of modest Equity IRR performance for the quarter, weak leading indicators and to make RSUs available to reward key employees and top sales contributors during the quarter. The third and fourth quarter Part A RSU payouts for Mr. Caruso were 0% given our Equity IRR for such quarters relative to our expectations and to make RSUs available to reward key employees and top sales contributors during the quarter. Per his sign-on arrangement, Mr. Crouch received 100% of the target value of his fourth quarter Part A RSU grant.

Part A Payouts for Compensation Earned by Quarter in Fiscal 2017

1st Quarter
2nd Quarter
3rd Quarter
4th Quarter

Executive


Shrs
Granted


% of
Target


Shrs
Granted


% of
Target


Shrs
Granted


% of
Target


Shrs
Granted


% of
Target

Dan Caruso


37,586

70

%


11,527

25

%


0

0

%


0

0

%

Ken desGarennes

7,590 80 % 1,741 25 % 3,504 33 % 0 0 %

Andrew Crouch

n/a n/a n/a n/a n/a n/a 41,511 100 %

Jack Waters

n/a n/a n/a n/a 7,663 65 % 12,402 30 %

Chris Morley

12,264 100 % 2,353 25 % 0 0 % n/a n/a

Company Payout

70 % 50 % 65 % 50 %

Note: Reflects RSU grants earned based on target compensation. Excludes sign-on RSUs for Mr. Crouch and Mr. Waters.

Part B RSUs.    Under our Part B RSU program, our named executive officers are awarded grants of Part B RSUs on a quarterly basis. The number of Part B RSUs granted at the beginning of the measurement period is based upon the applicable NEO's target value divided by the average closing price of the Company's common stock over the last ten trading days of the quarter preceding the measurement period, increased by 20%, which represents our target stock price appreciation over the associated performance period. We believe our 20% stock price appreciation objective represents a challenging performance objective, which significantly exceeds historical market returns. The number of shares that vest in relation to the Part B RSUs is based on our stock price appreciation over the 12 month measurement period following the grant. In Fiscal 2017, all shares vesting in relation to Part B RSUs were required to be held by the recipients for 12 months following the vesting dates.

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Part B Grant and Earning Illustration

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The table below details our named executive officers' quarterly Part B RSU target awards during Fiscal 2017. The target Part B RSU awards were calculated based on an average closing price of our common stock for the last ten trading days of each quarter, increased by 20%. For the quarters ended June 30, 2016, September 30, 2016, December 31, 2016 and March 31, 2017, the average closing price was $27.29, $29.78, $33.20 and $33.13, respectively.

Summary of Part B RSUs Earned and Granted during Fiscal 2017

1st Quarter
2nd Quarter
3rd Quarter
4th Quarter

Name


Quarterly
Target $000s


# of RSUs
Quarterly
Target $000s


# of RSUs
Quarterly
Target $000s


# of RSUs
Quarterly
Target $000s


# of RSUs

Dan Caruso



$

2,330

71,160


$

2,398

67,113


$

2,242

56,286


$

2,681

67,439

Ken desGarennes

$ 1,760 53,752 $ 1,811 50,695 $ 1,694 42,517 $ 1,226 30,822

Andrew Crouch

n/a n/a n/a n/a n/a n/a $ 1,089 32,884

Jack Waters

n/a n/a n/a n/a $ 391 9,805 $ 391 9,824

Chris Morley

$ 1,760 53,752 $ 1,811 50,695 $ 1,694 42,517 n/a n/a

Part B RSUs are earned based on our stock price performance over the one year performance period following the initial award. Our stock price performance is determined using our average closing stock price over the last ten trading days of the quarter immediately prior to the grant and the average closing price over the last ten trading days of the measurement period. The actual number of Part B RSUs earned under each quarterly grant during Fiscal 2017 will be based on the table below. No Part B RSUs will be earned if our stock price increases less than 6% during the associated performance period. For quarter ending June 30, 2017, we reduced the number of executives participating in our Part B share program to limit it to our key executives who are driving the strategy and execution at the corporate level, across all of our business segments. As part of this change, we also increased the proportion of Part Bs, as a percentage of those executives' compensation target, to base more of their compensation directly upon shareholder returns. Lastly, the payout schedule was further adjusted

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to raise the bar for minimum return required to receive any payouts from 6% to 10%, while lowering the maximum level of payouts from 600% to 420%.

