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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on May 15, 2017

No. 333-216894


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



Amendment No. 3
to

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



WideOpenWest, Inc.
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  4841
(Primary Standard Industrial
Classification Code Number)
  46-0552948
(I.R.S. Employer
Identification No.)

7887 East Belleview Avenue, Suite 1000
Englewood, Colorado 80111
(720) 479-3500

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



Craig Martin
General Counsel
7887 East Belleview Avenue, Suite 1000
Englewood, Colorado 80111
(720) 479-3500

(Name, address, including zip code, and telephone number, including area code, of agent for service)



With copies to:

Joshua N. Korff, P.C.
Brian Hecht
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
(212) 446-4800

 

Richard D. Truesdell, Jr.
Shane Tintle
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
(212) 450-4000



Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

           If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:     o

           If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

           If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

           If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

           Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer  o

 

Accelerated filer  o

 

Non-accelerated filer  ý
(Do not check if a
smaller reporting company)

 

Smaller reporting company  o
Emerging growth company  o

           If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.     o



CALCULATION OF REGISTRATION FEE

               
 
Title of Each Class of Securities
to be Registered

  Amount to be
Registered

  Estimated Maximum
Offering Price
Per Share

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee

 

Common Stock, $0.01 par value per share

  21,904,761(1)   $22.00(2)   $481,904,742   $55,852(3)

 

(1)
Includes the offering price of any additional shares of common stock that the underwriters have the option to purchase.

(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.

(3)
$11,590 previously paid.



            The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities nor a solicitation of an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated May 15, 2017

PRELIMINARY PROSPECTUS

19,047,619 Shares

LOGO

WideOpenWest, Inc.

Common Stock



        This is the initial public offering of shares of common stock of WideOpenWest, Inc. We are offering 19,047,619 shares of our common stock.

        Prior to this offering, there has been no public market for our common stock. The initial public offering price per share of our common stock is expected to be between $20.00 and $22.00. We have received approval to list our common stock on the New York Stock Exchange under the symbol "WOW." Upon completion of this offering, we expect to be a "controlled company" as defined under the corporate governance rules of the New York Stock Exchange.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.



         Investing in our common stock involves risks. See "Risk Factors" beginning on page 16.

       
 
 
  Per Share
  Total
 

Price to public

  $           $        
 

Underwriting discounts and commissions(1)

  $           $        
 

Proceeds, before expenses, to us

  $           $        

 

(1)
See also "Underwriting" for a description of underwriting compensation in connection with this offering.

        The underwriters have an option to purchase up to 2,857,142 additional shares from the selling stockholders named in this prospectus at the initial public offering price, less the underwriting discount. The underwriters can exercise this option at any time and from time to time within 30 days from the date of this prospectus.

        Delivery of the shares of common stock will be made on or about                  , 2017.



Joint Book-Running Managers

UBS Investment Bank   Credit Suisse

 

RBC Capital Markets   SunTrust Robinson Humphrey   Evercore ISI   Macquarie Capital

 

Co-Managers

LionTree   Raymond James

The date of this prospectus is                        , 2017.


    

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TABLE OF CONTENTS

 
  Page  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    16  

FORWARD-LOOKING STATEMENTS

    40  

USE OF PROCEEDS

    42  

DIVIDEND POLICY

    43  

CAPITALIZATION

    44  

DILUTION

    45  

SELECTED HISTORICAL COMBINED CONSOLIDATED FINANCIAL AND OTHER DATA

    47  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    50  

OUR BUSINESS

    85  

MANAGEMENT

    108  

EXECUTIVE COMPENSATION

    115  

PRINCIPAL STOCKHOLDERS

    135  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    137  

DESCRIPTION OF CERTAIN INDEBTEDNESS

    140  

DESCRIPTION OF CAPITAL STOCK

    142  

SHARES ELIGIBLE FOR FUTURE SALE

    146  

CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

    148  

UNDERWRITING

    152  

LEGAL MATTERS

    161  

EXPERTS

    161  

WHERE YOU CAN FIND MORE INFORMATION

    161  

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

    F-1  



         We have not and the selling stockholders and the underwriters have not authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We, the selling stockholders and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. We and the selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where such offers and sales are permitted. The information in this prospectus or any free writing prospectus is accurate only as of its date, regardless of its time of delivery or the time of any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.


MARKET, RANKING AND OTHER INDUSTRY DATA

        In this prospectus, we refer to information regarding market data obtained from internal sources, market research, publicly available information and industry publications. Estimates are inherently uncertain, involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus. We believe that these sources and estimates are reliable as of the date of this prospectus but have not independently verified them and cannot guarantee their accuracy or completeness.

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TRADEMARKS, SERVICE MARKS, TRADE NAMES AND COPYRIGHTS

        We do not own, either legally or beneficially, any trademarks, service marks or trade names in connection with the operation of our business. We own or have rights to copyrights that protect the content of our products. This prospectus may also contain trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this prospectus may be listed without the TM , SM , © and ® symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors, if any, to these trademarks, service marks, trade names and copyrights.


NON-GAAP FINANCIAL MEASURES

        We use certain financial measures in this prospectus such as Revenue Including Acquisitions and Dispositions, Adjusted EBITDA, Transaction Adjusted EBITDA, Transaction Adjusted Capital Expenditures and incremental contribution, which are not recognized under generally accepted accounting principles or "GAAP."

        Revenue Including Acquisitions and Dispositions is included in this prospectus because it is a key metric used by management and our Board of Directors to assess our financial performance. We define Revenue Including Acquisitions and Dispositions as revenue after giving effect to certain acquisitions and divestitures made by the Company. We believe that Revenue Including Acquisitions and Dispositions is an appropriate measure of operating performance because it is meaningful to investors by showing how certain acquisitions and divestitures might have affected the Company's historical financial statements.

        The presentation of Revenue Including Acquisitions and Dispositions is not made in accordance with GAAP and our use of the term Revenue Including Acquisitions and Dispositions in this prospectus varies from the use of similar terms by other companies in our industry due to different methods of calculation and is not necessarily comparable. Revenue Including Acquisitions and Dispositions should not be considered as an alternative to revenue or any other performance measures derived in accordance with GAAP as measures of operating performance.

        For a reconciliation of revenue to Revenue Including Acquisitions and Dispositions, see "Prospectus Summary—Summary Historical Combined Consolidated Financial Data."

        Adjusted EBITDA is included in this prospectus because it is a key metric used by management and our Board of Directors to assess our financial performance. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance, and that the presentation of this measure enhances an investor's understanding of our financial performance. Transaction Adjusted EBITDA makes certain additional adjustments to the historical financial information that the Company believes is meaningful to investors by showing how certain acquisitions and divestitures might have affected the Company's historical financial statements.

        We define Adjusted EBITDA as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), gains (losses) realized and unrealized on derivative instruments, management fees to related parties, the write up or write off of any asset, debt modification expenses, loss on extinguishment of debt, integration and restructuring expenses, all non-cash charges and expenses (including equity-based compensation expense) and certain other income and expenses, as further defined in our Senior Secured Credit Facilities (as defined herein). Transaction Adjusted EBITDA represents Adjusted EBITDA after giving effect to the impact of acquisitions and dispositions that were completed during the relevant periods as if they occurred at the beginning of the period presented.

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        The presentation of Adjusted EBITDA and Transaction Adjusted EBITDA is not made in accordance with GAAP and our use of the terms Adjusted EBITDA and Transaction Adjusted EBITDA in this prospectus varies from the use of similar terms by other companies in our industry due to different methods of calculation and are not necessarily comparable. Adjusted EBITDA and Transaction Adjusted EBITDA should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP as measures of operating performance.

        Adjusted EBITDA and Transaction Adjusted EBITDA have important limitations as analytical tools and you should not consider them in isolation or as substitutes for the analysis of our results as reported under GAAP. For example, Adjusted EBITDA and Transaction Adjusted EBITDA:

        For a reconciliation of net income (loss) to Adjusted EBITDA and Transaction Adjusted EBITDA, see "Prospectus Summary—Summary Historical Combined Consolidated Financial Data."

        Transaction Adjusted Capital Expenditures is included in this prospectus because it is a key metric used by management and our Board of Directors to assess our financial performance. We define Transaction Adjusted Capital Expenditures as capital expenditures after giving effect to certain acquisitions and divestitures made by the Company. We believe that Transaction Adjusted Capital Expenditures is an appropriate measure of operating performance because it is meaningful to investors by showing how certain acquisitions and divestitures might have affected the Company's historical financial statements.

        The presentation of Transaction Adjusted Capital Expenditures is not made in accordance with GAAP and our use of the term Transaction Adjusted Capital Expenditures in this prospectus varies from the use of similar terms by other companies in our industry due to different methods of calculation and is not necessarily comparable. Transaction Adjusted Capital Expenditures should not be considered as an alternative to capital expenditures or any other performance measures derived in accordance with GAAP as measures of operating performance.

        For a reconciliation of capital expenditures to Transaction Adjusted Capital Expenditures, see "Prospectus Summary—Summary Historical Combined Consolidated Financial Data."

        Incremental contribution is included herein because we believe that it is a key metric used by our management to assess the financial performance of the business by showing how the relative relationship of the various components of subscription services contributes to our overall consolidated historical results. We define incremental contribution as the components of subscription revenue, less costs directly incurred from third parties in connection with the provision of such services to our customers.

        Incremental contribution is not made in accordance with GAAP and our use of the term incremental contribution varies from others in our industry. Incremental contribution has important

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limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP as it does not identify or allocate any other operating costs and expenses that are components of our Income from Operations to specific subscription revenues as we do not measure or record such costs and expenses in a manner that would allow attribution to a specific component of subscription revenue. Accordingly, incremental contribution should not be considered as an alternative to operating income or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows, or as measures of liquidity.

        For a reconciliation of incremental contribution to Income from Operations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations."

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PROSPECTUS SUMMARY

         The following summary highlights information appearing elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully. In particular, you should read the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and the notes relating to those statements included elsewhere in this prospectus. Some of the statements in this prospectus constitute forward-looking statements. See "Forward-Looking Statements."

         In this prospectus, unless the context requires otherwise, "we," "us," "our," "WOW!" and the "Company" refer to WideOpenWest, Inc. and its consolidated subsidiaries. "Parent" refers to WideOpenWest Holdings, LLC, our indirect parent company.

         All statistical and operating information in this section gives effect to the acquisitions of Bluemile, Anne Arundel Broadband and NuLink and the divestitures of the South Dakota systems and Lawrence, Kansas system, except as otherwise noted. For additional detail on these transactions, see "—Summary Historical Combined Consolidated Financial Data."


Our Business

Overview

        We are the sixth largest cable operator in the United States ranked by number of customers as of December 31, 2016. We provide high-speed data ("HSD"), cable television ("Video"), Voice over IP-based telephony ("Telephony") and business-class services to a service area that includes approximately 3.0 million homes and businesses. Our services are delivered across 19 markets via our advanced hybrid fiber-coaxial ("HFC") cable network. Our footprint covers over 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee. Led by our robust HSD offering, our products are available either as a bundle or as an individual service to residential and business services customers. As of March 31, 2017, 780,100 customers subscribed to our services.

        We believe we have one of the most technologically advanced, fiber-rich networks in our service areas, with approximately 11,500 route miles of intra- and inter-market fiber and approximately 33,500 miles of coaxial cable. We have designed our network with the goal of maximizing Internet speeds and accommodating future broadband demand. Our all-digital HFC infrastructure operates with a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable to 1.2 Ghz throughout. All of our new communities are built with a capacity of 1.2 Ghz. Our HFC network is fully upgraded with Data Over Cable Service Interface Specification ("DOCSIS") 3.0 and is capable of being upgraded to DOCSIS 3.1 in all of our markets. According to CableLabs, a non-profit innovation and research and development lab founded by members of the cable industry, DOCSIS 3.1 technology has the capacity to support network speeds up to 10 Gbps downstream and up to 1 Gbps upstream. We serve an average of 310 homes per distribution point, which are also referred to as nodes, enabling us to deliver quality HSD service and the capability to provide broadband speeds of 1 Gbps and higher. Our HFC network consists of a high-bandwidth, multi-use service provider backbone, which allows us to centrally source data, voice and video services for both residential and business traffic. We believe the quality and uniform architecture of our next-generation network is a competitive advantage that enables us to offer high-quality broadband services that meet our current and future customers' needs without incurring significant upgrade capital expenditures.

        We operate primarily in economically stable suburbs that are adjacent to large metropolitan areas as well as secondary and tertiary markets, which we believe have favorable competitive and demographic profiles and include businesses operating across a range of industries. We benefit from the ability to augment our footprint by pursuing value-accretive network extensions ("edge-outs") to

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increase our addressable market and grow our customer base. We have historically made selective capital investments in edge-outs to facilitate growth in residential and business services. Additionally, we provide a range of services to small, medium and large businesses within our footprint, and we believe we have the opportunity to grow our business services market share with our robust product suite.

Attractive Markets with Favorable Competitive Dynamics

GRAPHIC


Note: "RGUs" represent Revenue Generating Units.

        We are focused on efficient capital spending and maximizing Adjusted EBITDA through an Internet-centric growth strategy while maintaining a profitable video subscriber base. Based on its per subscriber economics, we believe that HSD represents the greatest opportunity to drive increased profitability across our residential and business markets. According to Cisco, North America has experienced significant growth in bandwidth usage in recent years, driven primarily by (i) over-the-top video ("OTT") viewership trends, (ii) a proliferation of connected devices, and (iii) increased customer demand for high-bandwidth business applications, including cloud computing. We believe our superior network infrastructure provides an efficient, scalable platform to meet our current and future customers' needs and deliver services as demand for bandwidth continues to increase. Data compiled by Kagan demonstrates that cable operators have enjoyed an increasing share of new broadband subscribers since 2010, while telephone companies have seen their share of these customers decline year over year. Also based on data compiled by Kagan, from the quarter ended June 30, 2015 through the quarter ended September 30, 2016, the cable industry has captured in excess of a 95% share of wired broadband net subscriber growth in each quarter. We believe the cable industry's net broadband share growth is indicative of a superior product offering relative to other HSD technologies, such as the digital subscriber line ("DSL") network architecture often utilized in whole or in part by telephone companies.

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Our History

        Since commencing operations in 2001, our focus has been to offer a competitive alternative cable service and establish a brand with a strong market position. We have scaled our business through (i) organic subscriber growth and increased penetration within our existing markets and footprint, (ii) edge-outs to grow our footprint, (iii) upgrades to introduce enhanced broadband services to networks we have acquired, (iv) entry into business services, with a broad range of HSD, Video and Telephony products, and (v) acquisitions and integration of cable systems.

WOW!'s Evolution Over Time

GRAPHIC

        After a period of strong growth from 2001 through 2011, we shifted our focus to integrating our acquisitions and strengthening our product offering. Debt service costs associated with the Knology acquisition and capital expenditures necessary for network priorities and integration limited further investment in edge-outs and other growth opportunities through 2015. Through organic growth, normalization of capital expenditures, de-levering and interest cost reduction, we have increased free cash flow generation and renewed our focus on edge-outs and business services. As a result of a stronger balance sheet, we believe we are better positioned to accelerate our growth investments in a meaningful way going forward. The investments we have made in our platform have resulted in overall customer and HSD subscriber growth for the year ended December 31, 2016.

Our Strengths

        We believe the following core competitive strengths enable us to differentiate ourselves:

    Technologically Advanced Platform that Underpins our Competitive Advantage

        Our all-digital, fiber-rich HFC network has a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable throughout the network to 1.2 Ghz to accommodate future broadband demand. The infrastructure is currently operating on DOCSIS 3.0, is capable of being upgraded to DOCSIS 3.1 and serves approximately 310 homes per node. We offer HSD speeds up to 500 Mbps in 94% of our footprint with the capability to offer 1 Gbps or more in all of our markets. In the fourth quarter of 2016, we launched a 1 Gbps offering in four of our markets, with additional market launches planned for 2017 in our edge-out communities. Over the twelve months ended February 28, 2017, our average monthly Internet speed ranking was second out of 62 cable, fiber, DSL, wireless and satellite Internet service providers, or ISPs, according to Netflix's USA ISP Speed Index.

        We offer a full suite of digital video services, including video-on-demand ("VOD"), high-definition video and digital video recording ("DVR"). In approximately 79% of our footprint, we also offer our "Ultra" video product, which is a technologically advanced, Internet protocol ("IP") enabled, whole-home DVR solution that integrates traditional linear video, an advanced user interface and direct access to OTT content, such as Netflix and other applications.

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        Our technologically advanced network enables us to provide business services customers with a broad portfolio of carrier-class data and voice services, including Direct Internet Access, Ethernet over fiber and HFC, virtual private networks, Hosted Voice over Internet Protocol ("VoIP") solutions, wholesale fiber connectivity, cell backhaul solutions, disaster recovery, cloud back-up and Session Initiated Protocol ("SIP") and Primary Rate Interface ("PRI") trunking services. Our advanced business services product offering continues to evolve, as we leverage our investment in next generation software enabled infrastructure to launch new services such as a full suite of managed and other virtual services.

        We expect future network-related capital expenditures to be generally stable. We believe that our flexible network architecture will allow us to meet our current and future customers' needs without incurring significant upgrade capital expenditures.

    Value-Accretive Edge-Outs

        We have a proven track record of successful edge-outs. Through network extensions to adjacent communities and increased customer penetration levels over time within these communities, we have increased the number of residential and business services customers that we serve. For the year ended December 31, 2016, we added approximately 8,900 customers from our edge-outs activated in 2016. We have experienced success in this strategy by targeting communities that we believe possess attractive demographic and competitive profiles, making capital-efficient decisions and leveraging our existing operating infrastructure. We have identified a large number of communities near our footprint for edge-out expansion, and believe edge-out expansion has a self-perpetuating effect as each community adjacent to a new edge-out investment presents further expansion opportunities.

        Between 2008 and 2012, we extended our network to over 100,000 new homes passed through edge-outs. During 2016, we expanded our network footprint by approximately 38,000 homes passed in five markets and achieved average customer penetration levels of 23% over an average activation period of 157 days as of December 31, 2016. The edge-outs that we activated in 2016 are continuing to experience net additions, and we expect an increase in penetration levels as they reach full maturity. We continue to selectively evaluate and invest in edge-out opportunities within our markets and believe we are well-positioned based on our historical track record of success in edge-out expansion.

    Business Services Capabilities

        We offer integrated solutions for businesses, including Direct Internet Access, Ethernet over fiber and HFC, hosted and on-premise VoIP solutions, metro Ethernet services, wholesale fiber connectivity, cell backhaul solutions and SIP and PRI trunking services. Recognizing the opportunity in our markets, we have built the necessary infrastructure, processes and sales and support organizations to scale our business services offering. Supported by our robust network, we have developed a full suite of products for small, medium and large businesses within our footprint, including enhanced telephony services and data speeds of up to 10 Gbps. We have built a consistent sales practice across our business services organization while ensuring product competitiveness and local knowledge to drive market share gain. We utilize multiple distribution channels, including direct sales, wholesale and indirect sales to capture opportunities across a variety of customer segments. Additional products within our portfolio include virtual private networks, a complete line of colocation infrastructure, cloud computing, managed backup and disaster recovery services.

        We have also made significant investments in our fiber network in the Chicago area. Since 2014, we have constructed approximately 1,200 miles of fiber in this market, providing connectivity to more than 500 macro and small cell sites as part of a fiber construction project for a leading wireless carrier. While a meaningful portion of the fiber network in this area is under a long-term contract to this carrier, there is significant capacity on the network that we expect will support future growth. As a result, we believe there is considerable embedded value in this asset.

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        Strong execution has supported our business services expansion to date and will enable us to execute on our growth strategy. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015.

    Attractive Geographic Footprint and Favorable Competitive Dynamics

        Our customers are located primarily in economically stable suburbs adjacent to large metropolitan areas, as well as secondary and tertiary markets, in the Midwest and Southeast United States. Our typical market possesses what we believe to be an advantageous mix of size and geographical position with favorable competitive dynamics and demographics, and includes a number of businesses operating across a range of industries. We believe our network footprint insulates us from heightened competition typical of major metropolitan centers. In addition, the diversity of WOW!'s geographic footprint enables us to mitigate the impact of economic downturns our business could face in a particular region.

