Time Warner Cable 2015 Annual Report Download - page 75

Vote Required for Approval
The affirmative vote of a majority of the votes duly cast by the holders of the Common Stock is required to
adopt this proposal.
PROPOSAL FIVE: Proposal Regarding Prohibition on Accelerated Vesting of Equity Awards in a Change
in Control
The Trust for the International Brotherhood of Electrical Workers’ Pension Benefit Fund (the “IBEW”),
900 Seventh Street, NW, Washington, DC 20001, the beneficial owner of 13,115 shares of Common Stock, has
advised the Company that it intends to propose a resolution at the Annual Meeting. If the proponent does not
appear at the Annual Meeting or send a qualified representative to present the proposal, the Company need not
present the proposal for a vote at the Annual Meeting. The proposed resolution and statement in support thereof
are set forth below:
RESOLVED: The shareholders ask the board of directors of Time Warner Cable Inc. to adopt a policy that in
the event of a change in control (as defined under any applicable employment agreement, equity incentive plan or
other plan), there shall be no acceleration of vesting of any equity award granted to any senior executive officer,
provided, however, that the board’s Compensation Committee may provide in an applicable grant or purchase
agreement that any unvested award will vest on a partial, pro rata basis up to the time of the named executive
officers’ termination, with such qualifications for an award as the Committee may determine.
For purposes of this Policy, “equity award” means an award granted under an equity incentive plan as defined in
Item 402 of the SEC’s Regulation S-K, which addresses elements of executive compensation to be disclosed to
shareholders. This resolution shall be implemented so as not to affect any contractual rights in existence on the
date this proposal is adopted, and it shall apply only to equity awards made under equity incentive plans or plan
amendments that shareholders approve after the date of the 2015 annual meeting.
SUPPORTING STATEMENT
Time Warner Cable Inc. (“Company”) allows senior executives to receive an accelerated award of unearned
equity under certain conditions after a change of control of the Company. We do not question that some form of
severance payments may be appropriate in that situation. We are concerned, however, that current practices at the
Company may permit windfall awards that have nothing to do with an executive’s performance.
According to last year’s proxy statement, a change in control and termination as of December 31, 2013 could have
accelerated the vesting of $65.89 million worth of long-term equity awards to five of the Company’s senior
executives, with Robert D. Marcus, the Chairman and CEO, entitled to $37.9 million in addition to other payments.
We are unpersuaded by the argument that executives somehow “deserve” to receive unvested awards. To
accelerate the vesting of unearned equity on the theory that an executive was denied the opportunity to earn those
shares seems inconsistent with a “pay for performance” philosophy worthy of the name.
We do believe, however, that an affected executive should be eligible to receive an accelerated vesting of equity
awards on a pro rata basis as of his or her termination date, with the details of any pro rata award to be
determined by the Compensation Committee.
Other major corporations, including Apple, Chevron, ExxonMobil, IBM, Intel, Microsoft, and Occidental
Petroleum, have limitations on accelerated vesting of unearned equity, such as providing pro rata awards or
simply forfeiting unearned awards. Research from James Reda & Associates found that over one third of the
largest 200 companies now pro rate, forfeit, or only partially vest performance shares upon a change of control.
We urge you to vote FOR this proposal.
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