Payout % at Top End of Range by Quarter Immediately Preceding the Grant Date

Stock Price Performance


September 30,
2016


December 30,
2016


March 31,
2017


June 30,
2016

Less than 6%

0%

0%

0%

0%

Between 6% - 10%

0% - 33% 0% - 33% 0% - 33% 0%

Between 10% - 20%

33% - 100% 33% - 100% 33% - 100% 0% - 100%

Between 20% - 30%

100% - 450% 100% - 450% 100% - 450% 100% - 200%

Between 30% - 40%

450% - 600% 450% - 600% 450% - 600% 200% - 420%

The value of the shares earned under the Part B RSU program is capped such that in the event that stock price performance exceeds 40%, the number of shares earned by our named executive officers are adjusted downward so that the value of the earned shares does not exceed the value of the shares that would be earned assuming we achieve 40% stock price appreciation.

The table below details the actual number of Part B RSUs granted during Fiscal 2016 that were earned during 2017. Our stock price appreciation over the one year period associated with the four quarterly awards was 8%, 12%, 26% and 37%. The summary below reflects the shares vested based on the payout schedule associated with the stock price appreciation. The Part B program delivers meaningful incentives when we create significant value for our shareholders. When our price appreciation is less than 10%, which is above the long-term return of the public markets, our executives earn no payout under the program.

Part B Payouts for Compensation Earned by Quarter in Fiscal 2016

1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Full Year

Executive


Shares
Granted


Shares
Vested


Pay
%


Shares
Granted


Shares
Vested


Pay
%


Shares
Granted


Shares
Vested


Pay
%


Shares
Granted


Shares
Vested


Pay
%


Shares
Granted


Shares
Vested


Pay
%

Dan Caruso


65,476

0

0

%


68,038

13,488

20

%


71,756

159,208

222

%


79,916

365,671

458

%


285,186

538,368

189

%

Ken desGarennes

51,835 0 0 % 53,864 10,678 20 % 56,239 124,780 222 % 61,409 280,988 458 % 223,347 416,447 186 %

Chris Morley

51,835 0 0 % 53,864 10,678 20 % 56,239 124,780 222 % 61,409 280,988 458 % 223,347 416,447 186 %

Sign-On RSUs.    In Fiscal 2017, Messrs Crouch and Waters received 47,622 shares and 64,497 shares, respectively, of the Company's common stock upon the vesting of special one-time sign-on awards of RSUs that were awarded when they joined the Company pursuant to the terms of their employment agreements. Per such agreements, the RSUs were granted and vested the same day in order to reflect the dollar amounts noted in their agreements. See "— Employment Agreements" below for more detail about the timing and amounts of such awards.

Benefits

We offer our executives the same health and welfare benefit and disability plans that we offer to all of our employees. These benefits are consistent with industry norms and, combined with the other elements of executive compensation, are necessary to be competitive with peers in attracting and retaining talent.

Change of Control and Accelerated Vesting

Under the respective employment agreements for Messrs. Crouch and Waters, each of their one-time sign-on awards of RSUs vest in full within 60 days of a change of control of the Company (as defined in such employment agreements). Under our 2014 Stock Incentive Plan, as amended, if a "change of control" of the Company occurs as defined in such 2014 Stock Incentive Plan, the Compensation Committee must provide for the treatment of any unvested RSU awards pursuant to one or a combination of the following methods: (a) cancellation and cash settlement of all such awards; (b) accelerated vesting of all such awards, based on the greater of performance through a date determined by the Compensation Committee or target performance, if

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applicable; and (c) assumption or continuation of all such awards by the successor company, provided that the vesting of such awards will be accelerated if the grantee is terminated without cause within 18 months after such change in control.