        Within our geographical areas, we believe we are typically one of the top two providers of HSD and Video services. We have a proven track record of winning customers from other operators by providing superior HSD product offerings, focusing on local marketing efforts, offering competitive pricing and delivering strong customer service while leveraging our advanced network.

        Based on homes passed, we estimate approximately 53% and 39% of our footprint overlaps with Comcast Corp. and Charter, respectively. We estimate systems formerly owned by Time Warner Cable and Bright House Networks (recently acquired by Charter) overlap with approximately 33% of our homes passed. We believe competitive dynamics with telephone companies are favorable in our markets. We estimate that AT&T Corp's U-verse offering is available in approximately 63% of our footprint based on homes passed. We believe competitive dynamics with AT&T U-verse are favorable for WOW!, as AT&T U-verse's network architecture is a mix of fiber and DSL in several markets. Competition from Verizon FiOS and Frontier Communications is estimated to be 3.5% and 2.7% of our overall footprint, respectively.

    Strong Financial Performance Benefiting from the Mix Shift to HSD

        Our margin profile is driven by an increase in HSD revenues, which benefit from incremental contribution margins in excess of 95%, and our focus on preserving the profitability of our Video customers, which has resulted in increases in Video average revenue per user ("ARPU"). For the year ended December 31, 2016, HSD revenues represented approximately 30.2% of our total revenues and 45.4% of our incremental contribution. In comparison, Video represented 44.2% of our total revenues and 23.9% of our incremental contribution over the same period. High content costs associated with the distribution of Video services are the key driver of the increasing divergence in profitability of HSD and Video. As a result of our continued customer mix shifting to HSD, we believe we will benefit from higher free cash flow conversion and margin expansion because HSD requires lower capital expenditures and operating expenses relative to Video.

        For the year ended December 31, 2016, we generated Revenue of $1,237.0 million, which represented a reduction of $27.3 million over the year ended December 31, 2014. The Company completed certain key acquisitions and divestitures during the two-year period ended December 31, 2016 which impacted reported Revenues. For the year ended December 31, 2016, we generated approximately $1,208.4 million of Revenue Including Acquisitions and Dispositions, which represented an increase of $22.1 million, or 0.9%, on an annualized basis over the year ended December 31, 2014. See "—Summary Historical Combined Consolidated Financial Data" for a reconciliation of Revenue to Revenue Including Acquisitions and Dispositions.

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        For the year ended December 31, 2016, we generated net income of $26.3 million, which represented a $53.6 million improvement over the year ended December 31, 2014, and approximately $445.7 million of Transaction Adjusted EBITDA, which represented an increase of $47.2 million, or 5.8%, on an annualized basis over the year ended December 31, 2014. See "—Summary Historical Combined Consolidated Financial Data" for a reconciliation of net income (loss) to Transaction Adjusted EBITDA.

    Operating Philosophy Founded on a Superior Customer Experience

        We compete strategically by adhering to our operating philosophy, which is: "To deliver an employee and customer experience that lives up to our name." The ongoing pursuit of this philosophy has a strong foundation in the WOW! culture that has been cultivated over time and focuses our organization on four core values: (i) respect: treat others as you wish to be treated; (ii) integrity: choose to do what is right; (iii) servanthood: embracing the attitude and honor of serving others rather than being served; and (iv) ownership: act with thought and a focus on the collective good.

        We believe that servanthood in particular is unique to WOW! and exemplifies our commitment to the customer experience—that "how" we treat our customers is just as important as "what" we provide them and ultimately is how we earn customer loyalty. This mindset is what drives our operating philosophy and we believe compels employees and customers alike to choose WOW!.

    Strong and Experienced Management Team

        Our management team is comprised of senior executives who have significant experience in the telecommunications industry, with an average tenure of seven years with the Company and approximately 24 years of relevant industry experience. Our management team has collaborated to establish WOW!'s unique culture and execute on the Company's operating philosophy and commitment to the customer experience. The team's track record of success has translated into numerous independent awards and recognitions. We have been (i) ranked highest in customer satisfaction by J.D. Power and Associates 21 times in the last twelve years, (ii) rated highest by Consumer Reports fifteen times in the last eight years, and (iii) recognized by PC Magazine with the Reader's Choice Award five times in the last six years. Our management team has substantial experience in deploying new products and services and has successfully guided WOW! through various business cycles. In addition, our management team has considerable experience in successfully identifying and completing edge-outs and acquiring and integrating cable assets.

Our Strategy

        The key components of our strategy are as follows:

    Focus on Highly Profitable Internet-Centric Products

        Driven by the increased Internet needs of our customers, we believe we will continue to experience strong demand for HSD services within our markets. The growth of bandwidth-intensive applications, such as mobile and social media applications, OTT video and cloud-based computing, and the proliferation of connected devices, are expected to continue to drive rapidly-increasing consumption of data. We intend to capitalize on these favorable industry trends by continuing to focus on HSD customer growth via increased penetration, driving a greater mix shift toward higher-margin HSD and business services products and transitioning customers to higher-priced HSD speed tiers. While we will continue to provide a robust Video product to satisfy the needs of our bundled customers, our strategy is to maintain profitability by increasing Video pricing in the face of rising content costs. For customers who value the Video product, our marketing approach is to drive adoption of HSD-centric bundles.

        The growth of our HSD business is driven by our ability to offer a range of speeds, packaged and bundled at a competitive value and provisioned to deliver a consistent and high-quality experience. We

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provide market-leading speed tiers of 10 Mbps, 100 Mbps, 500 Mbps and 1 Gbps. This "good, better, best" approach provides competitive speed and price-value differentiation while simplifying the overall customer value proposition. Our fiber-rich HFC network is fully DOCSIS 3.1-capable, allowing us to remain highly competitive as our customers' bandwidth needs evolve. In addition, we believe that new product development of HSD-adjacent services provides an opportunity for additional growth. Our existing infrastructure enables us to drive new product development initiatives, which could include home security, home automation and other Internet of Things services in the future.

    Accelerate Investment in Highly Accretive Network Edge-Out Builds

        We believe edge-outs are an attractive investment opportunity available to WOW!. We have a track record of successfully identifying and expanding our network in a cost-effective manner to new communities and acquiring residential and business services customers. We believe that capital expenditures and operating costs for edge-outs are inherently lower relative to a new greenfield build because we are able to leverage our existing infrastructure and operating platforms to extend our network to communities adjacent to and near our existing footprint. Management evaluates potential edge-out opportunities based on the expected average acquired customer's annual Adjusted EBITDA contribution from such projects relative to the anticipated required capital expenditures. An edge-out project generally consists of a construction phase of twelve months or less, during which we incur capital expenditures. As the edge-out project is completed and we begin providing services to customers, we generally increase customer penetration and the average investment per acquired customer declines. Based on edge-outs activated in 2016 and customer penetration through December 31, 2016, our average capital expenditures per acquired customer represent a mid-single digit multiple of our average customer's annual Adjusted EBITDA contribution. As our edge-outs mature, penetration generally increases over time, and as a result, we expect this multiple to decrease.

        We continue to evaluate new opportunities for edge-outs to increase our residential and business footprint. Edge-outs are expected to add approximately 72,000 homes passed in 2017, and we have identified additional edge-out opportunities that we expect will be prioritized and built over the next several years. We believe that the overall edge-out opportunity within our network extends beyond what we have identified and will continue to expand as we gain access to new adjacent communities.

    Drive Growth in Business Services Market Opportunity

        We believe that business services represent a substantial growth area for WOW! and we have made significant investments in our network and product capabilities to address these opportunities. We believe that we have a significant market penetration growth opportunity in several of our markets, including those in the Midwest and Florida, and that our advanced network positions us to capitalize on the substantial business services opportunity within our footprint. We believe we have developed the product suite and sales expertise to continue to gain share with the small, medium and large businesses we target within our footprint. We estimate there is an approximately $1.3 billion addressable revenue opportunity across our markets. We believe that a substantial part of our target customer base is served by legacy DSL technologies, creating a clear competitive advantage and market opportunity for our HFC-based cable HSD services. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015. We design our networks with additional capacity so that increased bandwidth can be deployed economically and efficiently, allowing us to address our current and future customers' demand. We believe that our robust, customer-centric solutions, experienced sales organization and strong product capabilities have supported our expansion in the business services market and will help us execute on our growth strategy.

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    Accelerate Free Cash Flow Generation

        We believe we will achieve accelerating free cash flow generation, which will allow us to continue to pursue enhanced, disciplined levels of investment in our edge-out and business services investment opportunities. We expect growth in income from operations and Adjusted EBITDA to exceed revenue growth over time, benefiting from the mix shift to HSD, the transition of customers to higher-priced HSD speed tiers and the management of Video customer profitability. We also expect the mix shift to drive a reduction in our capital expenditures relative to our revenues over time. We expect our near-term federal corporate income tax payments to be minimal given our federal net operating loss ("NOL") balance of $833.8 million as of December 31, 2016. See "Risk Factors—Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations."

    Continue Identifying and Successfully Integrating Acquisitions

        We expect to evaluate and pursue opportunistic tuck-in acquisitions. We have acquired six cable companies since 2006. We believe that we have consistently demonstrated an ability to acquire and integrate companies, realize cost synergies and increase the profitability of these businesses post-close. We have pursued these acquisitions for a variety of reasons including: (i) geographic diversity and increased scale; (ii) expansion of WOW!'s network through tuck-ins of smaller adjacent systems; (iii) value creation via upgrading and streamlining undermanaged systems; (iv) enhancement of our business services capabilities; and (v) cost rationalization.

        For example, our acquisition of Sigecom, LLC ("Sigecom") in 2006 (i) expanded WOW!'s footprint into the Evansville, Indiana market, (ii) increased WOW!'s business services presence, and (iii) generated significant cost savings by leveraging Sigecom's infrastructure and expertise, which provided an in-house telephony switch solution throughout our network. Our acquisition of Knology, Inc. ("Knology") in 2012 provided incremental scale, geographic and competitive diversification and allowed us to consolidate a clustered footprint in the Midwest and Southeast. Most recently, our acquisition of HC Cable Opco, LLC d/b/a NuLink ("NuLink") added approximately 34,000 homes and businesses near WOW!'s existing Georgia footprint, with attractive demographics and meaningful edge-out and business services opportunities given its proximity to Atlanta.

        We believe our acquisition track record provides us with an advantage in future consolidation opportunities. We will continue to evaluate and pursue future acquisition opportunities based on the quality of underlying assets, fit within our existing business, opportunity to expand our network and the ability to create value through the realization of cost efficiencies.

    Operating Philosophy Driving Differentiation in Customer Experience

        Our philosophy is to deliver an employee and customer experience that is consistent with the WOW! name. We are a company comprised of people who derive satisfaction from taking care of each other and our customers. As a result, there is heightened awareness and understanding among our team that it is our employees who ultimately are WOW!'s greatest strategic asset. Our approximately 3,000 employees are brand ambassadors across the communities we serve.

        Our purposeful focus on creating a thriving WOW! culture is all for the benefit of our customers. We have established an enduring record of delivering award-winning customer service and satisfaction. Recognition by a variety of independent third parties, including J.D. Power and Associates, Consumer Reports and PC Magazine, has helped create a winning, competitive spirit amongst employees that drives our success.

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Summary Risk Factors

        Our business is subject to numerous risks described in the section entitled "Risk Factors" and elsewhere in this prospectus. You should carefully consider these risks before making an investment. Some of these risks include:

    the wide range of competition we face;

    the relative size and resources of our competitors;

    the impact of advancing technology on the leisure and entertainment time of audiences;

    whether our "edge-out" strategy will succeed;

    the likelihood of prolonged economic downturns, especially any downturns in the housing market, and their effect on our ability to attract new subscribers;

    the volatility of our stock price; and

    the lack of an existing market for our common stock and the uncertainty that such a market will develop.


New Revolving Credit Facility

        On May 8, 2017, we entered into a Commitment Letter for a new 5-year revolving credit facility of up to $300 million (the "New Revolving Credit Facility") to replace our existing $200 million revolving credit facility. The New Revolving Credit Facility is expected to be entered into substantially concurrently with the consummation of this offering, subject to receipt by us of gross proceeds from this offering of at least $310 million and the satisfaction of other customary closing conditions. At such time, $200 million of revolving commitments under the New Revolving Credit Facility will be immediately available to us, while the remaining $100 million of revolving commitments will only become available to us upon compliance with certain other conditions. Loans under the New Revolving Credit Facility will bear interest, at our option, at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. The guarantees, collateral and covenants in the New Revolving Credit Facility will be the same as those contained in our existing revolving credit facility.


Distribution and Corporate Structure

        Prior to the closing of this offering, we will effect a 67,274.092-for-1 stock split (the "Stock Split") and our indirect parent company, WideOpenWest Holdings, LLC, will distribute the shares of our common stock that it holds (indirectly through Racecar Acquisition LLC) to its equity holders based on their relative rights under its limited liability company agreement (the "Distribution"), with no issuance of additional shares by us. Each holder of units of WideOpenWest Holdings, LLC will receive shares of our common stock in the distribution, subject to the terms of any applicable grant or other agreement. For additional information regarding the treatment of outstanding units in WideOpenWest Holdings, LLC in connection with the distribution and this offering, see "Executive Compensation—Effect of the Distribution and this Offering."

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        The diagram below reflects our organizational structure following the offering.

GRAPHIC


Our Corporate Information

        Our business commenced operations in 2001. WideOpenWest, Inc. was founded in 2012 as WideOpenWest Kite, Inc. and is a Delaware corporation. WideOpenWest Kite, Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017. WOW!'s principal executive offices are located at 7887 East Belleview Avenue, Suite 1000, Englewood, Colorado 80111. Our telephone number is (720) 479-3500. Our website can be found on the Internet at www.wowway.com.

         The information contained on WOW!'s website or that can be accessed through the website is not part of this prospectus and you should not rely on that information when making a decision whether to invest in our common stock.


Equity Sponsors

        Avista Capital Partners ("Avista") is a leading New York-based private equity firm with approximately $5 billion under management. Founded in 2005, Avista makes control investments in growth-oriented healthcare and communications businesses. Through its team of seasoned investment professionals and industry experts, Avista seeks to partner with exceptional management teams to invest in and add value to well-positioned businesses.

        Founded in 2004, Crestview Partners ("Crestview" and together with Avista, the "Sponsors") is a value-oriented private equity firm focused on the middle market. The firm is based in New York and manages funds with over $7 billion of aggregate capital commitments. The firm is led by a group of partners who have complementary experience and distinguished backgrounds in private equity, finance, operations and management. Crestview's senior investment professionals primarily focus on sourcing and managing investments in each of the specialty areas of the firm: media, energy, financial services and industrials.

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The Offering

Issuer

  WideOpenWest, Inc.

Common stock offered by us

 

19,047,619 shares.

Underwriters' option to purchase additional shares

 

The selling stockholders named in this prospectus have granted the underwriters a 30-day option to purchase up to an additional 2,857,142 shares at the public offering price less underwriting discounts and commissions.

Common stock to be outstanding immediately after completion of this offering

 

Immediately following the consummation of this offering, we will have 86,321,711 shares of common stock outstanding.

Use of proceeds

 

We estimate that the net proceeds to us from this offering, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, will be approximately $373.5 million, assuming the shares offered by us are sold for $21.00 per share, the midpoint of the price range set forth on the cover of this prospectus.

 

We will not receive any proceeds from the sale of shares by the selling stockholders in connection with the exercise of the underwriters' option to purchase additional shares.

 

We intend to use the net proceeds from this offering to redeem a portion of our 10.25% Senior Notes due 2019, for general corporate purposes and to pay fees and expenses related to this offering. For additional information, see "Use of Proceeds."

Principal stockholders

 

Upon completion of this offering, the Sponsors will beneficially own a controlling interest in us. We currently intend to avail ourselves of the "controlled company" exemption under the corporate governance rules of the New York Stock Exchange.

Dividend policy

 

We currently expect to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness; therefore, we do not anticipate paying any cash dividends in the foreseeable future. For additional information, see "Dividend Policy."

Proposed symbol for trading on                    

 

"WOW"

Risk factors

 

For a discussion of risks relating to the Company, our business and an investment in our common stock, see "Risk Factors" and all other information set forth in this prospectus before investing in our common stock.

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        Unless otherwise indicated, all information in this prospectus relating to the number of shares of common stock to be outstanding immediately after this offering:

    assumes the effectiveness of our amended and restated certificate of incorporation and amended and restated bylaws, which we will adopt prior to the completion of this offering;

    is based on the number of shares outstanding after giving effect to the Stock Split and the Distribution;

    includes 122,237 shares of restricted common stock expected to be granted under our 2017 Omnibus Incentive Plan (based on the midpoint of the price range set forth on the cover of this prospectus) in connection with this offering;

    excludes additional shares of restricted common stock to be granted under our 2017 Omnibus Incentive Plan anticipated to represent between 1.0% and 2.0% of our total common stock outstanding, expected to be issued following this offering, solely at the discretion of our board of directors;

    excludes 6,474,128 shares of our common stock reserved for future grants under our 2017 Plan (as defined below); and

    assumes (i) no exercise by the underwriters of their option to purchase up to 2,857,142 additional shares from the selling stockholders and (ii) an initial public offering price of $21.00 per share, the midpoint of the price range set forth on the cover of this prospectus.

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Summary Historical Combined Consolidated Financial Data

        The following tables present a summary of our historical combined consolidated financial data at the dates and for the periods indicated. We derived the following summary historical combined consolidated financial data for the years ended December 31, 2014, 2015 and 2016 and as of December 31, 2015 and 2016 from our audited combined consolidated financial statements included elsewhere in this prospectus. The balance sheet data as of December 31, 2014 is derived from our audited combined consolidated financial statements for the year ended December 31, 2014 not included in this prospectus. We derived the following summary historical combined condensed consolidated financial data for the three months ended March 31, 2016 and 2017 from our unaudited combined condensed consolidated financial statements included elsewhere in this prospectus. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2017. Our historical operating results are not necessarily indicative of future operating results.

        You should read this data in conjunction with, and it is qualified by reference to, the sections entitled "Selected Historical Combined Consolidated Financial and Other Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our combined consolidated financial statements and related notes appearing elsewhere in this prospectus.

 
  Year Ended December 31,   Three Months
Ended
March 31,
 
(in millions)
  2014   2015   2016   2016   2017  

Statement of Operations Data:

                               

Revenue

  $ 1,264.3   $ 1,217.1   $ 1,237.0   $ 302.3   $ 300.0  

Costs and expenses:

                               

Operating (excluding depreciation and amortization)

    737.0     678.6     668.3     164.5     159.8  

Selling, general and administrative

    135.8     110.6     116.4     26.0     30.3  

Depreciation and amortization

    251.3     221.1     207.0     52.5     50.3  

Management fee to related party

    1.7     1.9     1.7     0.4     0.5  

    1,125.8     1,012.2     993.4     243.4     240.9  

Income from operations

    138.5     204.9     243.6     58.9     59.1  

Other income (expense):

                               

Interest expense

    (237.0 )   (226.0 )   (211.1 )   (54.2 )   (45.7 )

Realized and unrealized gain on derivative instruments, net              

    4.1     5.6     2.3     1.1      

Gain on sale of assets

    52.9                 38.7  

Loss on early extinguishment of debt

        (22.9 )   (38.0 )       (5.0 )

Other income (expense), net

    3.4     (0.4 )   2.2         1.4  

Income (loss) before provision for income tax

    (38.1 )   (38.8 )   (1.0 )   5.8     48.5  

Income tax benefit (expense), net

    10.8     (9.9 )   27.3     (1.5 )   23.9  

Net income (loss)

  $ (27.3 ) $ (48.7 ) $ 26.3   $ 4.3   $ 72.4  

Balance Sheet Data:

                               

Total assets

  $ 2,874.7   $ 2,684.7   $ 2,770.8   $ 2,672.6   $ 2,661.6  

Total debt, including capital lease obligations

  $ 3,019.3   $ 2,882.2   $ 2,871.2   $ 2,879.3   $ 2,761.5  

Total liabilities

  $ 3,690.9   $ 3,550.7   $ 3,488.8   $ 3,510.5   $ 3,306.8  

Other Financial Data:

   
 
   
 
   
 
   
 
   
 
 

Revenue Including Acquisitions and Dispositions(1)

  $ 1,186.3   $ 1,195.4   $ 1,208.4   $ 297.0   $ 298.5  

Capital expenditures

  $ 251.9   $ 231.9   $ 287.5   $ 63.6   $ 79.2  

Transaction Adjusted Capital Expenditures(1)

  $ 244.1   $ 229.2   $ 285.6   $ 63.5   $ 79.1  

Adjusted EBITDA(1)

  $ 438.1   $ 443.9   $ 463.6   $ 112.9   $ 112.3  

Transaction Adjusted EBITDA(1)

  $ 398.5   $ 429.1   $ 445.7   $ 109.0   $ 111.3  

Other Data(2): (in thousands)

   
 
   
 
   
 
   
 
   
 
 

Homes passed

    2,985.0     3,003.1     3,094.3     3,010.7     3,047.8  

Total customers(3)

    809.1     777.8     803.4     784.6     780.1  

                               

HSD RGUs

    727.8     712.5     747.4     722.2     729.0  

Video RGUs

    634.7     547.5     501.4     537.2     474.0  

Telephony RGUs

    359.4     296.8     258.1     286.6     243.0  

Total RGUs

    1,721.9     1,556.8     1,506.9     1,546.0     1,446.0  

(1)
Since 2014, the Company has completed certain key acquisitions and divestitures. These transactions do not constitute a significant business combination for which a balance sheet is required by Regulation S-X or a disposition of a significant portion of a business. However, the

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    Company presents certain financial data that gives effect to the impact of acquisitions and dispositions that were completed during the relevant periods as if they occurred at the beginning of the period presented.

    The following table shows a reconciliation of Revenue to Revenue Including Acquisitions and Dispositions:

 
  Year Ended December 31,   Three Months
Ended
March 31,
 
(in millions)
  2014   2015   2016   2016   2017  

Revenue

  $ 1,264.3   $ 1,217.1   $ 1,237.0   $ 302.3   $ 300.0  

Revenue related to NuLink(a)

    23.2     24.7     17.1     6.2      

Revenue related to AAB(b)              

    7.1                  

Revenue related to the South Dakota systems(c)

    (62.5 )                

Revenue related to the Lawrence system(d)

    (45.8 )   (46.4 )   (45.7 )   (11.5 )   (1.5 )

Revenue Including Acquisitions and Dispositions

  $ 1,186.3   $ 1,195.4   $ 1,208.4   $ 297.0   $ 298.5  

    We define Adjusted EBITDA as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), gains (losses) realized and unrealized gain on derivative instruments, management fees to related party, the write up or write off of any asset, debt modification expenses, loss on early extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including equity based compensation expense) and certain other income and expenses, as further defined in our Senior Secured Credit Facilities. Transaction Adjusted EBITDA represents Adjusted EBITDA after giving effect to the impact of acquisitions and dispositions that were completed during the relevant periods as if they occurred at the beginning of the period presented. The following table shows a reconciliation of GAAP net income (loss) to Adjusted EBITDA and Transaction Adjusted EBITDA:

 
  Year Ended December 31,   Three Months
Ended
March 31,
 
(in millions)
  2014   2015   2016   2016   2017  

Net income (loss)

  $ (27.3 ) $ (48.7 ) $ 26.3   $ 4.3   $ 72.4  

Depreciation & amortization

    251.3     221.1     207.0     52.5     50.3  

Management fee to related party

    1.7     1.9     1.7     0.4     0.5  

Interest expense

    237.0     226.0     211.1     54.2     45.7  

Realized and unrealized (gain) loss on derivative instruments

    (4.1 )   (5.6 )   (2.3 )   (1.1 )    

Loss on early extinguishment of debt

        22.9     38.0         5.0  

(Gain) on sale of assets

    (52.9 )               (38.7 )

Non-recurring professional fees, M&A integration and restructuring expense

    46.6     16.0     10.2     1.1     1.9  

Non-cash compensation

            1.1         0.5  

Other (income) expense, net

    (3.4 )   0.4     (2.2 )       (1.4 )

Income tax (benefit) expense

    (10.8 )   9.9     (27.3 )   1.5     (23.9 )

Adjusted EBITDA

  $ 438.1   $ 443.9   $ 463.6   $ 112.9   $ 112.3  

Adjusted EBITDA related to NuLink(a)

    7.8     8.4     5.8     2.0      

Adjusted EBITDA related to AAB(b)

    1.0                  

Adjusted EBITDA related to the South Dakota systems(c)

    (26.8 )                

Adjusted EBITDA related to the Lawrence system(d)

    (21.6 )   (23.2 )   (23.7 )   (5.9 )   (1.0 )

Transaction Adjusted EBITDA(e)

  $ 398.5   $ 429.1   $ 445.7   $ 109.0   $ 111.3  

    The following table shows a reconciliation of capital expenditures to Transaction Adjusted Capital Expenditures:

 
  Year Ended December 31,   Three months
Ended
March 31
 
(in millions)
  2014   2015   2016   2016   2017  

Capital expenditures

  $ 251.9   $ 231.9   $ 287.5   $ 63.6   $ 79.2  

Capital expenditures related to NuLink(a)

    3.5     3.7     3.8     1.2      

Capital expenditures related to AAB(b)

    1.2                  

Capital expenditures related to the South Dakota systems(c)

    (8.0 )                

Capital expenditures related to the Lawrence system(d)

    (4.5 )   (6.4 )   (5.7 )   (1.3 )   (0.1 )

Transaction Adjusted Capital Expenditures

  $ 244.1   $ 229.2   $ 285.6   $ 63.5   $ 79.1  

(a)
Represents our management's estimate of pre-acquisition Revenue, Adjusted EBITDA and Capital Expenditures of NuLink for the periods preceding our acquisition of substantially all of the operating assets of NuLink on September 9, 2016 based on the books and

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    records of NuLink, as adjusted by our management to reflect the assets actually acquired. We believe that, based on operating data, including operating data for the period following our acquisition of NuLink (from September 9, 2016 through September 30, 2016), the amounts represent a reasonable estimate of Revenue, Adjusted EBITDA and Capital Expenditures from NuLink's operations. However, there can be no assurances that such results accurately reflect the actual results of the acquired assets of NuLink for the periods preceding September 9, 2016. Such amounts are unaudited and have not been independently verified by our management.

(b)
Represents our management's estimate of pre-acquisition Revenue, Adjusted EBITDA and Capital Expenditures of Anne Arundel Broadband ("AAB") for the periods preceding our increased investment in AAB on April 30, 2014 based on the books and records of AAB, as adjusted by our management to reflect the assets actually acquired. We believe that, based on operating data, including operating data for the period following our increased investment in AAB (from May 1, 2014 through December 31, 2014), the amounts represent a reasonable estimate of Revenue, Adjusted EBITDA and Capital Expenditures from AAB's operations. However, there can be no assurances that such results accurately reflect the actual results of the acquired assets of AAB for the periods preceding April 30, 2014. Such amounts are unaudited and have not been verified by our management.

(c)
Represents the Revenue, Adjusted EBITDA and Capital Expenditures of the South Dakota systems for the periods preceding our divestiture of such assets on September 30, 2014 based on the individual books and records of the South Dakota systems. Such amounts have been extracted from the consolidated financial statements for the Company which has been audited. We believe that such amounts represent a reasonable estimate of Revenue, Adjusted EBITDA and Capital Expenditures for the South Dakota systems for the periods preceding our divestiture, however, the individual books and records of the South Dakota systems have not been audited. As a result, there can be no assurances that such results accurately reflect the actual results of the South Dakota systems for the periods preceding September 30, 2014.

(d)
Represents the Revenue, Adjusted EBITDA and Capital Expenditures of the Lawrence system for the periods preceding our divestiture of such assets on January 12, 2017 based on the individual books and records of the Lawrence system. Such amounts have been extracted from the consolidated financial statements for the Company which has been audited. We believe that such amounts represent a reasonable estimate of Revenue, Adjusted EBITDA and Capital Expenditures for the Lawrence system for the periods preceding our divestiture, however, the individual books and records of the Lawrence system have not been audited. As a result, there can be no assurances that such results accurately reflect the actual results of the Lawrence system for the periods preceding January 12, 2017.

(e)
Revenue Including Acquisitions and Dispositions, Transaction Adjusted EBITDA and Transaction Adjusted Capital Expenditures give effect to events that are directly attributable to the transactions described therein, factually supportable and expected to have a continuing impact on the combined results. These metrics do not reflect non-recurring charges that have been incurred in connection with the relevant transaction and related financings, including legal fees, broker fees and accounting fees.
(2)
After giving effect to the divestiture of the assets of the Lawrence system, as of December 31, 2016, homes passed was equal to approximately 3.026 million, total customers was approximately 772,300, HSD RGUs was approximately 718,900, Video RGUs was approximately 486,400, Telephony RGUs was approximately 251,100 and Total RGUs was approximately 1,456,400. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Homes Passed and Subscribers."

(3)
Defined as the number of customers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe. The period ended December 31, 2016 includes subscriber numbers from the NuLink acquisition on September 9, 2016. Due to the sale of our South Dakota systems on September 30, 2014, the South Dakota systems' homes passed and subscribers are not included in the above table for the year ended December 31, 2015.

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RISK FACTORS

         Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including our historical financial statements and the notes thereto, before making a decision to invest in our common stock. If any of the following risks actually occur, our business, financial condition, results of operations and prospects could be harmed. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment in us. Some statements in this prospectus, including statements in the following risk factors, constitute forward-looking statements. See "Forward-Looking Statements."

Risks Related to Our Business

We face a wide range of competition, which could negatively affect our business and financial results.

        Our industry is, and will continue to be, highly competitive. Some of our principal residential services competitors, including other cable and local telephone companies, offer services that provide features and functions comparable to the residential high-speed data, video, and/or telephony that we offer, and these competitors offer these services in bundles similar to ours. In most of our markets, cable competitors have invested in their networks and are able to offer a product suite which is comparable to ours. In addition, in some of our operating areas, AT&T, Verizon or other incumbent telephone providers have upgraded their networks to carry two-way video, high-speed data with substantial bandwidth and IP-based telephony services, which they market and sell in bundles, in some cases, along with their wireless services. These telephone incumbents may also offer satellite video as a part of their bundle, either in partnership with a satellite provider or directly as is the case with DirecTV. Consequently, there are more than two providers of "triple-play" services in some of our markets.

        In addition, each of our residential services faces competition from other companies that provide residential services on a stand-alone basis. Our residential video service faces competition from other cable and direct broadcast satellite providers that seek to distinguish their services from ours by offering aggressive promotional pricing, exclusive programming, and/or assertions of superior service or offerings. Increasingly, our residential video service also faces competition from companies that deliver content to consumers over the Internet and on mobile devices, some without charging a fee for access to the content as well evolving customer preferences to receive video content online, in a trend known as "cord cutting." These trends could negatively impact customer demand for our residential video service, especially premium channels and VOD services, and could encourage content owners to seek higher license fees from us in order to subsidize their free distribution of content. Our residential high-speed data and telephony services also face competition from wireless Internet and voice providers, and our residential voice service faces competition from other cable providers, OTT phone service and other communication alternatives, including texting, social networking and email. In recent years, a trend known as "wireless substitution" has developed whereby certain customers have chosen to utilize a wireless telephone service as their sole phone provider. We expect this trend to continue in the future.

        We also compete across each of our business high-speed data, networking and telephony services with incumbent local exchange carriers ("ILECs"), competitive local exchange carriers ("CLECs") and other cable companies.

        Any inability to compete effectively or an increase in competition could have an adverse effect on our financial results and return on capital expenditures due to possible increases in the cost of gaining and retaining subscribers and lower per subscriber revenue could slow or cause a decline in our growth rates and could reduce our revenue. As we expand and introduce new and enhanced services, we may be subject to competition from other providers of those services. We cannot predict the extent to which this competition will affect our future business and financial results or return on capital expenditures.

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        In addition, future advances in technology, as well as changes in the marketplace, in the economy and in the regulatory and legislative environments, may also result in changes to the competitive landscape.

Many of our competitors are larger than we are and possess more resources than we do.

        The industry in which we operate is highly competitive and has become more so in recent years. In some instances, we compete against companies with fewer regulatory burdens, better access to financing, greater personnel resources, greater resources for marketing, greater brand name recognition, and long-established relationships with regulatory authorities and customers. Increasing consolidation in the cable industry and the repeal of certain ownership rules have provided additional benefits to certain of our competitors, either through access to financing, resources or efficiencies of scale.

        In providing video service, we currently compete with Charter Communications, Inc. ("Charter"), Comcast Corporation ("Comcast"), Frontier Communications Corporation ("Frontier"), Mediacom Communications Corporation ("Mediacom"), Cox Communications, Inc. ("Cox"), AT&T Inc. ("AT&T") and Verizon Communications, Inc. ("Verizon"). We also compete with satellite television providers, including DirecTV and Dish Network. Satellite television providers typically offer local broadcast television stations, which further reduces our current advantage over satellite television providers and our ability to attract and maintain customers.

        In providing local and long-distance telephone services and data services, we compete with the incumbent local phone company in each of our markets as well as other cable providers in our markets. AT&T, CenturyLink, Inc. ("CenturyLink"), Frontier and Verizon are the primary ILECs in our targeted regions. They offer both local and long-distance services in our markets and are particularly strong competitors. We seek to attract customers away from other telephone companies and cable television service operators offering telephone services with Internet-based telephony. Cable operators offering voice services and data services in our markets increase competition for our bundled services.

We face risks relating to competition for the leisure and entertainment time of audiences, which has intensified in part due to advances in technology.

        Our business is subject to risks relating to increasing competition for the leisure and entertainment time of consumers. Our business competes with all other sources of entertainment and information delivery. Technological advancements, such as new video formats and Internet streaming and downloading, many of which have been beneficial to our business, have nonetheless increased the number of entertainment and information delivery choices available to consumers and have intensified the challenges posed by audience fragmentation. Increasingly, content owners are delivering their content directly to consumers over the Internet, often without charging any fee for access to the content. Furthermore, due to consumer electronics innovations, consumers are more readily able to watch such Internet-delivered content on television sets and mobile devices, which could lead to additional "cord-cutting." Although the increase of delivery of content through the Internet could be beneficial to demand for our HSD products, the increasing number of choices available to audiences could negatively impact not only consumer demand for our other products and services, but also advertisers' willingness to purchase advertising from us. If we do not respond appropriately to the increasing leisure and entertainment choices available to consumers, our competitive position could deteriorate, which could adversely affect our operations, business, financial condition or results of operations.

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Our future growth is partially dependent upon our edge-out strategy, which may or may not be successful.

        We are strategically focused on driving growth by constructing additional cable networks in order to sell our products and services within communities (generally near or adjacent to our cable network) which we do not currently serve. Generally, residents and enterprises within these communities can already purchase a bundled triple-play offering from other providers, or purchase high-speed data, video and telephony services from other operators on an à la carte basis. Therefore, we are expanding into competitive environments. This effort requires considerable financial and management resources, including reducing the near-term cash generation profile of our business. Additionally, we must obtain pole attachment agreements, franchises, construction permits, telephone numbers and other regulatory approvals to commence operations in these communities. Delays in entering into pole attachment agreements, receiving the necessary franchises and construction permits and conducting the construction itself have adversely affected our scheduled construction plans in the past and could do so again in the future. Difficulty in obtaining necessary resources may also adversely affect our ability to expand into new markets. We may face resistance from competitors who are already in markets we wish to enter. If our expectations regarding our ability to attract customers in these communities are not met, the capital requirements to complete the network investment or the time required to attract our expected level of customers are incorrect, our financial performance may suffer.

Our future growth is partially dependent upon a business services strategy, which may or may not be successful.

        One of the elements of our growth strategy is to execute upon a meaningful expansion in the business services market. To accommodate this growth, we may commit significant capital investments to technology, equipment and personnel focused on our business services. If we are unable to sufficiently build the necessary infrastructure and internal support functions to scale and expand our customer base, the potential growth of business services would be limited. In many cases, business services customers have service level agreements that require us to provide higher standards of service and reliability that may prove difficult to meet. In addition, there is significant competition in business services including significantly larger and better capitalized competitors with greater geographic reach. We may not be able to successfully compete with these competitors or be able to make the operational or financial investments necessary to successfully serve the targeted customer base.

A prolonged economic downturn, especially any downturn in the housing market, may negatively impact our ability to attract new subscribers and generate increased revenues.

        We are exposed to risks associated with prevailing economic conditions, which could adversely impact demand for our products and services and have a negative impact on our financial results. In addition, the global financial markets have displayed uncertainty, and at times the equity and credit markets have experienced unexpected volatility, which could cause economic conditions to worsen. A continuation or further weakening of these economic conditions could lead to reductions in consumer demand for our services, especially premium video services and enhanced features, such as DVRs, and a continued increase in the number of homes that replace their wireline telephone service with wireless service or OTT phone service and their video service with Internet-delivered and/or over-air content, which would negatively impact our ability to attract customers, maintain or increase rates and maintain or increase revenue. The expanded availability of free or lower cost competitive services, such as video streaming over the Internet, or substitute services, such as wireless phones, may further reduce consumer demand for our services during periods of weak economic conditions. In addition, providing video services is an established and highly penetrated business. Our ability to gain new video subscribers is partially dependent on growth in occupied housing in our service areas, which is influenced by both national and local economic conditions. If the number of occupied homes in our

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operating areas declines and/or the number of home foreclosures significantly increases, we may be unable to maintain or increase the number of our video subscribers.

The demand for our bundled broadband communications services may be lower than we expect.

        The demand for high-speed data, video and telephony services, either alone or as part of a bundle, cannot readily be determined. Our business could be adversely affected if demand for bundled broadband communications services is materially lower than we expect. Our ability to generate revenue will suffer if the markets for the services we offer, including telephony and high-speed data services, fail to develop, grow more slowly than anticipated or become saturated with competitors.

Our business is characterized by rapid technological change, and if we do not respond appropriately to technological changes, our competitive position may be harmed.

        We operate in a highly competitive, consumer-driven, rapidly changing environment and our success is, to a large extent, dependent on our ability to acquire, develop, adopt and exploit new and existing technologies to distinguish our services from those of our competitors. We have invested in advanced technology platforms that support advanced communications services and multiple emerging interactive services, such as VOD, DVR, interactive television, IP Centrex services and pure fiber network services. If we choose technologies or equipment that are less effective, cost-efficient or attractive to our customers than those chosen by our competitors, or if we offer services that fail to appeal to consumers, are not available at competitive prices or that do not function as expected, our competitive position could deteriorate, and our business and financial results could suffer. In addition, we may be required to select one technology over another and may not choose the technology that is the most economic, efficient or attractive to customers. We may also encounter difficulties in implementing new technologies, products and services and may encounter disruptions in service as a result.

        The ability of our competitors to acquire or develop and introduce new technologies, products and services more quickly than us may adversely affect our competitive position. Furthermore, advances in technology, decreases in the cost of existing technologies or changes in competitors' product and service offerings also may require us to make additional future research and development expenditures or to offer at no additional charge, or at a lower price, certain products and services that we currently offer to customers separately or at a premium. In addition, the uncertainty of the costs for obtaining intellectual property rights from third parties could impact our ability to respond to technological advances in a timely manner.

Increases in programming and retransmission costs or the inability to obtain popular programming could adversely affect our operations, business, financial condition or results of operations.

        Programming has been and is expected to continue to be, our largest single operating expense. In recent years, the cable industry has experienced rapid increases in the cost of cable programming, retransmission consent charges for local commercial television broadcast stations and regional sports programming. We expect these trends to continue. As compared to large national providers, our relatively modest base of subscribers limits our ability to negotiate lower programming costs. Furthermore, content providers may be unwilling to enter into distribution arrangements on acceptable terms and owners of non-broadcast video programming content may enter into exclusive distribution arrangements with our competitors. Any inability to pass programming cost increases on to our customers would have an adverse impact on our results of operations and a failure to carry programming that is attractive to our subscribers could adversely impact subscription and advertising revenues.