Employment Agreements

Dan Caruso, was party to an employment agreement effective February 15, 2014 for a term that expired on July 2, 2017. Mr. Caruso is not currently party to an employment agreement with the Company. The previous employment agreement could be terminated by Mr. Caruso, Communications Infrastructure Investments, LLC ("CII") or the Company for any or no reason at any time subject to certain conditions. If Mr. Caruso resigned for Good Reason or was terminated without Cause (as such terms are defined in the employment agreement), or upon his death, he was entitled to receive his base salary through the termination date and any accrued benefits, and all of his unvested common units were immediately deemed fully vested as of the termination date. Mr. Caruso was restricted from participating in a competing business and soliciting our current customers or hiring our existing employees or contractors through July 2, 2017, except that these restrictions did not apply to Mr. Caruso in the event of a Company sale, his termination without Cause or his voluntary resignation with Good Reason or in certain other circumstances set forth in the employment agreement. The employment agreement also confirmed that Mr. Caruso's previously issued equity compensation awards of common units and preferred units in CII fully vested as of February 15, 2014, except with respect to certain unvested common units that vested as provided in Schedule A to the employment agreement. In accordance with Schedule A of the agreement, Mr. Caruso's unvested common units were to vest one-third on the first anniversary of the grant date and thereafter one-thirty sixth of the total number of units in the grant vested each month until fully vested on the third anniversary of the grant date. We had the right to repurchase vested units held by Mr. Caruso at fair market value upon a breach by Mr. Caruso of any term of his employment agreement or certain other agreements with us.

We entered into an employment agreement with Andrew Crouch, dated March 31, 2017. Pursuant to such employment agreement, Mr. Crouch receives an annual base salary of $240,000, target annual ICC of $300,000 (quarterly targets of $75,000 each), and target annual equity compensation (in the form of RSUs) of $10,460,000 (quarterly targets of $2,615,000 each). In addition, Mr. Crouch was granted, upon his appointment, a one-time sign-on award of RSUs with an aggregate value of $7,500,000, vesting in five equal installments on each of June 30, 2017, September 30, 2017, December 31, 2017, March 31, 2018 and April 30, 2018 (with the number of shares delivered on each vesting date calculated to be based on the closing market price of our common stock for the prior 10 trading days). The sign-on award vests in full within 60 days of a change of control of the Company (as defined in the employment agreement), and continues to vest in accordance with its terms in the event that Mr. Crouch is terminated other than for "cause" or resigns for "good reason" (each as defined in the Employment Agreement). Subject to Mr. Crouch being actively employed with the Company and not having provided notice of voluntary termination as of the payment date, he will receive quarterly ICC payments of not less than 100% of his target amount for the first three quarters of his employment (with the initial quarterly ICC payment to be paid by May 31, 2017 (for the quarter ending March 31, 2017), and the next two quarterly payments by September 30, 2017 (for the quarter ending June 30, 2017) and November 30, 2017 (for the quarter ending September 30, 2017)), and quarterly ICC payments of not less than 50% of his target amount for the following two quarters (namely, the quarter ending on December 31, 2017 and the quarter ending on March 31, 2018). Pursuant to the employment agreement, Mr. Crouch received an award of "Part A" RSUs of not less than 100% of his target amount thereof in August 2017 for the full quarter ended June 30, 2017, with such award to vest October 1, 2018, and is to receive an award of "Part B" RSUs of not less than 100% of his target amount thereof each quarter (with the actual amount at vesting to be based on Company performance in accordance with the terms of the Company's stock incentive plan as modified from time to time), with the first such "Part B" award made on July 1, 2017 and vesting July 1, 2018. The Company also agreed to reimburse Mr. Crouch for up to $150,000 in documented relocation expenses in connection with his relocation to the U.S.