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A decline in advertising revenues or changes in advertising markets could negatively impact our businesses.

        A decline in advertising revenues could negatively impact our results of operations. Declines can be caused by the economic prospects of specific advertisers or industries, by increased competition for the leisure time of audiences, by audience fragmentation, by the growing use of new technologies or by the economy in general, any of which may cause advertisers to alter their spending priorities based on these or other factors. Further, natural disasters, wars, acts of terrorism, or other significant adverse events could lead to a reduction in advertising revenues as a result of general economic uncertainty.

Changes in broadcast carriage regulations could impose significant additional costs on us.

        Federal "must carry" rules require us to carry some local broadcast television signals on our cable systems that we might not otherwise carry. If the Federal Communications Commission (the "FCC") seeks to revise or expand the "must carry" rules, for example by requiring carriage of multicast signals, we would be forced to carry video programming that we would not otherwise carry, potentially drop more popular programming in order to free capacity for the required programming, decrease our ability to manage our bandwidth efficiently and/or increase our costs, which could make us less competitive. As a result, cable operators, including us, could be placed at a disadvantage versus other multichannel video providers. Potential federal legislation regarding programming packaging, bundling or à la carte delivery of programming could fundamentally change the way in which we package and price our services. We cannot predict the outcome of any current or future FCC proceedings or legislation in this area, or the impact of such proceedings on our business at this time.

Programming exclusivity in favor of our competitors could adversely affect the demand for our video services.

        We obtain our programming by entering into contracts or arrangements with programming suppliers. Federal rules restrict cable operators and other multichannel video programming distributors from entering into certain exclusive programming arrangements. A programming supplier, however, could enter into an exclusive arrangement, consistent with these rules, with one of our video competitors that could create a competitive advantage for that competitor by restricting our access to this programming. If our ability to offer popular programming on our cable television systems is restricted by exclusive arrangements between our competitors and programming suppliers, the demand for our video services may be adversely affected and our cost to obtain programming may increase.

We may not be able to obtain necessary hardware, software and operational support.

        We depend on third-party suppliers and licensors to supply some of the hardware, software and operational support necessary to provide our services. Some of these vendors represent our sole source of supply or have, either through contract or as a result of intellectual property rights, a position of some exclusivity. If demand exceeds these vendors' capacity, they experience operating or financial difficulties, they significantly increase the amount we pay for necessary products or services, or they cease production of any necessary product due to lack of demand, our ability to provide some services may be materially adversely affected. Any of these events could materially and adversely affect our ability to retain and attract subscribers, and have a material negative impact on our operations, business, financial condition or results of operations.

Loss of interconnection arrangements could impair our telephone service.

        We rely on other companies to connect the calls made by our local telephone customers to the customers of other local telephone providers. These calls are completed because our network is interconnected with the networks of other telecommunications carriers. These interconnection arrangements are mandated by the Communications Act of 1934, as amended (the "Communications Act"), and the FCC's implementing regulations. It is generally expected that the Communications Act

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will continue to undergo considerable interpretation and modification, including the FCC's potential forbearance from continuing to enforce carriers' statutory and regulatory interconnection obligations, which could have a negative impact on our interconnection agreements. It is also possible that further amendments to the Communications Act may be enacted which could have a negative impact on our interconnection agreements. The contractual arrangements for interconnection and access to unbundled network elements with incumbent carriers generally contain provisions for incorporation of changes in governing law. Thus, future FCC, state public service commission ("PSC") and/or court decisions may negatively impact the rates, terms and conditions of the interconnection services that we have obtained and may seek to obtain under these agreements, which could adversely affect our operations, business, financial condition or results of operations. Our ability to compete successfully in the provision of services will depend on the nature and timing of any such legislative changes, regulations and interpretations and whether they are favorable to us or to our competitors.

We receive support from various funds established under federal and state law and the continued receipt of that support is not assured.

        We receive payments from various federal or state universal service support programs. These include interstate common line support and Lifeline and Schools and Libraries programs within the federal Universal Service Fund (the "Federal USF") program, as well as similar state universal support programs. The total cost of all of the various Federal USF programs has increased greatly in recent years, putting pressure on regulators to reform those programs, and to limit both eligibility and support flows. In addition, we receive traffic termination payments from other carriers based upon rates established by various regulatory bodies. These rates may be subject to meaningful reductions due to ongoing rate reform efforts being led by the FCC. Our ability to receive state support program funds is also subject to the determination of certain PSCs. Adverse decisions by those PSCs may reduce our ability to access those funds.

        In November 2011, the FCC adopted an order reforming core parts of the USF and that also broadly recast the existing intercarrier compensation (the "ICC") scheme. The order, which became effective December 29, 2011, established the Connect America Fund (the "CAF") to replace support revenues provided by the current USF and redirected support from voice services to broadband services. The order also broadly altered the manner in which affected companies will have to operate their businesses.

        In March 2016, the FCC released its Report and Order (the "Order") regarding universal service support program reform for rate-of-return incumbent local exchange carriers. The Order focuses on broadband, including stand-alone broadband, and seeks to direct federal support to areas lacking broadband. It also reforms legacy support mechanisms to ensure that carriers have the incentives and support to continue investing in robust broadband networks. Rate-of-return incumbent local exchange carriers can choose from two paths for Federal USF support: 1) a model-based option (A-CAM); and 2) a broadband loop support mechanism that will provide support for stand-alone broadband and replace interstate common line support (legacy support). In November 2016, the FCC released a Public Notice announcing that 216 rate-of-return companies elected the A-CAM Cost Model, which exceeded the available A-CAM budget by more than $160 million annually. To contend with the oversubscription, the FCC intends to take "other measures that may be necessary" in order to prioritize among electing carriers or modify A-CAM parameters. While our affected subsidiaries did not choose the A-CAM option, we cannot anticipate what changes may come to the A-CAM model and if those changes might impact those carriers like us that have chosen the legacy support path.

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Our exposure to the credit risks of our customers, vendors and third parties could adversely affect our operations, business, financial condition and results of operations.

        We are exposed to risks associated with a potential general economic downturn and how such a development could impact our customers. Dramatic declines in the housing market in recent years, including falling home prices and increasing foreclosures, have affected consumer confidence and may cause increased delinquencies in payment or cancellations of services by our customers, or lead to unfavorable changes in the mix of products our customers purchase. The general economic downturn also may affect advertising sales as companies seek to reduce expenditures and conserve cash. Any of these events may adversely affect our operations, business, financial condition or results of operations.

        In addition, we are susceptible to risks associated with the potential financial instability of the vendors and third parties on which we rely to provide products and services, or to which we delegate certain functions. A general economic downturn, as well as volatility and disruption in the capital and credit markets, also could adversely affect vendors and third parties and lead to significant increases in prices, reduction in output or the bankruptcy of our vendors or third parties upon which we rely. Any interruption in the services provided by our vendors or by third parties could adversely affect our operations, business, financial condition or results of operations.

Historically, we have made several acquisitions, and we may make more acquisitions in the future as part of our growth strategy. Future acquisitions or joint ventures could strain our business and resources. In addition, we may not be able to identify suitable acquisitions.

        If we acquire existing companies or networks or enter into joint ventures, we may:

        Additionally, ongoing consolidation in our industry may reduce the number of attractive acquisition targets. Our failure to successfully identify and consummate acquisitions could adversely affect our operations, business, financial condition or results of operations.

We could be negatively impacted by future interpretation or implementation of regulations or legislation.

        Our video and telephony services are subject to extensive regulation at the federal, state and local levels. In addition, the federal government has extended regulation to high-speed data services. We are also subject to regulation of our video services relating to rates, equipment, technologies, programming, levels and types of services, taxes and other charges. The current telecommunications and cable legislation and regulations are complex and in many areas set forth policy objectives to be implemented by regulation at the federal, state and local levels. It is generally expected that the Communications Act and implementing regulations and decisions, as well as applicable state laws and regulations, will continue to undergo considerable interpretation and modification. From time to time, federal legislation, FCC and PSC decisions, and court decisions interpreting legislation, FCC or PSC decisions, are made that can affect our business. We cannot predict the timing or the future financial impact of legislation or administrative decisions. Our ability to compete successfully will depend on the nature

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and timing of any such legislative changes, regulations or interpretations, and whether they are favorable to us or to our competitors.

Compliance with, and changes to, environmental, safety and health laws and regulations could result in significant costs or adversely affect us.

        We are subject to a variety of federal, state and local environmental, safety and health laws and regulations, including those governing such matters as the generation, storage, reporting, treating, handling, remediation, use, disposal and transportation of, and exposure to, hazardous materials, the emission and discharge of hazardous materials into the atmosphere, the emission of electromagnetic radiation and health and safety. Noncompliance with such laws and regulations can result in, among other things, imposition of civil or criminal penalties or fines or suspension or cessation of our operations. Such laws and regulations are becoming increasingly more stringent and there can be no assurances that we will not incur significant costs to comply with, or liabilities under, such laws and regulations. Some of our sites have battery and diesel fuel operated powered backup generators or sources, or may have potential contamination risks from historical or surrounding activities. Under certain environmental laws and regulations, we may be liable for the costs of remediating contamination, regardless of fault, and these costs could be significant.

"Net neutrality" legislation or regulation could limit our ability to operate our high-speed data service business profitably and to manage our broadband facilities efficiently.

        On December 21, 2010, the FCC adopted new rules imposing "net neutrality" obligations on broadband Internet access providers. The new rules, which became effective on November 20, 2011, were based on the principles of (i) transparency, (ii) no blocking and (iii) no unreasonable discrimination, and are applicable to fixed and wireless broadband Internet access providers to different extents. Under the new rules, fixed and wireless broadband Internet access providers were required to make their practices transparent to both consumers and providers of Internet content, services, applications and devices on both their website and at the point-of-sale. In addition, subject to "reasonable network management," fixed broadband Internet access providers were prohibited from blocking lawful content, applications, services and non-harmful devices, and from engaging in unreasonable discrimination in transmitting lawful traffic. Verizon and other parties filed for additional FCC review, and filed an appeal challenging the FCC's authority to issue such rules, which was heard by the U.S. Court of Appeals for the D.C. Circuit. On January 14, 2014, a D.C. Circuit panel struck down the portions of the FCC's 2010 rules that banned blocking or discriminatory treatment of websites or other online applications by retail broadband Internet access providers such as incumbent telephone companies and cable operators. At the same time, the court approved the agency's requirement that broadband providers adequately disclose their policies regarding blocking and "network management" (that is, practices for avoiding network congestion, giving priority to some classes of traffic over others, etc.).

        On February 26, 2015, the FCC announced that it reclassified broadband Internet access as a telecommunications service under Title II of the Communications Act (the "Open Internet Order"). The FCC announced that its Open Internet Order prohibits: (i) broadband providers from blocking access to legal content, applications, services, or non-harmful devices; (ii) broadband providers from impairing or degrading lawful Internet traffic on the basis of content, applications, services or non-harmful devices; and (iii) broadband providers from favoring some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind—in other words, no "fast lanes." This rule also bans ISPs such as us from prioritizing content and services of their affiliates. The FCC further announced that its Open Internet Order will require additional disclosure and network management practices and will extend a number of the Title II regulatory requirements to broadband Internet access services, such as compliance with the privacy provisions of Section 222 of the Communications Act.

        The legality of the Open Internet Order was challenged in court by a number of parties. On June 14, 2016, the D.C. Circuit upheld the Open Internet Order.

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        The composition of the FCC changed in January 2017. We anticipate that some of the new rules established by the Open Internet Order will be modified by the FCC; however, the impact on our business is unknown.

        If the Open Internet Order survives any further legal challenges and remains unmodified by either future legislation or the FCC as re-composed, the rules imposed by the Order may increase our costs, impact our ability to provide service to our customers and adversely affect our profitability.

Regulation may limit our ability to make required investments or adopt business models that are needed to continue to provide robust high-speed data service.

        The rising popularity of bandwidth-intensive Internet-based services increases the demand for, and usage of, our high-speed data service. Examples of such services include the delivery of video via streaming technology and by download, peer-to-peer file sharing services and gaming services. We need flexibility to develop pricing and business models that will allow us to respond to changing consumer uses and demands and, if necessary, to invest more capital than currently expected to increase the bandwidth capacity of our systems. Our ability to do so could be restricted by legislative or regulatory efforts to increase the "net neutrality" requirements applicable to cable operators.

Offering telephony service may subject us to additional regulatory burdens, causing us to incur additional costs.

        We offer telephony services over our broadband network and continue to develop and deploy VoIP services. The FCC has ruled that competitive telephone companies that support VoIP services, such as those we offer our customers, are entitled to interconnect with incumbent providers of traditional telecommunications services, which ensure that our VoIP services can compete in the telephony market. The FCC has also declared that certain VoIP services are not subject to traditional state public utility regulation. The full extent of the FCC preemption of state and local regulation of VoIP services is not yet clear. Expanding our offering of these services may require us to obtain certain additional authorizations. We may not be able to obtain such authorizations in a timely manner, or conditions could be imposed upon such licenses or authorizations that may not be favorable to us. Telecommunications companies generally are subject to other significant regulation which could also be extended to VoIP providers. If additional telecommunications regulations are applied to our VoIP service, it could cause us to incur additional costs. The FCC has already extended certain traditional telecommunications carrier requirements, such as 911 emergency calling, USF collection, Communications Assistance for Law Enforcement Act, privacy, customer proprietary information, number porting, disability and discontinuance of service requirements to many VoIP providers such as us.

Rate regulation could materially adversely impact our operations, business, financial results or financial condition.

        Under current FCC rules, rates for basic service tier ("BST") video service and associated equipment may be regulated where there is no effective competition. Under current FCC rules, cable operators are presumed to be subject to effective competition. In all of the communities we serve, we are not subject to BST video rate regulation, either because the local franchising authority has not asked the FCC for permission to regulate rates due to the lack of effective competition or because of the presumed presence of effective competition. Except for telephony services provided by our operating companies that are ILECs (which are subject to certain rate regulations), there is currently no rate regulation for our other services, including high-speed data and non-ILEC telephony services. It is possible, however, that the FCC or Congress will adopt more extensive rate regulation for our video services or regulate the rates of other services, such as high-speed data, business data (or special access) services and telephony services, which could impede our ability to raise rates, or require rate reductions, and therefore could adversely affect our operations, business, financial condition or results of operations.

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We operate our network under franchises that are subject to non-renewal or termination.

        Our network generally operates pursuant to franchises, permits or licenses typically granted by a municipality or state agency with the authority to grant franchises. Additionally, other state or local governmental entities may exercise control over the use of public rights-of-way. Often, franchises are terminable if the franchisee fails to comply with material terms of the franchise agreement or the local franchise authority's regulations. Although none of our existing franchise or license agreements have been terminated, and we have received no threat of such a termination, one or more local authorities may attempt to take such action. We may not prevail in any judicial or regulatory proceeding to resolve such a dispute.

        Further, franchises generally have fixed terms and must be renewed periodically. Local franchising authorities may resist granting a renewal if they consider either past performance or the prospective operating proposal to be inadequate. In a number of jurisdictions, local authorities have attempted to impose rights-of-way fees on providers that have been challenged as violating federal law. A number of FCC and judicial decisions have addressed the issues posed by the imposition of rights-of-way fees on CLECs and on video distributors. To date, the state of the law is uncertain and may remain so for some time. We may become subject to future obligations to pay local rights-of-way fees that are excessive or discriminatory.

        The local franchising authorities can grant franchises to competitors who may build networks in our market areas. Recent FCC decisions facilitate competitive video entry by limiting the actions that local franchising authorities may take when reviewing applications by new competitors and lessen some of the burdens that can be imposed upon incumbent cable operators with which we ourselves compete. Local franchise authorities have the ability to impose regulatory constraints or requirements on our business, including those that could materially increase our expenses. In the past, local franchise authorities have imposed regulatory constraints on the construction of our network either by local ordinance or as part of the process of granting or renewing a franchise. They have also imposed requirements on the level of customer service that we provide, as well as other requirements. The local franchise authorities in our markets may also impose regulatory constraints or requirements that may be found to be consistent with applicable law, but which could increase the cost of operating our business.

Our business may be adversely affected by the application of certain regulatory obligations governing the intellectual property rights of third parties or if we cannot continue to license or enforce the intellectual property rights on which our business depends.

        We rely on patent, copyright, trademark and trade secret laws and licenses that are proprietary to our business, as well as our key vendors, along with other agreements with our employees, customers, suppliers and other parties, to establish and maintain our intellectual property rights in technology and the products and services used in our operations. However, any of our intellectual property rights could be challenged or invalidated, or such intellectual property rights may not be sufficient to permit us to take advantage of current industry trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product or service offerings or other competitive harm. Claims of intellectual property infringement by third parties under applicable agreements, laws and regulations (including the Digital Millennium Copyright Act of 1998) could require us to enter into royalty or licensing agreements on unfavorable terms, incur substantial monetary liability or be enjoined preliminarily or permanently from further use of the intellectual property in question, which could require us to change our business practices or offerings and limit our ability to compete effectively. Even claims without merit can be time-consuming and costly to defend and may divert management's attention and resources away from our business. Also, because of the rapid pace of technological change, we rely on technologies developed or licensed by third parties, and

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we may not be able to obtain or continue to obtain licenses from these third parties on reasonable terms, if at all.

If our trade names are not adequately protected, then we may not be able to build name recognition in our markets and our business may be adversely affected.

        We do not own, either legally or beneficially, any trademarks, service marks or trade names in connection with the operation of our business. We cannot assure you that we can obtain all necessary trademarks to adequately protect our intellectual property. It is possible that a third party could bring suit against us claiming infringement of registered trademarks, and if it did so and if there were a court determination against us, we might then be obligated to pay monetary damages, enter into a license agreement, or cease use of any such marks, all of which could have a material adverse effect on our operations, business, financial condition and results of operations.

We may encounter substantially increased pole attachment costs.

        Under federal law, we have the right to attach cables carrying video and other services to telephone and similar poles of privately-owned utilities at regulated rates. However, because these cables may carry services other than video services, such as high-speed data services or new forms of telephony services, some utility pole owners have sought to impose additional fees for pole attachment. If these rates were to increase significantly or unexpectedly, it would cause our network to be more expensive to operate. It could also place us at a competitive disadvantage with respect to video and telecommunications service providers who do not require or who are less dependent upon pole attachments, such as satellite providers and wireless telephony service providers.

        On June 8, 2011, the FCC enacted revised pole attachment rules to improve the efficiency and reduce the costs of deploying telecommunications, cable and broadband networks in order to accelerate broadband deployment. The formula for calculating the telecommunications attachment rate was revised, lowering the rate and bringing it in-line to the video rate. Many utilities seek to impose the telecommunications rate on us when they carry our services, other than video services, over their attachments. The order is being challenged before the FCC and federal courts. In November 2015, the FCC released another order taking further steps to balance the rates paid by cable operators and telecommunications carriers. Part of the order addressed some industry members' concerns that pole attachment rates might increase sharply now that the FCC has reclassified broadband service as a telecommunications service, as discussed further above. Moreover, the appropriate method for calculating pole attachment rates for cable operators that provide VoIP services remains unclear, and an August 2009 petition from a coalition of electric utility companies asking the FCC to declare that the pole attachment rate for cable companies' digital telephone service should be assessed at the telecommunications service rate is still pending.

        Some states in which we operate have assumed jurisdiction over the regulation of pole attachment rates, and so the federal regulations and the protections provided in those regulations may not apply in those states. In addition, some of the poles we use are exempt from federal regulation because they are owned by utility cooperatives and/or municipal entities or are otherwise exempt from the pole attachment regulations.

        Subject to applicable pole attachment access and rate regulations, the entities that own the poles that we attach to and conduits that we access may not renew our existing agreements when they expire, and they may require us to pay substantially increased fees. Some of these pole and conduit owners have recently imposed or are currently seeking to impose substantial rate increases. Any increase in our pole attachment or conduit access rates or inability to secure continued pole attachment and access agreements on commercially reasonable terms could adversely affect our operations, business, financial condition or results of operations.

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Our business is subject to numerous federal and state laws and regulations regarding privacy and data protection. Existing laws and regulations are evolving and subject to uncertain interpretation, and new laws and regulations affecting our business have been proposed. These laws and regulations could result in legal claims, changes to our business practices, increased cost of operations, or could otherwise impact our business.

        As a provider of high-speed data, video and telephony services, we are subject to an array of privacy-related laws and regulations that are constantly evolving and can be subject to significant change. In the course of providing service, we collect certain information about our subscribers and their use of our services. Our collection and use of personally identifiable information about our subscribers is subject to a variety of federal and state privacy requirements, including those imposed specifically on cable operators by Section 631 of the Communications Act. That section generally restricts the nonconsensual collection and disclosure to third parties of cable customers' personally identifiable information by cable operators, subject to certain specified exceptions. Several states and numerous local jurisdictions have enacted privacy laws or franchise privacy provisions that apply to cable services.

        Section 222 of the Communications Act also governs our use of customer proprietary information (including, but not limited to, customer proprietary network information ("CPNI") and personally identifiable information) related to our telecommunications and broadband services. In addition, FCC regulations apply to our use, disclosure and protection of CPNI associated with our voice telephone service. As we continue to provide interactive and other advanced services, additional privacy considerations may arise. Privacy continues to be a major focus of Congress, the Federal Trade Commission, the FCC, the U.S. Department of Commerce, and the states. Additional laws, regulations, or advisory guidelines could affect our ability to use and share customer information under various additional circumstances.

        We are also subject to state and federal regulations and laws regarding information security. Most of these regulations and laws apply to customer information that could be used to commit identity theft. Nearly all U.S. states and the District of Columbia have enacted security breach notification laws. These laws generally require that we give notice to customers whose financial account information has been disclosed because of a security breach. Congress is considering legislation to enact security breach notification requirements at the federal level, which may preempt or supplement these state laws and impose additional restrictions on us. FCC rules also impose breach notification and information security requirements, which may require that we give notice to customers of breaches in some circumstances where notice would not be required by state law. Our efforts to protect customer information may be unsuccessful due to the actions of third parties, technical malfunctions, employee error, employee malfeasance or other factors. If any of these events occur, our customers' information could be used, accessed or disclosed improperly.

        Claims resulting from actual or purported violations of these or other federal or state privacy laws could impact our business. For example, litigation related to our now-discontinued use of the NebuAd online advertising service was filed in federal court. Although that litigation was dismissed, adverse rulings in privacy-related litigation or regulatory proceedings could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices. Moreover, any actual or purported incidents involving unauthorized access to or improper use of the information of our customers could damage our reputation and our brand and diminish our competitive position.

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A phase-out of the compulsory copyright license for broadcast programming could adversely affect our ability to carry the programming transmitted by broadcast stations or could increase our programming costs.

        In exchange for filing reports and contributing a percentage of revenue to a federal copyright royalty pool, we obtain a compulsory copyright license allowing us to retransmit copyrighted material contained in broadcast television signals. The U.S. Copyright Office, the U.S. Government Accountability Office and the FCC all issued reports to Congress in 2011 that generally supported an eventual phase-out of the compulsory licenses. Such a change, if made, could adversely affect the ability of our cable television systems to obtain programming carried by broadcast television stations and could increase the cost of such programming.

Regulation of the set-top box market could materially and adversely impact our operations and impose additional costs on us.

        The FCC has adopted regulations to permit consumers to connect televisions and other consumer electronics equipment through a separate security device directly to digital cable television systems to enable receipt of one-way digital programming without requiring a set-top box. Additional FCC regulations promote the manufacture of plug-and-play TV sets and other equipment that can connect directly to a cable system through these separate security devices. Cable operators must provide a credit to customers who use this plug-and-play equipment and allow them to self-install independent security devices rather than having to arrange for professional installation. Additionally, the FCC is considering further action to promote a retail market for cable service navigation devices, including requirements to facilitate access to non-cable multichannel video provider systems and Internet video distributors, which may entail further mandates in connection with the support and deployment of set-top boxes. Although we generally require less up-front capital when our customers buy and self-install their own set-top box, these proposals could impose substantial costs on us and impair our ability to innovate.

Since our business is concentrated in specific geographic locations, our business could be adversely impacted by a depressed economy and natural disasters in these areas.

        We provide our services to areas in Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee, which are in the southeastern and midwestern regions of the United States. A stagnant or depressed economy in the United States, and the southeastern or midwestern United States in particular, could affect all of our markets and could adversely affect our operations, business, financial condition or results of operations.

        Our success depends on the efficient and uninterrupted operation of our communications services. Our network is attached to poles and other structures in many of our service areas, and our ability to provide service depends on the availability of electric power. A tornado, hurricane, flood, mudslide, earthquake or other natural catastrophe in one of these areas could damage our network, interrupt our service and harm our business in the affected area. In addition, many of our markets are close together and a single natural catastrophe could damage our network in more than one market.

We rely on network and information systems and other technology, and a disruption or failure of such networks, systems or technology as a result of computer viruses, "cyber attacks," misappropriation of data or other malfeasance, as well as outages, accidental releases of information or similar events, may disrupt our business.

        Because network and information systems and other technologies are critical to our operating activities, network or information system, shutdowns caused by events such as computer hacking, dissemination of computer viruses, worms and other destructive or disruptive software, "cyber attacks," denial of service attacks and other malicious activity pose increasing risks. Our network and

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information systems are also vulnerable to damage or interruption from power outages, terrorist attacks and other similar events which could have an adverse impact on us and our customers, including degradation of service, service disruption, excessive call volume to call centers and damage to our network, equipment, data and reputation. The occurrence of such an event also could result in large expenditures necessary to repair or replace such networks or information systems or to protect them from similar events in the future. Significant incidents could result in a disruption of our operations, customer dissatisfaction or a loss of customers or revenues.

        Furthermore, our operating activities could be subject to risks caused by misappropriation, misuse, leakage, falsification and accidental release or loss of information maintained in our information technology systems and networks, including customer, personnel and vendor data. We could be exposed to significant costs if such risks were to materialize, and such events could damage the reputation and credibility of our business and have a negative impact on our revenue. We also could be required to expend significant capital and other resources to remedy any such security breach. As a result of the increasing awareness concerning the importance of safeguarding personal information, the potential misuse of such information and legislation that has been adopted or is being considered regarding the protection, privacy and security of personal information, information-related risks are increasing, particularly for businesses like ours that handle a large amount of personal customer data.

Tax legislation and administrative initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.

        We operate cable systems in locations throughout the United States and, as a result, we are subject to the tax laws and regulations of federal, state and local governments. From time to time, various legislative and/or administrative initiatives may be proposed that could adversely affect our tax positions. There can be no assurance that our effective tax rate or tax payments will not be adversely affected by these initiatives. As a result of state and local budget shortfalls due primarily to the recession as well as other considerations, certain states and localities have imposed or are considering imposing new or additional taxes or fees on our services or changing the methodologies or base on which certain fees and taxes are computed. Such potential changes include additional taxes or fees on our services which could impact our customers, and combined reporting and other changes to general business taxes, central/unit-level assessment of property taxes and other matters, which could increase our income, franchise, sales, use and/or property tax liabilities. In addition, federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge. In addition, we have significant NOL carryforwards that are available to offset future operating results, but the availability and value of the NOLs may be impacted by future changes in federal or state law, including corporate law reform alternatives that are currently being discussed.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

        As of December 31, 2016, we had NOLs, for federal income tax purposes, of approximately $833.8 million, which may be available to offset federal income tax liabilities in the future. We expect to utilize between approximately $110 million and $130 million of our NOL carryforwards during 2017 due to the sale of our Lawrence system which closed on January 12, 2017, subject to finalization. In general, under Section 382 ("Section 382") of the Internal Revenue Code of 1986, as amended (the "Code"), a corporation that undergoes an "ownership change" is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. We anticipate that the offering will result in a change of ownership under Section 382 for federal and state income tax purposes. Section 382 provides limitations on the utilization of NOL carryforwards after an ownership change and we have analyzed the potential Section 382 impacts on our NOL carryforwards in the event of a Section 382

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ownership change. We determined that, although the Section 382 limitation would be significant, our anticipated fair market value and our projected net unrealized built-in gain ("NUBIG") position will likely result in a significant increase in our projected Section 382 limitation. Accordingly, we believe that our projected Section 382 limitation will not result in any significant impacts on our ability to utilize our NOL carryforwards to offset future taxable income or will have any significant impact on future operating cash flows. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code. Furthermore, our ability to utilize NOLs of companies that we have acquired or may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities, including for state tax purposes. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we continue to remain profitable.

We depend on the services of key personnel to implement our strategy. Changes in key personnel or loss of services of key personnel may affect our ability to implement our strategy or otherwise adversely affect our operations.

        The loss of members of our key management and certain other members of our operating personnel could adversely affect our business. Our ability to manage our anticipated growth depends on our ability to identify, hire and retain additional qualified management personnel. While we are able to offer competitive compensation to prospective employees, we may still be unsuccessful in attracting and retaining personnel.

        In addition, we regularly evaluate our senior management capabilities in light of, among other things, our business strategy, changes to our capital structure in connection with the acquisition, developments in our industry and markets and our ongoing financial performance. Accordingly, we may consider, where appropriate, supplementing, changing or otherwise enhancing our senior management team and operational and financial management capabilities in order to maximize our performance. Accordingly, our organizational structure and senior management team may change in the future. Changes to our senior management team could result in a material business interruption and material costs, including as a result of severance or other termination payments.

        Any of the foregoing could affect our ability to successfully operate the combined company and implement our strategy and could adversely affect our operations, business, financial condition or results of operations.

We are, or from time to time may become, subject to litigation and regulatory proceedings, which could materially and adversely affect us.

        We are subject to litigation in the normal course of our business. We are also a party to regulatory proceedings affecting the segments of the communications industry generally in which we engage in business. We cannot be certain of the ultimate outcomes of any claims that may arise in the future. Resolution of these types of matters against us may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could adversely impact us.

Applicable laws and regulations pertaining to our industry are subject to change.

        The exact requirements of applicable law are not always clear and the rules affecting our businesses are always subject to change. For example, the FCC may interpret its rules and regulations in enforcement proceedings in a manner that is inconsistent with the judgments we have made. Likewise, regulators and legislators at all levels of government may sometimes change existing rules or

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establish new rules. Congress, for example, considers new legislative requirements for cable operators virtually every year and there is always a risk that such proposals (if unfavorable to us) will ultimately be enacted. In addition, federal, state or local governments and/or tax authorities may change tax laws, regulations or administrative practices that could adversely affect our operations, business, financial condition or results of operations.

The FCC and local franchising authorities exercise authority over cable television systems and the FCC and state PSCs exercise authority over telecommunications services.

        The FCC has promulgated regulations covering many aspects of cable television operations. Failure to comply with those regulations could lead the FCC to impose on us monetary fines, cease-and-desist orders and/or other administrative sanctions. The cable franchises that our systems operate under, which are issued by states, cities, counties or other political subdivisions, may contain similar enforcement mechanisms in the event of any failure to comply with the terms of those franchises.

        The FCC also has promulgated regulations covering the interstate aspects and the regulated telecommunications earnings of our ILEC and CLEC operations. Our local and intrastate products and services and the regulated earnings are subject to regulation by state PSCs. Failure to comply with these regulations could lead the FCC to impose on us monetary fines, cease-and-desist orders and/or other administrative sanctions.

        These fines, cease-and-desist orders and/or other administrative sanctions may adversely affect our operations, business, financial condition or results of operations.

We have substantial indebtedness, which will increase our vulnerability to general adverse economic and industry conditions and may limit our ability to pursue strategic alternatives and react to changes in our business and industry.

        We have incurred substantial indebtedness. This amount of indebtedness may:

        Additionally, our ability to comply with the financial and other covenants contained in our debt instruments may be affected by changes in economic or business conditions or other events beyond our control. If we do not comply with these covenants and restrictions, we may be required to take actions

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such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing all or part of our existing debt, or seeking additional equity capital. Failure to comply could also cause a default, which may result in our substantial indebtedness becoming immediately due and payable. If this were to occur, we may be unable to adequately finance our operations. See "Description of Certain Indebtedness."

We may not be able to generate sufficient cash to service our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

        Our ability to make scheduled payments on or refinance our anticipated debt obligations will depend on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory and other factors beyond our control. We might not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to affect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. We expect that the agreements governing our indebtedness will restrict our ability to dispose of assets and use the proceeds from those dispositions and will also restrict our ability to raise debt capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, could have a material adverse effect on our operations, business, financial condition or results of operations.

We may not be able to access the credit and capital markets at the times and in the amounts needed and on acceptable terms.

        From time to time we may need to access the long-term and short-term capital markets to obtain financing. Our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including our financial performance, our credit ratings or absence of a credit rating, the liquidity of the overall capital markets and the state of the economy. There can be no assurance that we will have access to the capital markets on terms acceptable to us.

We are a holding company, which has no operations and depends on its operating subsidiaries for cash. Our subsidiaries may be limited in their ability to make funds available for the payment of our debt and other obligations.

        We are a holding company whose principal asset is a 100% equity interest and a 100% voting interest in WideOpenWest Finance, LLC ("WOW! Finance"). WOW! Finance is also a holding company whose operations are conducted through its subsidiaries. Neither we nor WOW! Finance hold any significant assets other than our direct and indirect interests in our subsidiaries. The cash flow to these two entities depends upon the cash flow of our operating subsidiaries and the payment of funds by these operating subsidiaries to such entities. This could adversely affect the ability of such entities to meet their obligations, including:

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        Our operating subsidiaries are not obligated to make funds available for payment of these obligations in the form of loans, distributions or otherwise. In addition, our operating subsidiaries' ability to make any such loans, distributions or other payments to WOW! Finance or to us will depend on their earnings, business and tax considerations and legal restrictions. Furthermore, covenants in the indentures and credit agreements governing the indebtedness of WOW! Finance's subsidiaries restrict their ability to make loans, distributions or other payments to WOW! Finance or to us.

The anticipated benefits of future acquisitions may not be realized fully and may take longer to realize than expected and we may experience integration and transition difficulties.

        In order to obtain all of the anticipated benefits of future acquisitions, management will be required to devote significant attention and resources to integrating the businesses and assets acquired. Delays in this process could adversely affect the combined company's business, financial results and financial condition. Even if we are able to integrate our business operations successfully, there can be no assurance that the integration will result in the realization of the full benefits of synergies, cost savings, innovation and operational efficiencies that we expect to realize or that these benefits will be achieved within a reasonable period of time.

        There is a risk that integration difficulties may cause us not to realize expected benefits from acquisitions and may affect our results, including adversely impacting the carrying value of the acquisition premium or goodwill. The long-term success of the acquisitions will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining the two businesses.

        In addition, it is possible that the integration process could result in the loss of key employees, the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies, which adversely affect our ability to maintain relationships with customers, providers and employees or to achieve the anticipated benefits of acquisitions. Integration and transition efforts also may divert management attention and resources.

        We may also opportunistically pursue dispositions of certain assets and/or businesses, which may involve material amounts of assets or lines of business, and adversely affect our results of operations, financial condition and liquidity.

We have experienced net losses and may generate net losses in the future.

        We experienced net losses for fiscal years 2015 and 2014 and may report net losses in the future. We reported net income of $26.3 million, or net margin of 2.1%, in the year ended December 31, 2016. In general, these prior net losses and $26.3 million of net income for the year ended December 31, 2016 have been impacted by interest expenses related to our indebtedness, acquisitions and depreciation and amortization expenses associated with capital expenditures related to expanding and upgrading of our cable systems. If we report net losses in the future, these losses may limit our ability to attract needed financing, and to do so on favorable terms, as such losses may prevent some investors from investing in our securities.

The accounting treatment of goodwill and other identified intangibles could result in future asset impairments, which would be recorded as operating losses.

        Authoritative guidance issued by the Financial Accounting Standards Board (the "FASB") requires that goodwill, including the goodwill included in the carrying value of investments accounted for using the equity method of accounting, and other intangible assets deemed to have indefinite useful lives, such as cable franchise rights, be tested annually for impairment or upon the occurrence of a triggering event. If the carrying value of goodwill or a certain intangible asset exceeds its estimated fair value, an impairment charge is recognized in an amount equal to that excess. Any such impairment is required to be recorded as a noncash operating loss.

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Risks Related to the Ownership of Our Common Stock and this Offering

Following this offering, we will be classified as a "controlled company" and, as a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

        Upon completion of this offering, the Sponsors will continue to control a majority of the voting power of our outstanding common stock. As a result, we expect to be a "controlled company" within the meaning of the applicable stock exchange corporate governance standards. Under the rules of the New York Stock Exchange, a company of which more than 50% of the outstanding voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain stock exchange corporate governance requirements, including:

        Following this offering, we intend to utilize these exemptions. As a result, we may not have a majority of independent directors and our nominating and corporate governance and compensation functions may not be decided solely by independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the stock exchange corporate governance requirements.

Our stock price could be extremely volatile or decline regardless of our operating performance and, as a result, you may not be able to resell your shares at or above the price you paid for them.

        Volatility or declines, regardless of our operating performance, in the market price of our common stock may prevent you from being able to sell your shares at or above the price you paid for your shares. The stock market in general has been highly volatile, and this may be especially true for our common stock given our growth strategy and stage of development. As a result, the market price of our common stock is likely to be similarly volatile. You may experience a decrease, which could be substantial, in the value of your stock, including decreases unrelated to our operating performance or prospects, and could lose part or all of your investment. The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere in this prospectus, including in this "Risk Factors" section, and other factors such as:

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        As we operate in a single industry, we are especially vulnerable to these factors to the extent that they affect our industry or our business. In addition, historically, stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many telecommunications companies. In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management's attention and resources, and could require us to make substantial payments to satisfy judgments or to settle litigation.

There is no existing market for our common stock, and we do not know if one will develop.

        Prior to this offering, there has not been a public market for our common stock. Although we have received approval to list our common stock on the New York Stock Exchange, an active trading market for our common stock may not develop following the completion of this offering, or if it does develop, may not be maintained. If an active trading market does not develop or is not maintained, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the shares of our common stock will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price you paid in this offering. Further, an inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategic transactions by using our shares of common stock as consideration.

A significant portion of our common stock will continue to be held by the Sponsors, whose interests may differ from yours.

        Upon completion of this offering, the Sponsors will beneficially own, in the aggregate, approximately 73% of our outstanding shares of common stock. The Sponsors may have interests that are different from or adverse to yours. For example, these stockholders may support proposals and actions with which you may disagree or which are not in your interests or which adversely impact the value of your investment. These stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, amendment of our amended and restated certificate of incorporation and approval of significant corporate transactions and, through our Board of Directors, the ability to control decision-making with respect to our business direction and policies. This control could have the effect of delaying or preventing a change of control in us or changes in management and could also make the approval of certain transactions difficult or impossible without the support of these stockholders, which in turn could reduce the price of our common stock.

        Even if the Sponsors' ownership of our shares falls below a majority, they may continue to be able to strongly influence or effectively control our decisions. Under our amended and restated certificate of incorporation, the Sponsors and their affiliates will not have any obligation to present to us, and they may separately pursue, corporate opportunities of which they become aware, even if those opportunities

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are ones that we would have pursued if granted the opportunity. See "Description of Capital Stock—Corporate Opportunity."

Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.

        Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this offering, we will have 86,321,711 shares of common stock outstanding. The shares of common stock offered in this offering will be freely tradable without restriction under the Securities Act of 1933, as amended (the "Securities Act"), except for any shares of our common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

        We, our officers and directors, the Sponsors, and certain other security holders have agreed, subject to certain exceptions, not to (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of common stock or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of common stock or such other securities, in cash or otherwise), in each case without the prior written consent of UBS Securities LLC and Credit Suisse Securities (USA) LLC, for a period of 180 days after the date of this prospectus. See "Underwriting."

        All of our shares of common stock outstanding as of the date of this prospectus may be sold in the public market by existing stockholders 180 days after the date of this prospectus (subject to extension in certain circumstances) and applicable volume and other limitations imposed under federal securities laws. In addition, see "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling shares of our common stock after this offering.