We entered into an employment agreement with Jack Waters, dated July 27, 2016. Pursuant to such employment agreement, Mr. Waters receives an annual base salary of $325,000, target annual ICC of $200,000 (quarterly targets of $50,000 each), and target annual equity compensation (in the form of RSUs) of $3,125,000. In addition, Mr. Waters was granted, upon his appointment, a one-time sign-on award of RSUs with an aggregate

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value of $3,500,000, vesting in five equal installments on each of December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017 (with the number of shares delivered on each vesting date calculated to be based on the closing market price of our common stock for the prior 10 trading days). The sign-on award vests in full within 60 days of a change of control of the Company (as defined in the employment agreement), and continues to vest in accordance with its terms in the event that Mr. Waters is terminated other than for "cause" or resigns for "good reason" (each as defined in the Employment Agreement). If Mr. Waters was terminated without cause prior to December 31, 2017, he would have received a one-time lump sum cash payment from the Company equal to either $600,000, if the date of termination was March 31, 2017, or $300,000, if the date of termination is on or after March 31, 2017 and on or prior to December 31, 2017.

We do not maintain any employment agreements with any of our other named executive officers.

Stock Ownership Guidelines

Our Board believes that Company directors and executive officers should have a meaningful ownership stake in the Company to align the financial interests of executives, directors and stockholders, to foster a long-term management orientation and to promote sound corporate governance. Therefore, the Board has adopted stock ownership guidelines that apply to our non-employee directors and our executive officers. Under these guidelines, our executive officers are required to own shares of our common stock equal in value to multiples of their base salaries as follows: Chief Executive Officer — 8x; Chief Financial Officer — 5x; other executive officers — 3x. Our non-employee directors are required to own shares of our common stock equal in value to five times the annual retainer for Board service (assuming each director elected to receive the annual retainer in cash, after taxes and excluding Committee fees or fees for service as Lead Director). Non-employee directors who do not receive compensation for their service on our Board are exempt from our stock ownership guidelines.

Executive officers and non-employee directors (collectively, "Participants") must meet their applicable stock ownership targets within five years of becoming subject to the guidelines. Until a Participant achieves the required level of ownership, he or she is required to retain at least 50% of the net shares received as a result of the vesting of equity grants. Net shares are those that remain after shares are netted to pay any applicable tax withholdings. Furthermore, after reaching the applicable stock ownership target, our executive officers are required to retain at least 50% of the net shares received as a result of the vesting of equity grants for a period of one year from the date of vesting. Shares of common stock owned outright or underlying time-vesting equity grants are counted for purposes of these guidelines.

Compliance with stock ownership guidelines is monitored by the Nominating & Governance Committee, which is required to make an annual report regarding compliance to the full Board.

All of the Company's directors and executive officers are in compliance with our stock ownership guidelines as of the date hereof.

Pledging and Hedging of Company Securities

Pursuant to a revised insider trading policy adopted by our Board in August 2016, our directors, officers and all other employees are prohibited from pledging Company stock in order to secure personal loans or other obligations, including holding Company stock in a margin account. Individuals who have Company stock pledged as of the date of the revised policy were allowed until December 31, 2016 to remove the pledged status of the stock. Also pursuant to such revised policy, our directors, officers and all other employees are prohibited from engaging in short sales involving Company securities; "derivative" transactions, including exchange-traded put or call options; purchasing financial instruments intended to offset decreases in the market value of Company securities (such as prepaid variable forward contracts, equity swaps, collars and exchange funds); or entering into any other transactions with respect to Company securities with comparable economic consequences in short sales or other derivative or hedging transactions with respect to Company securities, with no exceptions pre-approved or pre-cleared transaction.

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Risk Considerations in Compensation Programs

In Fiscal 2017, we conducted an assessment of our compensation policies and practices for our executives and employees and concluded that these policies and practices are not reasonably likely to have a material adverse effect on our Company.

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Summary Compensation Table

The following summary compensation table sets forth information concerning the annual and long-term compensation of our named executive officers in Fiscal 2017, Fiscal 2016 and Fiscal 2015.