        After this offering, subject to any lock-up restrictions described above with respect to certain holders, holders of approximately 62,687,733 shares of our common stock will have the right to require us to register the sales of their shares under the Securities Act, under the terms of an agreement between us and the holders of these securities. See "Shares Eligible for Future Sale—Registration Rights" for a more detailed description of these rights.

        In the future, we may also issue our securities in connection with acquisitions or investments. The amount of shares of our common stock issued in connection with an acquisition or investment could constitute a material portion of our then-outstanding shares of our common stock.

Anti-takeover provisions contained in our amended and restated certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair, discourage or delay a takeover attempt, including a takeover attempt that you might consider favorable.

        Our amended and restated certificate of incorporation and amended and restated bylaws contain and Delaware law contains provisions which could have the effect of rendering more difficult, delaying

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or preventing an acquisition deemed undesirable by our Board of Directors. Our corporate governance documents include provisions:

        These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

        Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of impairing, discouraging or delaying a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return or enhance the price of our common stock.

        The net proceeds from the sale of our shares of common stock by us in this offering will be used to redeem a portion of our 10.25% Senior Notes due 2019, for general corporate purposes and to pay fees and expenses related to this offering. See "Use of Proceeds." However, we do not have any agreements or commitments for any acquisitions at this time. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be invested with a view towards the long-term benefit for our stockholders and this may not increase our results of operations or market value. Until the net proceeds are used, they may be placed in investments that do not produce significant income or that may lose value.

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If securities or industry analysts issue an adverse or misleading opinion regarding our common stock or do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, our stock price and trading volume could decline.

        The trading market for our common stock will be influenced, to some extent, by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. We do not control these analysts or the content and opinions included in their reports. If any of the analysts who cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who covers us were to cease coverage of us or fail to publish reports on us regularly or if analysts elect not to provide research coverage of our common stock, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

We do not expect to declare any dividends in the foreseeable future.

        We do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future. Consequently, investors may need to rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock. See "Dividend Policy."

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution.

        If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the amount of $41.53 per share because the initial public offering price of $21.00 is substantially higher than the pro forma net tangible book value per share of our outstanding common stock. Dilution results from the fact that the initial public offering price per share of the common stock is substantially in excess of the book value per share of common stock attributable to the existing stockholders for the presently outstanding shares of common stock. In addition, you may also experience additional dilution upon future equity issuances or the exercise of stock options to purchase common stock granted to our employees and directors under our management incentive plan. See "Dilution."

You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.

        After this offering we will have approximately 614 million shares of common stock authorized but unissued under our amended and restated certificate of incorporation upon the consummation of this offering. We will be authorized to issue these shares of common stock and options, rights, warrants and appreciation rights relating to common stock for consideration and on terms and conditions established by our Board of Directors in its sole discretion, whether in connection with acquisitions or otherwise. Any common stock that we issue, including under our equity incentive plans, would dilute the percentage ownership held by the investors who purchase common stock in this offering.

        In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

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Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

        Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law ("DGCL"), our amended and restated certificate of incorporation or our amended and restated bylaws, or (iv) any other action asserting a claim against us that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our operations, business, financial condition or results of operations.

The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain qualified board members.

        As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and stock exchange rules promulgated in response to the Sarbanes-Oxley Act. The requirements of these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. One of the Company's subsidiaries currently files annual, quarterly and current reports with respect to our business and financial condition with the SEC and as a result, our management team already includes an external financial reporting team familiar with the processes and procedures of certain aspects of public company reporting. We estimate that we have incurred approximately $1.3 million per year in recent years on our public reporting compliance function. Nevertheless, the Company does not currently file annual, quarterly and current reports and will have to file proxy statements pursuant to Section 14(a) of the Exchange Act of 1934, as amended (the "Exchange Act"), as a public company. Accordingly, we expect compliance costs to increase and that additional management time and attention will be required to ensure we operate properly as a public company. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required, and management's attention may be diverted from other business concerns. These rules and regulations could also make it more difficult for us to attract and retain qualified independent members of our Board. Additionally, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. Furthermore, because we have not operated as a company with equity listed on a national securities exchange in the past, we might not be successful in implementing these requirements. The increased costs of compliance with public company reporting requirements and our potential failure to satisfy these requirements could have a material adverse effect on our operations, business, financial condition or results of operations.

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FORWARD-LOOKING STATEMENTS

        This prospectus contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this prospectus are forward-looking statements. Forward-looking statements discuss our plans, strategies, prospects and industry estimates. These statements identify prospective information and can generally be identified by the use of forward-looking terminology, including the terms "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "might," "should," "could," "would," "project," "predict," "potential" or similar expressions or the negative of these terms. The foregoing is not an exclusive list of all forward-looking statements we make. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The matters referred to in the forward-looking statements contained in this prospectus may not in fact occur. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:

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        While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Our Business" in this prospectus. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect.

        All forward-looking statements speak only as of the date on which they are made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. If we do update one or more forward-looking statements, there should be no inference that we will make additional updates with respect to those or other forward-looking statements.

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USE OF PROCEEDS

        We estimate that the net proceeds to us from this offering, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, will be approximately $373.5 million assuming the shares offered by us are sold for $21.00 per share, the midpoint of the price range set forth on the cover of this prospectus. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders in connection with the exercise of the underwriters' option to purchase additional shares.

        We intend to use the net proceeds from the sale of common stock by us in this offering:

        A $1.00 increase or decrease in the assumed initial public offering price of $21.00 per share would increase or decrease the net proceeds we receive from this offering by approximately $17,952,381, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same. Similarly, each increase or decrease of one million shares in the number of shares of common stock offered by us would increase or decrease the net proceeds we receive from this offering by approximately $19,792,500, assuming the assumed initial public offering price remains the same.

        The 10.25% Senior Notes mature on July 15, 2019. See "Description of Certain Indebtedness—10.25% Senior Notes." Pending use of the net proceeds from this offering as described above, we may invest the net proceeds in short- and intermediate-term interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States government.

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DIVIDEND POLICY

        We currently intend to retain all available funds and any future earnings to fund the development and growth of our business, and therefore we do not anticipate paying any cash dividends in the foreseeable future. Additionally, our ability to pay dividends on our common stock will be limited by restrictions on the ability of our subsidiaries and us to pay dividends or make distributions under the terms of current and any future agreements governing our indebtedness. Any future determination to pay dividends will be at the discretion of our Board of Directors, subject to compliance with covenants in our current and future agreements governing our indebtedness, and will depend upon our results of operations, financial condition, capital requirements and other factors that our Board of Directors deems relevant.

        In addition, since we are a holding company, substantially all of the assets shown on our consolidated balance sheet are held by our subsidiaries. Accordingly, our earnings, cash flow and ability to pay dividends are largely dependent upon the earnings and cash flows of our subsidiaries and the distribution or other payment of such earnings to us in the form of dividends.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents, indebtedness and our capitalization as of March 31, 2017 on:

        You should read the following table in conjunction with the sections entitled "Use of Proceeds," "Selected Historical Combined Consolidated Financial and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our combined consolidated financial statements and related notes included elsewhere in this prospectus.

 
  March 31, 2017  
(in millions)
  Actual   As Adjusted  

Cash and cash equivalents(1)

  $ 86.5   $ 86.5  

Debt:

             

Senior Notes(2)

    734.6     368.1  

Term B Loans(3)

    2,043.6     2,043.6  

Revolving Credit Facility(3)

         

Capital lease obligations

    4.0     4.0  

Total debt and capital lease obligations

    2,782.2     2,415.7  

Debt issuance costs, net

    (20.7 )   (17.7 )

Total debt and capital lease obligations, net of debt issuance costs

  $ 2,761.5   $ 2,398.0  

Stockholders' Deficit:

   
 
   
 
 

Common stock ($0.01 par value; 5,000 shares authorized, 1,000 shares issued and 1,000 shares outstanding on an actual basis; 700,000,000 shares authorized, 86,321,711 shares issued and 86,321,711 shares outstanding on an as adjusted basis)

           

Total stockholders' deficit

    (645.2 )   (271.7 )

Total capitalization

  $ 2,116.3   $ 2,126.3  

(1)
Does not include approximately $11.0 million of cash held by Parent as of March 31, 2017, which Parent intends to contribute to the Company prior to the consummation of the offering.

(2)
Includes $4.7 million and $2.4 million of net premium, respectively.

(3)
The Senior Secured Credit Facilities consist of (i) the $2,043.6 million Term B Loans, which includes $11.1 million of net discounts, and (ii) the $200.0 million Revolving Facility, of which $192.5 million was available at March 31, 2017 after reflecting $7.5 million outstanding letters of credit. For more information, see "Description of Certain Indebtedness—Senior Secured Credit Facilities."

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DILUTION

        If you invest in our common stock, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock and the net tangible book value per share of our common stock after this offering. Dilution results from the fact that the initial public offering price per share of the common stock is substantially in excess of the book value per share of common stock attributable to the existing stockholders for the presently outstanding shares of common stock.

        Our net tangible book deficit as of March 31, 2017 was $(2,136.1) million, or $(31.75) per share of common stock (before giving effect to this offering). Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the basic weighted average number of shares of common stock outstanding.

        After giving effect to the sale of 19,047,619 shares of common stock offered by us in this offering at an assumed initial public offering price of $21.00, which is the midpoint of the price range set forth on the cover of this prospectus, less estimated underwriting discounts and commissions and estimated offering expenses, our pro forma net tangible book value (deficit) as of March 31, 2017 would have been approximately $(1,772.5) million, or $(20.53) per share of common stock. This represents an immediate increase in net tangible book value to our existing stockholders of $11.22 per share and an immediate dilution to new investors in this offering of $(41.53) per share. The following table illustrates this pro forma per share dilution in net tangible book value to new investors.

Assumed initial public offering price per share

        $ 21.00  

Net tangible book value (deficit) per share as of common stock of as of March 31, 2017

  $ (31.75 )      

Increase per share attributable to new investors

    11.22        

Pro forma net tangible book value per share after this offering

          (20.53 )

Dilution per share to new investors

        $ (41.53 )

        A $1.00 increase or decrease in the assumed initial public offering price of $21.00 per share, the mid-point of the price range set forth on the cover of this prospectus, would increase or decrease pro forma net tangible book value by $17.5 million, or $0.20 per share, and would increase or decrease the dilution per share to new investors by $0.80 based on the assumptions set forth above.

        The following table summarizes as of May 15, 2017 on an as adjusted basis, the number of shares of common stock purchased, the total consideration paid and the average price per share paid by the equity grant recipients during the last five years and by new investors, based upon an assumed initial public offering price of $21.00 per share (the mid-point of the initial public offering price range), before deducting estimated underwriting discounts and commissions and offering expenses:

 
  Shares Purchased   Total Consideration    
 
 
  Number   Percent   Amount
(in thousands)
  Percent   Average Price
Per Share
 

Existing stockholders

    39,078,085     67.2 % $ 518,801     56.5 % $ 13.28  

New investors

    19,047,619     32.8     400,000     43.5   $ 21.00  

Total

    58,125,704     100 % $ 918,801     100 %      

        Except as otherwise indicated, the discussion and tables above assume no exercise of the underwriters' option to purchase additional shares and no exercise of any outstanding options. If the underwriters' option to purchase additional shares is exercised in full, these existing stockholders would

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own approximately 67% and our new investors would own approximately 33% of the total number of these shares.

        The tables and calculations above are based on 86,321,711 shares of common stock outstanding as of May 15, 2017, and assume no exercise by the underwriters of their option to purchase up to an additional 2,857,142 shares from us. This number excludes, as of May 15, 2017, an aggregate of 6,351,891 shares of common stock reserved for issuance under our equity incentive plan that we intend to adopt in connection with this offering and excludes shares of restricted common stock that we expect to issue following this offering.

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SELECTED HISTORICAL COMBINED CONSOLIDATED FINANCIAL AND OTHER DATA

        The following table sets forth our selected financial data for the periods presented. The balance sheet data as of December 31, 2015 and 2016 and the statement of operations data for the years ended December 31, 2014, 2015 and 2016 set forth below are derived from our audited combined consolidated financial statements included elsewhere in this prospectus. The balance sheet data as of December 31, 2012, 2013 and 2014 and the statement of operations data for the years ended December 31, 2012 and 2013 are derived from our audited combined consolidated financial statements not included in this prospectus. We derived the following summary historical combined condensed consolidated financial data for the three months ended March 31, 2016 and 2017 from our unaudited combined condensed consolidated financial statements included elsewhere in this prospectus. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 31, 2017.

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        The selected financial data below should be read in conjunction with the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," included elsewhere in this prospectus. Our historical operating results are not necessarily indicative of future operating results.

 
  Year Ended December 31,   Three Months Ended
March 31,
 
(in millions)
  2012(1)   2013(2)   2014(3)(4)   2015   2016(5)   2016   2017  

Statement of Operations Data:

                                           

Revenue

  $ 910.4   $ 1,199.7   $ 1,264.3   $ 1,217.1   $ 1,237.0   $ 302.3   $ 300.0  

Costs and expenses:

                                           

Operating (excluding depreciation and amortization)

    515.0     663.9     737.0     678.6     668.3     164.5     159.8  

Selling, general and administrative

    104.4     135.8     135.8     110.6     116.4     26.0     30.3  

Depreciation and amortization

    203.9     256.4     251.3     221.1     207.0     52.5     50.3  

Management fee to related party          

    1.4     1.7     1.7     1.9     1.7     0.4     0.5  

    824.7     1,057.8     1,125.8     1,012.2     993.4     243.4     240.9  

Income from operations

    85.7     141.9     138.5     204.9     243.6     58.9     59.1  

Other income (expense):

                                           

Interest expense

    (180.4 )   (242.0 )   (237.0 )   (226.0 )   (211.1 )   (54.2 )   (45.7 )

Realized and unrealized gain (loss) on derivative instruments, net

    (9.4 )   3.4     4.1     5.6     2.3     1.1      

Gain on sale of assets

            52.9                 38.7  

Loss on early extinguishment of debt

    (8.3 )   (58.1 )       (22.9 )   (38.0 )       (5.0 )

Other income (expense), net

    0.2     (0.3 )   3.4     (0.4 )   2.2         1.4  

Income (loss) before provision for income tax

    (112.2 )   (155.1 )   (38.1 )   (38.8 )   (1.0 )   5.8     48.5  

Income tax benefit (expense), net          

    (0.7 )   (5.0 )   10.8     (9.9 )   27.3     (1.5 )   23.9  

Net income (loss)

  $ (112.9 ) $ (160.1 ) $ (27.3 ) $ (48.7 ) $ 26.3   $ 4.3   $ 72.4  

Balance Sheet Data:

                                           

Total assets

  $ 2,814.6   $ 2,810.3   $ 2,874.7   $ 2,684.7   $ 2,770.8   $ 2,672.6   $ 2,661.6  

Total debt, including capital lease obligations

  $ 2,806.3   $ 2,941.1   $ 3,019.3   $ 2,882.2   $ 2,871.2   $ 2,879.3   $ 2,761.5  

Total liabilities

  $ 3,441.5   $ 3,597.3   $ 3,690.9   $ 3,550.7   $ 3,488.8   $ 3,510.5   $ 3,306.8  

Other Financial Data:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Capital expenditures

  $ 158.2   $ 221.9   $ 251.9   $ 231.9   $ 287.5   $ 63.6   $ 79.2  

(1)
Includes balance sheet data, financial results and operations data relating to Knology for the periods subsequent to our acquisition of Knology on July 17, 2012.

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(2)
Includes balance sheet data, financial results and operations data relating to Bluemile, Inc. ("Bluemile") for the periods subsequent to our acquisition of certain assets from Bluemile on September 27, 2013.

(3)
Includes balance sheet data, financial results and operations data relating to AAB for the periods subsequent to our increased investment in AAB on April 30, 2014.

(4)
Excludes balance sheet data, financial results and operations data relating to our South Dakota systems for the periods subsequent to our divestiture of such assets on September 30, 2014.

(5)
Includes balance sheet data, financial results and operations data relating to NuLink for the period subsequent to our acquisition of substantially all of the operating assets of NuLink on September 9, 2016.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

         The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the "Selected Historical Combined Consolidated Financial and Other Data" and our condensed consolidated financial statements, including the notes thereto, appearing elsewhere in this prospectus.

         In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations, and intentions set forth under the sections entitled "Risk Factors" and "Forward-Looking Statements." Our actual results and the timing of events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section entitled "Risk Factors" and elsewhere in this prospectus.

         Unless otherwise noted, all financial, statistical and operating information in this section is presented on an actual basis and does not give effect to acquisitions or divestitures that were completed after the periods presented.

Overview

        We are the sixth largest cable operator in the United States ranked by number of customers as of December 31, 2016. We provide HSD, Video, Telephony, and business-class services to approximately 3.0 million homes and businesses. Our services are delivered across 19 markets via our advanced HFC cable network. Our footprint covers over 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee. Led by our robust HSD offering, our products are available either as a bundle or as an individual service to residential and business services customers. As of March 31, 2017, 780,100 customers subscribed to our services.

        Since commencing operations in 2001, our focus has been to offer a competitive alternative cable service and establish a brand with a strong market position. We have scaled our business through (i) organic subscriber growth and increased penetration within our existing markets and footprint, (ii) edge-outs to grow our footprint, (iii) upgrades to introduce enhanced broadband services to networks we have acquired, (iv) entry into business services, with a broad range of HSD, Video and Telephony products, and (v) acquisitions and integration of cable systems.

        We believe we have one of the most technologically advanced, fiber-rich networks in our service areas. We have designed our network with the goal of maximizing Internet speeds and accommodating future broadband demand. Our all-digital HFC infrastructure operates with a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable to 1.2 Ghz throughout. All of our new communities are built with a capacity of 1.2 Ghz. Our HFC network is fully upgraded with DOCSIS 3.0 and is capable of being upgraded to DOCSIS 3.1 in all of our markets. According to CableLabs, a non-profit innovation and research and development lab founded by members of the cable industry, DOCSIS 3.1 technology has the capacity to support network speeds up to 10 Gbps downstream and up to 1 Gbps upstream. We serve an average of 310 homes per node, enabling us to deliver quality HSD service and the capability to provide broadband speeds of 1 Gbps and higher. Our HFC network consists of a high-bandwidth, multi-use service provider backbone, which allows us to centrally source data, voice and video services for both residential and business traffic. We believe the quality and uniform architecture of our next-generation network is a competitive advantage that enables us to offer high-quality broadband services that meet our current and future customers' needs without incurring significant upgrade capital expenditures.

        We operate primarily in economically stable suburbs that are adjacent to large metropolitan areas as well as secondary and tertiary markets, which we believe have favorable competitive and demographic profiles and include businesses operating across a range of industries. We benefit from the

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ability to augment our footprint by pursuing value-accretive network extensions, or edge-outs, to increase our addressable market and grow our customer base. We have historically made selective capital investments in edge-outs to facilitate growth in residential and business services.

        We are focused on efficient capital spending and maximizing Adjusted EBITDA through an Internet-centric growth strategy while maintaining a profitable video subscriber base. Based on its per subscriber economics, we believe that HSD represents the greatest opportunity to enhance profitability across our residential and business markets. We believe that our advanced network is designed to meet our current and future customers' HSD needs. We offer HSD speeds up to 500 Mbps in over 94% of our footprint with the capability to offer 1 Gbps or more in all of our markets. HSD services generated revenues of $373.1 million, or approximately 30.2% of total revenues, and incremental contribution of $358.5 million, or approximately 45.4% of total incremental contribution, in the year ended December 31, 2016.

        We offer a full suite of digital video services, including VOD, high-definition video and DVR. In approximately 79% of our footprint, we also offer our "Ultra" video product, which is a technologically advanced, IP enabled, whole-home DVR solution that integrates traditional linear video, an advanced user interface and direct access to OTT content, such as Netflix and other applications. Video service is a competitive business with declining margins as programming costs have increased over time. We have historically offset the revenue impact of RGU declines in Video through rate increases and other surcharges. Video services generated revenues of $547.1 million, or approximately 44.2% of total revenues, and incremental contribution of $188.7 million, or approximately 23.9% of total incremental contribution, in the year ended December 31, 2016.

        Telephony services generated revenues of $155.2 million, or approximately 12.5% of total revenues, and incremental contribution of $138.2 million, or approximately 17.5% of total incremental contribution, in the year ended December 31, 2016. We have experienced declines in Telephony customers over time and we expect this trend will continue given competition from wireless voice service providers.

        Our technologically advanced network enables us to provide business services customers with a broad portfolio of carrier-class data and voice services, including Direct Internet Access, Ethernet over fiber and HFC, virtual private networks, VoIP solutions, wholesale fiber connectivity, cell backhaul solutions, disaster recovery, cloud back-up, and SIP and PRI trunking services. Our advanced business services product offering continues to evolve, as we leverage our investment in next generation software enabled infrastructure to launch new services such as a full suite of managed and other virtual services. We believe that we have a significant market penetration growth opportunity in several of our markets with the capability to target small, medium and large businesses within our footprint with our robust business services product suite. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015.

Ownership and Basis of Presentation

        Our business commenced operations in 2001. WideOpenWest, Inc. ("WOW!") was founded in 2012 as WideOpenWest Kite, Inc., a Delaware corporation. WideOpenWest Kite, Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017. It is wholly owned by Racecar Acquisition, LLC, which is a wholly owned subsidiary of WideOpenWest Holdings, LLC (the "Parent"). In the following context, the terms we, us, WOW!, or the "Company" may refer, as the context requires, to WOW! or, collectively, WOW! and its subsidiaries.

        On April 1, 2016, the Company consummated a restructuring (the "Restructuring") whereby WideOpenWest Finance, LLC ("WOW! Finance") became a wholly owned subsidiary of WOW!.

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Previously, WOW! Finance was owned by WideOpenWest Illinois, Inc., WideOpenWest Ohio, Inc., WideOpenWest Cleveland, Inc., WOW! Sigecom, Inc. and WOW! (collectively, the "Members"). Prior to the Restructuring, the Members were wholly owned subsidiaries of Racecar Acquisition, LLC.

        As a result of the Restructuring, each of the Members, other than WOW!, merged with and into WOW!, WOW! became the sole subsidiary of Racecar Acquisition and WOW! Finance became a wholly owned subsidiary of WOW!.

        On January 12, 2016, June 29, 2016 and December 13, 2016, Parent contributed $25.0 million, $25.0 million and $73.0 million, respectively, to us in connection with Crestview and Avista's primary investment in Parent. The proceeds were used to redeem Senior Subordinated Notes and for general corporate purposes.

        The financial statements presented herein include the consolidated accounts of WOW! and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Parent wholly owns all subsidiary Members. Because transactions among entities under common control do not result in a change in control, the combined consolidated financial statements are not affected by a common control transaction. As a result, the consolidated financial statements of WOW! reflect all transactions of all the wholly owned subsidiaries of Parent. The historical financial information has not been adjusted to give effect to transaction adjustments or any other pro forma events.

        Certain employees of WOW! participate in equity plans administered by Parent. Because the management units from the equity plan are issued from Parent's ownership structure, the management units' value directly correlates to the results of WOW!, and as the primary asset of Parent is its investment in WOW!, the management units for the equity plan have been "pushed down" to the Company. All of the Company's ownership units and unit holders discussed herein are legally Parent's.

Distribution

        Prior to the closing of this offering, we will effect a 67,274.092-for-1 stock split and our indirect parent company, WideOpenWest Holdings, LLC, will distribute the shares of our common stock it holds (indirectly through Racecar Acquisition, LLC) to its equity holders based on the relative rights under its limited liability agreement (the "Distribution"), with no issuance of additional shares by us.

        The Distribution will not affect our operations, which we will continue to conduct through our operating subsidiaries. The primary purpose of the Distribution is to remove an unnecessary layer of our organizational structure prior to the closing of this offering.

NuLink Acquisition

        On September 9, 2016, we finalized our acquisition of HC Cable Opco, LLC d/b/a NuLink in Newnan, Georgia for $54.3 million, all of which we paid in cash. The acquisition extended our HSD, Video and Telephony service and award-winning customer support experience to more than 34,000 additional homes and businesses. The results of operations related to our NuLink acquisition are included in our combined consolidated financial statements for the year ended December 31, 2016 for the period following our acquisition thereof.

Sale of our Lawrence, Kansas System

        On January 12, 2017, we and Midcontinent Communications ("MidCo") consummated the Asset Purchase Agreement under which MidCo acquired our Lawrence, Kansas system for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement.

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Partial Redemption of Senior Notes

        On March 20, 2017, we redeemed $95.1 million of outstanding principal of our 10.25% Senior Notes. In addition to the partial principal redemption, we paid accrued interest on the notes of $1.7 million and prepayment penalties of $4.9 million. After this partial redemption, we have $729.9 million in principal outstanding of 10.25% Senior Notes.

New Revolving Credit Facility

        On May 8, 2017, we entered into a Commitment Letter for a new 5-year revolving credit facility of up to $300 million (the "New Revolving Credit Facility") to replace our existing $200 million revolving credit facility. The New Revolving Credit Facility is expected to be entered into substantially concurrently with the consummation of this offering, subject to receipt by us of gross proceeds from this offering of at least $310 million and the satisfaction of other customary closing conditions. At such time, $200 million of revolving commitments under the New Revolving Credit Facility will be immediately available to us, while the remaining $100 million of revolving commitments will only become available to us upon compliance with certain other conditions. Loans under the New Revolving Credit Facility will bear interest, at our option, at a rate equal to ABR plus 2.00% or LIBOR plus 3.00%. The guarantees, collateral and covenants in the New Revolving Credit Facility will be the same as those contained in our existing revolving credit facility.

Retirement of Senior Subordinated Notes

        On July 15, 2016, we redeemed $46.9 million in aggregate principal amount outstanding of our 13.38% Senior Subordinated Notes. In addition to the partial principal redemption, we paid accrued interest on the notes of $19.7 million and prepayment penalties of $3.1 million.

        On September 15, 2016, we redeemed an additional $159.1 million of outstanding principal of our 13.38% Senior Subordinated Notes. In addition to the principal redemption, we paid accrued interest on the notes of $3.5 million and $10.7 million in prepayment penalties.

        On December 18, 2016, we fully redeemed the remaining amounts outstanding under our Senior Subordinated Notes. We paid $89.0 million in outstanding principal, $5.0 million in accrued interest and $6.0 million in prepayment penalties in connection with this redemption. As of December 31, 2016, we have no outstanding Senior Subordinated Notes.

Term B Loans Refinancing

        On August 19, 2016, we entered into a sixth amendment ("Sixth Amendment") to our Credit Agreement, dated as of July 17, 2012, as amended ("Credit Agreement"), among us and the other parties thereto. Capitalized terms used herein without definition shall have the same meanings as set forth in the Credit Agreement.

        The Sixth Amendment, among other provisions, provides for the addition of a new $2.065 billion seven-year Term B Loan, which bears interest, at our option, at LIBOR plus 3.50% or ABR plus 2.50% and includes a 1.00% LIBOR floor. The new Term B Loan has a maturity date of August 19, 2023, unless the earlier maturity dates set forth below are triggered under the following circumstances. The Term B Loan will mature on April 15, 2019 if (i) any of our existing outstanding Senior Notes are outstanding on April 15, 2019, or (ii) any future indebtedness with a final maturity date prior to the date that is 91 days after August 19, 2023 is incurred to refinance our existing Senior Notes. The Term B Loan will mature on July 15, 2019 if (i) any of the Company's existing Senior Subordinated Notes are outstanding on July 15, 2019, or (ii) any indebtedness with a final maturity prior to the date that is 91 days after August 19, 2023 is incurred to refinance the Company's existing Senior Subordinated Notes.

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        Proceeds from the issuance of the new Term B Loans were used to repay in full the existing $1.825 billion Term B Loan, which had a maturity date of April 15, 2019 and which bore interest at the same rates described above, and to pay related fees and expenses. We used the remaining $240.0 million in proceeds to fund our NuLink acquisition and to redeem a portion of our 13.38% Senior Subordinated Notes, as described above. The Company recorded a loss on extinguishment of debt of $10.5 million during the year ended December 31, 2016, primarily representing the expensing of the unamortized debt issuance costs related to a portion of the former Term B Loans.

Refinancing of Term B Loans and Payoff of Term B-1 Loans

        On May 11, 2016, the Company entered into a fifth amendment (the "Fifth Amendment") to its Credit Agreement, dated as of July 17, 2012, as amended on April 1, 2013, November 27, 2013, May 21, 2015 and July 1, 2015 (the "Original Credit Agreement") among the Company and the other parties thereto.

        The Fifth Amendment, among other provisions, provides for the addition of an incremental $432.5 million in new Term B Loans, which had a maturity date in April 2019 and which bore interest, at the Company's option, at LIBOR plus 3.50% or ABR plus 2.50% and included a 1.00% LIBOR floor. Proceeds from the issuance of the new Term B Loans were used to repay all remaining $382.5 million outstanding principal under the Company's Term B-1 Loans which had a maturity date of July 2017 and which bore interest, at the Company's option, at LIBOR plus 3.00% or ABR plus 2.00% and which included a 0.75% LIBOR floor, and to pay related fees and expenses. The Company recorded a loss on extinguishment of debt of $2.5 million during the year ended December 31, 2016, primarily representing the expensing of the unamortized debt issuance costs related to a portion of the former Term B-1 Loans.

Revolver Extension

        On July 1, 2015, the Company entered into a fourth amendment ("Fourth Amendment") to the Original Credit Agreement among the Company and the other parties thereto. On August 19, 2016, the Company entered into a sixth amendment (the "Sixth Amendment") to the Original Credit Agreement among the Company and the other parties thereto.

        Under the Company's Original Credit Agreement, dated as of July 17, 2012 (the "Original Credit Agreement"), and as subsequently amended, among the Company and the other parties thereto, the Company had $200.0 million of borrowings available under its revolving credit facility (the "Revolver"), which was to mature on July 17, 2017. Under the Fourth Amendment and the Sixth Amendment, the maturity date for $180.0 million of the $200.0 million in available borrowings under the Revolver was extended until July 1, 2020, subject to the following: (a) on January 1, 2019, if any indebtedness incurred to refinance the term loans outstanding prior to the effectiveness of the Sixth Amendment is outstanding and has a maturity date prior to September 30, 2020, the Revolver will instead mature on January 1, 2019, and (b) on April 15, 2019, if (i) the Company has Senior Unsecured Notes outstanding or (ii) any indebtedness (other than indebtedness incurred under the Credit Agreement) incurred to refinance the Senior Unsecured Notes is outstanding and has a maturity date prior to November 28, 2023, the Revolver will instead mature on April 15, 2019.

        In addition, in the event the Company has outstanding borrowings under the Revolver in excess of $180.0 million as of July 17, 2017, the Company will be required to pay down such borrowings to the extent of such excess.

Critical Accounting Policies and Estimates

        In the preparation of our consolidated financial statements, we are required to make estimates, judgments and assumptions that we believe are reasonable based upon the information available, in accordance with accounting principles generally accepted in the United States of America ("GAAP").

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The estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Critical accounting policies are defined as those policies that are reflective of significant judgments, estimates and uncertainties, which would potentially result in materially different results under different assumptions and conditions. We believe the following accounting policies are the most critical in the preparation of our consolidated financial statements because of the judgment necessary to account for these matters and the significant estimates involved, which are susceptible to change.

Valuation of Plant, Property and Equipment and Intangible Assets

        Carrying Value.     The aggregate carrying value of our plant, property and equipment and intangible assets (including franchise operating rights and goodwill) comprised approximately 93% and 95% of our total assets at March 31, 2017 and December 31, 2016, respectively.

        Plant, property and equipment are recorded at cost and include costs associated with the construction of cable transmission and distribution facilities and new service installations at customer locations. Capitalized costs include materials, labor and certain indirect costs attributable to the capitalization activity. Maintenance and repairs are expensed as incurred. Upon sale or retirement of an asset, the cost and related depreciation are removed from the related accounts, and resulting gains or losses are reflected in operating results. We make judgments regarding the installation and construction activities to be capitalized. We capitalize direct labor associated with capitalizable activities and indirect cost using standards developed from operational data, including the proportionate time to perform a new installation relative to the total technical operations activities and an evaluation of the nature of the indirect costs incurred to support capitalizable activities. Judgment is required to determine the extent to which indirect costs that have been incurred are related to capitalizable activities and, as a result, should be capitalized. Indirect costs include (i) employee benefits and payroll taxes associated with capitalized direct labor, (ii) direct variable cost of installation and construction vehicle costs, (iii) the direct variable costs of support personnel directly involved in assisting with installation activities, such as dispatchers and (iv) indirect costs directly attributable to capitalizable activities.

        Intangible assets consist primarily of acquired franchise operating rights, franchise-related customer relationships and goodwill. Franchise operating rights represent the value attributable to agreements with local franchising authorities, which allows access to homes in the public right of way. Our franchise operating rights were acquired through business combinations. We do not amortize cable franchise operating rights as we have determined that they have an indefinite life. Costs incurred in negotiating and renewing cable franchise agreements are expensed as incurred. Franchise-related customer relationships represent the value of the benefit to us of acquiring the existing cable subscriber base and are amortized over the estimated life of the subscriber base, generally four years, on a straight-line basis. Goodwill represents the excess purchase price over the fair value of the identifiable net assets we acquired in business combinations.

        Asset Impairments.     Long-lived assets, including plant, property and equipment and intangible assets subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected undiscounted cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying value of the asset.

        We evaluate the recoverability of our franchise operating rights at least annually on October 1, or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. Franchise operating rights are evaluated for impairment by comparing the carrying value of the intangible asset to its estimated fair value, utilizing both quantitative and qualitative methods. Qualitative analysis is performed for franchise assets in the event the previous analysis indicates that there is a significant margin between carrying value of franchise operating rights and estimated fair

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value of those rights, and that it is more likely than not that the estimated fair values equal or exceed carrying value. For franchise assets that undergo quantitative analysis, we calculate the fair value of franchise operating rights using the multi-period excess earnings method, an income approach, which calculates the value of an intangible asset by discounting its future cash flows. The fair value is determined based on estimated discrete discounted future cash flows attributable to each franchise operating right intangible asset using assumptions consistent with internal forecasts. Assumptions key in estimating fair value under this method include, but are not limited to, revenue and subscriber growth rates (less anticipated customer churn), operating expenditures, capital expenditures (including any build out), market share achieved, contributory asset charge rates, tax rates and discount rate. The discount rate used in the model represents a weighted average cost of capital and the perceived risk associated with an intangible asset such as our franchise operating rights. The estimates and assumptions made in our valuations are inherently subject to significant uncertainties, many of which are beyond our control, and there is no assurance that these results can be achieved. The primary assumptions for which there is a reasonable possibility of the occurrence of a variation that would significantly affect the measurement value include the assumptions regarding revenue growth, programming expense growth rates, the amount and timing of capital expenditures and the discount rate utilized. From a qualitative standpoint, we do not believe that any of our material franchise operating rights is at risk of impairment. Quantitatively, the percentages by which fair value exceeded carrying value are as follows:

Panama City, FL

    45%  

Montgomery, AL

    17%  

Huntsville, AL

    13%  

Dothan, AL

    18%  

        We conduct our cable operations under the authority of state cable television franchises, except in Alabama and parts of Michigan where we continue to operate under local franchises. Our franchises generally have service terms that last from five to 15 years, but we operate in some states that have perpetual terms. All of our term-limited franchise agreements are subject to renewal. The renewal process for our state franchises is specified by state law and tends to be a simple process, requiring the filing of a renewal application with information no more burdensome than that contained in our original application. Although renewal is not assured, there are provisions in the law that protect the Company from arbitrary or unreasonable denial. This is especially true for competitive cable providers like us. In most areas in which we operate, we are a "competitive" operator, meaning that we compete directly in the service area with at least one other franchised cable operator. The Cable Television Consumer Protection and Competition Act of 1992 (the "Cable Act") says that "a franchising authority may not...unreasonably refuse to award an additional competitive franchise." The Cable Act also provides a formal renewal process that protects cable operators against arbitrary or unreasonable refusals to renew a franchise. In those few areas where we operate under local franchises, we can use this formal renewal process if needed.

        In our experience, state and local franchising authorities encourage our entry into the market, as our competitive presence often leads to overall better service, more service options and lower prices. In our and our expert advisors' experience, it has not been the practice for a franchising authority to deny a cable franchise renewal. We have never had a renewal denied.

        We also, at least annually on October 1, evaluate our goodwill for impairment for each reporting unit (which generally are represented by geographical operations of cable systems managed by us), utilizing both quantitative and qualitative methods. Qualitative analysis is performed for franchise assets in the event the previous analysis indicates that there is a significant margin between carrying value of franchise operating rights and estimated fair value of those rights, and that it is more likely than not that the estimated fair value equals or exceeds carrying value. For our quantitative evaluation of our goodwill, we utilize both an income approach as well as a market approach. The income approach

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utilizes a discounted cash flow analysis to estimate the fair value of each reporting unit, while the market approach utilizes multiples derived from actual precedent transactions of similar businesses and market valuations of guideline public companies. In the event that the carrying amount exceeds the fair value, we would be required to estimate the fair value of the assets and liabilities of the reporting unit as if the unit was acquired in a business combination, thereby revaluing goodwill. Any excess of the carrying value of goodwill over the revalued goodwill would be expensed as an impairment loss. From a qualitative standpoint, we concluded that the goodwill of each reporting unit has not been impaired. From those reporting units where we performed a quantitative assessment, the percentages by which fair value exceeded carrying value are as follows:

Panama City, FL

    38%  

Montgomery, AL

    18%  

Huntsville, AL

    19%  

Dothan, AL

    55%  

Fair Value Measurements

        GAAP provides guidance for a framework for measuring fair value in the form of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Financial assets and liabilities are classified by level in their entirety based upon the lowest level of input that is significant to the fair value measurement. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability due to the fact there is no market activity. We record our interest rate swaps and interest rate caps at fair value on the balance sheet and perform recurring fair value measurements with respect to these derivative financial instruments. The fair value measurements of our interest rate swaps were determined using cash flow valuation models. The inputs to the cash flow models consist of, or are derived from, observable data for substantially the full term of the swaps. This observable data includes interest and swap rates, yield curves and credit ratings, which are retrieved from available market data. The valuations are then adjusted for our own nonperformance risk as well as the counterparty as required by the provisions of the authoritative guidance using a discounted cash flow technique that accounts for the duration of the interest rate swaps and our and the counterparty's risk profile. The fair value of the interest rate caps are calculated using a cash flow valuation model. The main inputs are obtained from quoted market prices, the LIBOR interest rate and the projected three months LIBOR. The observable market quotes are then input into the valuation and discounted to reflect the time value of cash.

        We also have non-recurring valuations primarily associated with (i) the application of acquisition accounting and (ii) impairment assessments, both of which require that we make fair value determinations as of the applicable valuation date. In making these determinations, we are required to make estimates and assumptions that affect the recorded amounts, including, but not limited to, expected future cash flows, market comparables and discount rates, remaining useful lives of long-lived assets, replacement or reproduction costs of property and equipment and the amounts to be recovered in future periods from acquired NOLs and other deferred tax assets. To assist us in making these fair value determinations, we may engage third-party valuation specialists. Our estimates in this area impact, among other items, the amount of depreciation and amortization, and any impairment charges that we may report. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain. A significant portion of our long-lived assets were initially recorded through the application of acquisition accounting, and all of our long-lived assets are subject to periodic or event-driven impairment assessments.

Legal and Other Contingencies

        Legal and other contingencies have a high degree of uncertainty. When a loss from a contingency becomes estimable and probable, a reserve is established. The reserve reflects management's best estimate of the probable cost of ultimate resolution of the matter and is revised as facts and circumstances change. A reserve is released when a matter is ultimately brought to closure, the statute of limitations lapses or facts and circumstances change. The actual costs of resolving a claim may be substantially different from the amount of reserve we recorded. In addition, in the normal course of business, we are subject to various other legal and regulatory claims and proceedings directed at or involving us, which in our opinion will not have a material adverse effect on our financial position or results of operations or liquidity.