Name and Principal Position


Fiscal
Year



Salary($)



Stock
Awards
($)(1)







Non-Equity
Incentive Plan
Compensation
($)(2)







All Other
Compensation
($)(3)




Total
($)
 
Dan Caruso     2017   $ 17,500   $ 15,137,857       $ 328   $ 15,155,685  
Chief Executive Officer     2016   $ 17,500   $ 11,844,408       $   $ 11,861,908  
      2015   $ 176,875   $ 17,568,622       $   $ 17,745,497  
Ken desGarennes   2017   $ 240,000   $ 9,048,400   $ 60,000   $ 5,400   $ 9,353,800  
Chief Financial Officer   2016   $ 240,000   $ 6,823,981   $ 172,500   $ 5,300   $ 7,241,781  
  2015   $ 240,000   $ 9,354,628   $ 197,685   $   $ 9,792,313  
Andrew Crouch     2017   $ 42,000   $ 2,343,603   $ 150,000       $ 2,535,603  
President & Chief Operating Officer     2016                   $  
      2015                   $  
Jack Waters   2017   $ 285,606   $ 2,860,129   $ 50,000   $ 4,879   $ 3,200,615  
Chief Technology Officer &   2016            
President of Network Solutions   2015            
Chris Morley     2017   $ 185,000   $ 8,387,181   $ 17,981   $ 5,400   $ 8,595,562  
President & co-Chief Operating Officer     2016   $ 220,000   $ 6,990,169   $ 48,125   $ 5,300   $ 7,263,594  
      2015   $ 220,000   $ 9,436,399   $ 75,625   $   $ 9,732,024  
(1)
Stock awards reported include both the grant date value of the Part A RSU awards and Part B RSU awards, in each case calculated in accordance with FASB ASC Topic 718. For the Part B RSU awards, the values reported in the table are based on the target award based on fair value on the grant date. The grant date fair values of the Part B RSU awards, assuming maximum performance, are: Mr. Caruso—$39,899,676, Mr. desGarennes—$27,693,781, Mr. Waters-$2,782,505, Mr. Crouch-$3,996,590 and Mr. Morley—$23,947,799.

(2)
Comprises compensation earned in the respective year under our quarterly non-equity incentive plan, which we describe under "Elements of Executive Compensation — Incentive Cash Compensation (ICC)."

(3)
Includes current and prior FY year 401(k) contributions not previously reported.

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Grants of Plan Based Awards in Fiscal 2017

The following table provides information about grants of plan-based awards to our named executive officers in Fiscal 2017 and non-equity incentive plan award information for Fiscal 2017:

 
Grant



Estimated possible payouts under
non-equity incentive plan
awards ($)(1)






Estimated Future Payouts Under
Equity Incentive Plan
Awards (#)(2)(3)








All Other
Stock Awards:
Number of
Shares of
Stock or Units









Grant Date
Fair Value
of Stock
Awards
 
                 

Name



Date

Threshold

Target

Maximum

Threshold

Target

Maximum

(#)(4)
($)  

Dan Caruso

                                                       

Part A

    8/31/16                             59,111     1,714,810  

Part A

    11/29/16                             37,856     1,313,982  

Part A

    2/28/17                             11,527     363,331  

Part A

    5/22/17                             0     0  

Part B

    8/31/16                 6,404     71,160     365,762         3,344,520  

Part B

    11/29/16                 6,040     67,113     344,961         5,071,058  

Part B

    2/28/17                 5,066     56,286     289,310         1,541,674  

Part B

    5/4/17                 7,418     67,439     242,780         1,788,482  

Ken desGarennes

                                     

Part A

  8/31/16               9,637   279,569  

Part A

  11/29/16               7,590   263,449  

Part A

  2/28/17               1,741   54,876  

Part A

  5/22/17               3,504   111,708  

Part B

  8/31/16         4,838   53,752   276,285     2,526,344  

Part B

  11/29/16         4,563   50,695   260,572     3,830,514  

Part B

  2/28/17         3,827   42,517   218,537     1,164,541  

Part B

  5/4/17         3,390   30,822   110,959     817,399  

Cash Incentive

      300,000   600,000            

Andrew Crouch

                                                       

Sign-on RSU

    6/30/17                             47,622     1,471,520  

Part B

    5/4/17                 3,617     32,884     118,382         872,084  

Cash Incentive

                150,000     300,000                                

Jack Waters