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Programming Agreements

        We exercise significant judgment in estimating programming expense associated with certain video programming contracts. Our policy is to record video programming costs based on our contractual agreements with our programming vendors, which are generally multi-year agreements that provide for us to make payments to the programming vendors at agreed upon market rates based on the number of customers to which we provide the programming service. If a programming contract expires prior to the parties' entry into a new agreement and we continue to distribute the service, we estimate the programming costs during the period there is no contract in place. In doing so, we consider the previous contractual rates, inflation and the status of the negotiations in determining our estimates. When the programming contract terms are finalized, an adjustment to programming expense is recorded, if necessary, to reflect the terms of the new contract. We also make estimates in the recognition of programming expense related to other items, such as the accounting for free periods, timing of rate increases and credits from service interruptions, as well as the allocation of consideration exchanged between the parties in multiple-element transactions.

Income Taxes

        We account for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        As a result of the Restructuring, WOW! Finance became a single member LLC for U.S. federal income tax purposes. The Restructuring is treated as a change in tax status related to WOW! Finance, since a single member LLC is required to record current and deferred income taxes reflecting the results of its operations.

        From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. Examples of such transactions include business acquisitions and dispositions, including dispositions designed to be tax-deferred transactions for tax purposes, investments and certain financing transactions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. We prepare and file tax returns based on interpretations of tax laws and regulations. In the normal course of business, our tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax, interest and penalty assessments by these taxing authorities. In determining our income tax provision for financial reporting purposes, we establish a reserve for uncertain income tax positions unless such positions are determined to be more likely than not of being sustained upon examination, based on their technical merits, and, accordingly, for financial reporting purposes, we only recognize tax benefits taken on the tax return that we believe are more likely than not of being sustained. There is considerable judgment involved in determining whether positions taken on the tax return are more likely than not of being sustained.

        We adjust our tax reserve estimates periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The consolidated income tax provision of any given year includes adjustments to prior year income tax accruals that are considered appropriate and any related estimated interest. Our policy is to recognize, when applicable, interest and penalties on uncertain income tax positions as part of income tax provision.

Pre-Restructuring Valuation Allowance Calculation

        WOW! Finance was owned by several corporations ("Members") that filed their own federal and state income tax returns. The valuation allowance methodology for each of the Members was based on

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evaluating the outside basis difference related to each Member's investment in WOW! Finance to identify any naked credit deferred tax liability items. A naked credit item represents an instance in which a Member has a deferred tax liability related to an indefinite-lived asset i.e. book basis in goodwill which is not amortized for book purposes but is amortized for tax purposes. Also, the company has indefinite-lived intangibles such as franchise operating rights that are not amortized for book purposes. In other words, the reversal of these temporary items cannot be assured and thus cannot be a source of future income to utilize the Company's deferred tax assets.

        The portion of the deferred tax liability related to naked credit items will not be netted against the deferred tax asset in determining the amount of the valuation allowance to be retained. The Company recorded a valuation allowance of $267.9 million as of December 31, 2015.

Post-Restructuring Valuation Allowance Calculation

        As a result of restructuring, the Company will be filing a single federal consolidated income tax return that reflects WOW! Inc. as the consolidated group parent. The Company's deferred taxes include income tax attributes of the legacy Members which merged into the Company as part of the restructuring. These deferred taxes will also include the recalculated tax basis differences of the assets and liabilities of WOW! Finance that occurred as a result of the change in tax status of WOW! Finance.

        The Company's financial statements include a reported net deferred tax liability, excluding valuation allowance, of $205.9 million as of December 31, 2016. Included in this deferred tax liability are naked credit deferred tax liability items totaling $361.7 million. The portion of the deferred tax liability related to naked credit items cannot be assured and thus will not be available as a source of taxable income to utilize the deferred tax assets. Excluding the naked credit deferred tax liability, the Company's financial statements include a net deferred tax asset of $164.3 million. The Company has recorded a valuation allowance of $164.3 million as of December 31, 2016.

Homes Passed and Subscribers

        We report homes passed as the number of serviceable addresses such as single residence homes, apartments and condominium units, and businesses passed by our broadband network and listed in our database. We report total subscribers as the number of subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe. We define each of the individual HSD subscribers, Video subscribers and Telephony subscribers as a RGU. The following table summarizes homes passed, total subscribers and total RGUs for our services as of each respective date:

 
   
   
   
   
   
   
   
   
   
   
  Increase /
(Decrease)(6)(7)(8)
 
 
  Dec. 31,
2014
  Mar. 31,
2015
  Jun. 30,
2015
  Sep. 30,
2015
  Dec. 31,
2015
  Mar. 31,
2016(2)
  Jun. 30,
2016
  Sep. 30,
2016
  Dec. 31,
2016(3)(4)
  Mar. 31,
2017(5)
  Dec. 31,
2015 vs.
Dec. 31,
2016
  Mar. 31,
2016 vs.
Mar. 31,
2017
 

Homes passed

    2,985,000     2,988,600     2,993,100     2,997,200     3,003,100     3,010,700     3,022,800     3,075,000     3,094,300     3,047,800     91,200     37,100  

Total subscribers(1)

    809,100     799,200     787,100     781,700     777,800     784,600     785,600     800,800     803,400     780,100     25,600     (4,500 )

HSD RGUs

   
727,800
   
722,000
   
713,100
   
712,300
   
712,500
   
722,200
   
725,700
   
742,000
   
747,400
   
729,000
   
34,900
   
6,800
 

Video RGUs

    634,700     606,500     582,700     564,500     547,500     537,200     524,300     514,900     501,400     474,000     (46,100 )   (63,200 )

Telephony RGUs

    359,400     339,600     324,500     310,600     296,800     286,600     277,500     267,400     258,100     243,000     (38,700 )   (43,600 )

Total RGUs

    1,721,900     1,668,100     1,620,300     1,587,400     1,556,800     1,546,000     1,527,500     1,524,300     1,506,900     1,446,000     (49,900 )   (100,000 )

(1)
Defined as the number of subscribers who receive at least one of our HSD, Video or Telephony services, without regard to which or how many services they subscribe.

(2)
Includes the following homes passed and subscriber numbers related to our Lawrence, Kansas system which was divested on January 12, 2017: homes passed was 67,600; total subscribers was 31,200; HSD RGUs was 28,200; Video RGUs was 16,300; Telephony RGUs was 7,600; and Total RGUs was 52,100.

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(3)
Includes the following homes passed and subscriber numbers related to our NuLink acquisition which closed on September 9, 2016: homes passed was 35,700; total subscribers was 14,900; HSD RGUs was 13,400; Video RGUs was 9,400; Telephony RGUs was 3,400; and Total RGUs was 26,200.

(4)
Includes the following homes passed and subscriber numbers related to our Lawrence, Kansas system which was divested on January 12, 2017: homes passed was 68,000; total subscribers was 31,100; HSD RGUs was 28,500; Video RGUs was 15,000; Telephony RGUs was 7,000; and Total RGUs was 50,500.

(5)
Includes the following homes passed and subscriber numbers related to our NuLink acquisition which closed on September 9, 2016: homes passed was 35,900; total subscribers was 14,800; HSD RGUs was 13,400; Video RGUs was 9,200; Telephony RGUs was 3,300; and Total RGUs was 25,900.

(6)
Increase (decrease) in homes passed and subscriber numbers during the twelve months ended December 31, 2015 related to edge-outs is zero for all categories as investments in edge-outs did not begin until the fiscal year ended December 31, 2016.

(7)
Increase (decrease) in homes passed and subscriber numbers during the twelve months ended December 31, 2016 related to edge-outs includes the following; homes passed was 38,500; total subscribers was 8,900; HSD RGUs was 8,900; Video RGUs was 5,400; Telephony RGUs was 1,900; and Total RGUs was 16,200.

(8)
Increase (decrease) in homes passed and subscriber numbers during the twelve months ended March 31, 2017 related to edge-outs includes the following; homes passed was 48,000; total subscribers was 11,100; HSD RGUs was 11,100; Video RGUs was 6,500; Telephony RGUs was 2,200; and Total RGUs was 19,800.

        Subscriber information for acquired entities is preliminary and subject to adjustment until we have completed our review of such information and determined that it is presented in accordance with our policies. While we take appropriate steps to ensure subscriber information is presented on a consistent and accurate basis at any given balance sheet date, we periodically review our policies in light of the variability we may encounter across our different markets due to the nature and pricing of products and services and billing systems. Accordingly, we may from time to time make appropriate adjustments to our subscriber information based on such reviews.

        For the quarter ended March 31, 2017, total subscribers decreased by approximately 4,500 compared to the quarter ended March 31, 2016. Excluding the impact of the NuLink acquisition, the Lawrence disposition and edge-outs, total subscribers increased by approximately 800 over this period.

        For the quarter ended March 31, 2017, total HSD RGUs increased by approximately 6,800 compared to the quarter ended March 31, 2016. Excluding the impact of the NuLink acquisition, the Lawrence disposition and edge-outs, total HSD RGUs increased by approximately 10,500 over this period.

        For the quarter ended March 31, 2017, total Video RGUs decreased by approximately 63,200 compared to the quarter ended March 31, 2016. Excluding the impact of the NuLink acquisition, the Lawrence disposition and edge-outs, Video RGUs decreased by approximately 62,600 over this period.

        For the quarter ended March 31, 2017, total Telephony RGUs decreased by approximately 43,600 compared to the quarter ended March 31, 2016. Excluding the impact of the NuLink acquisition, the Lawrence disposition and edge-outs, total Telephony RGUs decreased by approximately 41,500 over this period.

        For the quarter ended March 31, 2017, total RGUs decreased by approximately 100,000 compared to the quarter ended March 31, 2016. Excluding the impact of the NuLink acquisition, the Lawrence disposition and edge-outs, total RGUs decreased by approximately 93,600 over this period.

        For the year ended December 31, 2016, total subscribers increased by approximately 25,600 compared to the year ended December 31, 2015. Excluding the impact of the NuLink acquisition and edge-outs, total subscribers increased by approximately 1,800 over this period.

        For the year ended December 31, 2016, total HSD RGUs increased by approximately 34,900 compared to the year ended December 31, 2015. Excluding the impact of the NuLink acquisition and edge-outs, total HSD RGUs increased by approximately 12,600 over this period.

        For the year ended December 31, 2016, total Video RGUs decreased by approximately 46,100. Excluding the impact of the NuLink acquisition and edge-outs, Video RGUs decreased by approximately 60,900 over this period.

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        For the year ended December 31, 2016, total Telephony RGUs decreased by approximately 38,700. Excluding the impact of the NuLink acquisition and edge-outs, total Telephony RGUs decreased by approximately 44,000 over this period.

        For the year ended December 31, 2016, total RGUs decreased by approximately 49,900. Excluding the impact of the NuLink acquisition and edge-outs, total RGUs decreased by approximately 92,300 over this period.

Financial Statement Presentation

        Our operating revenue is primarily derived from monthly charges for HSD, Video, Telephony and other services to residential and business services customers, in addition to advertising and other revenues.

        Revenues attributable to monthly subscription fees charged to customers for our HSD, Video and Telephony services provided by our cable systems were 87%, 89% and 90% for the years ended December 31, 2016, 2015 and 2014, respectively. Historically, these customer relationships could be discontinued by the customer at any time without penalty. Beginning in March 2016, we began offering one and two year contracts that contain early termination fees upon cancellation prior to the contact terms. The remaining approximately 10% of non-subscription revenue is derived primarily from advertising revenues, franchise and other regulatory fee revenues (which are collected by us but then paid to local authorities), installation fees and commissions related to the sale of merchandise by home shopping services.

        Our expenses primarily consist of operating, selling, general and administrative expenses, depreciation and amortization expense, interest expense and realized and unrealized gain on derivative instruments, net.

         Operating expenses primarily include programming costs, data costs, transport costs and network access fees related to our HSD and Telephony services, cable service related expenses, costs of dark fiber sales, network operations and maintenance services, customer service and call center expenses, bad debt, billing and collection expenses and franchise and other regulatory fees.

         Selling, general and administrative expenses primarily include salaries and benefits of corporate and field management, sales and marketing personnel, human resources and related administrative costs.

        Operating and selling, general and administrative expenses exclude depreciation and amortization expense, which is presented separately in the accompanying consolidated statement of operations.

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         Depreciation and amortization expenses include depreciation of our broadband networks and equipment, buildings and leasehold improvements and amortization of other intangible assets with definite lives primarily related to acquisitions.

         Realized and unrealized gain on derivative instruments, net includes adjustments to fair value for the various interest rate swaps and caps we enter on the required portions of our outstanding variable debt. As we do not use hedge accounting for financial reporting purposes, the adjustment to fair value of our interest rate swaps and caps are recorded to earnings at the end of each reporting period.

        We control our costs of operations by maintaining strict controls on expenditures. More specifically, we are focused on managing our cost structure by improving workforce productivity, increasing the effectiveness of our purchasing activities and maintaining discipline in customer acquisition. We expect programming expenses to continue to increase due to a variety of factors, including increased demands by owners of some broadcast stations for carriage of other services, payments to those broadcasters for retransmission consent and annual increases imposed by programmers with additional selling power as a result of media consolidation. We have not been able to fully pass these increases on to our customers without the loss of customers nor do we expect to be able to do so in the future.

Results of Operations

Three months ended March 31, 2017 compared to the three months ended March 31, 2016.

 
  Three months ended March 31,   Change  
 
  2017   2016   $   %  

Revenue

  $ 300.0   $ 302.3   $ (2.3 )     *

Costs and expenses:

                         

Operating (excluding depreciation and amortization)

    159.8     164.5     (4.7 )   (3 )%

Selling, general and administrative

    30.3     26.0     4.3     17 %

Depreciation and amortization

    50.3     52.5     (2.2 )   (4 )%

Management fee to related party

    0.5     0.4     0.1     25 %

    240.9     243.4     (2.5 )     *

Income from operations

    59.1     58.9     0.2       *

Other income (expense):

                         

Interest expense

    (45.7 )   (54.2 )   8.5     16 %

Loss on early extinguishment of debt

    (5.0 )       (5.0 )     *

Gain on sale of assets

    38.7         38.7       *

Realized and unrealized gain on derivative instruments, net

        1.1     (1.1 )     *

Other income, net

    1.4         1.4       *

Income before provision of income taxes

    48.5     5.8     42.7       *

Income tax benefit (expense)

    23.9     (1.5 )   25.4        

Net income

  $ 72.4   $ 4.3   $ 68.1       *

*
Not meaningful

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    Revenue

        Revenue for the three months ended March 31, 2017 decreased $2.3 million as compared to revenue for the three months ended March 31, 2016 as follows:

 
  Three months ended March 31,   Change  
 
  2017   2016   $   %  
 
   
  (in millions)
 

Residential subscription

  $ 232.4   $ 240.5   $ (8.1 )   (3 )%

Business services subscription

    28.1     25.8     2.3     9 %

Total subscription

    260.5     266.3     (5.8 )   (2 )%

Other business services

    11.1     8.2     2.9     35 %

Other

    28.4     27.8     0.6     2 %

  $ 300.0   $ 302.3   $ (2.3 )     *

*
Not meaningful

        Total subscription revenue decreased $5.8 million, or 2%, during the three months ended March 31, 2017, compared to the three months ended March 31, 2016. Approximately $17.5 million of the decrease is a result of year over year reductions in average total revenue generating units ("RGUs") and $8.8 million is related to the disposition of our Lawrence, Kansas system on January 12, 2017. Offsetting these decreases was a $15.1 million increase in total subscription revenue as a result of increases in the average revenue per unit ("ARPU") of our customer base, which is calculated as subscription revenue for each of the HSD, Video and Telephony services divided by the average total RGUs for each service category for the respective period which was driven by customer rate increases to offset the rising cost of programming per subscriber. Additionally, we had an increase of $5.4 million of subscription revenue generated from our NuLink acquisition on September 9, 2016.

        The increase in other business services revenue of $2.9 million, or 35%, is primarily due to revenue generated by our network construction activities and increases in our recurring revenue related to our fiber network.

        The following table details subscription revenue by service offering for the three months ended March 31, 2017 and March 31, 2016:

 
  Three months ended March 31,    
   
 
 
  2017   2016   Subscription
Revenue
Change
 
 
  Subscription
Revenue, $
  Average RGUs(1)   Subscription
Revenue, $
  Average RGUs(1)  
 
  $   %  
 
  (in millions)
  (in thousands)
  (in millions)
  (in thousands)
   
   
 

HSD subscription

  $ 96.9     738.2   $ 90.8     717.3   $ 6.1     7 %

Video subscription

    128.7     487.7     134.8     542.4     (6.1 )   (5 )%

Telephony subscription

    34.9     250.5     40.7     291.7     (5.8 )   (14 )%

  $ 260.5         $ 266.3         $ (5.8 )   (2 )%

(1)
Average subscribers is presented in thousands and is calculated based on reported subscribers and is not adjusted for changes related to the disposition of our Lawrence, Kansas system and acquisition of NuLink. Adjusted for Lawrence and NuLink, average RGUs for the period March 31, 2017, are 710.6, 470.9 and 243.6 for HSD, Video and Telephony, respectively. As of March 31, 2016, adjusted for Lawrence and NuLink, average RGUs are 689.2, 525.8 and 284.0 for HSD, Video and Telephony, respectively.

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        HSD subscription revenue increased $6.1 million, or 7%, during the three months ended March 31, 2017, compared to the three months ended March 31, 2016. The increase in HSD subscription revenue is primarily attributable to a $2.8 million increase in average HSD RGUs, a $4.4 million year over year increase in HSD ARPU and a $2.7 million increase in HSD subscription revenue related to our NuLink acquisition on September 9, 2016. Partially offsetting the overall increase was a $3.8 million decrease related to the disposition of our Lawrence, Kansas system on January 12, 2017.

        Video subscription revenue decreased $6.1 million, or 5%, during the three months ended March 31, 2017, compared to the three months ended March 31, 2016. The decrease is primarily attributable to a year over year decrease of $14.7 million related to a decline in average Video RGU's and $3.9 million related to the disposition of our Lawrence, Kansas system on January 12, 2017. Partially offsetting the overall decrease was a $10.4 million increase year over year in Video ARPU and a $2.1 million increase in video subscription revenue related to our NuLink acquisition on September 9, 2016.

        Telephony subscription revenue decreased $5.8 million, or 14%, during the three months ended March 31, 2017, compared to the three months ended March 31, 2016. The decrease is attributable to a $5.7 million decrease related to a year over year decline in average Telephony RGUs and a $1.1 million decrease related to the disposition of our Lawrence, Kansas system on January 12, 2017. Partially offsetting these decreases was a $0.4 million increase in year over year Telephony ARPU and a $0.6 million increase in Telephony subscription revenue related to our NuLink acquisition on September 9, 2016.

        Operating expenses (excluding depreciation and amortization) decreased $4.7 million, or 3%, in the three months ended March 31, 2017, as compared to the three months ended March 31, 2016. The decrease is primarily due to decreased Video programming costs and direct Telephony costs that correlate to the decreases in Video and Telephony RGUs and overall reduced costs from the disposition of our Lawrence, Kansas system. In addition, lower customer bad debt contributed to the decrease along with lower employee health benefits costs. Partially offsetting the decreases were increases in vehicle fleet costs and increased costs related to our network construction costs. Due to the nature of these construction contracts, we record this expense as a pass-through with the corresponding offset in our other business service revenue.

        A presentation of Incremental contribution is included below but is a measure that is not recognized under GAAP.

        Incremental contribution is included herein because we believe that it is a key metric used by our management to assess the financial performance of the business by showing how the relative relationship of the various components of subscription services contributes to our overall consolidated historical results. We define incremental contribution as the components of subscription revenue, less costs directly incurred from third parties in connection with the provision of such services to our customers.

        Incremental contribution is not made in accordance with GAAP and our use of the term incremental contribution varies from others in our industry. Incremental contribution has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP as it does not identify or allocate any other operating costs and expenses that are components of our Income from Operations to specific subscription revenues as we do not measure or record such costs and expenses in a manner that would allow attribution to a specific component of subscription revenue. Accordingly, incremental contribution should not be considered as an alternative to operating income or any other performance measures derived in

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accordance with GAAP as measures of operating performance or operating cash flows, or as measures of liquidity.

        The following tables provide the most comparable GAAP measurements (i.e. Total Revenue and Operating Expenses (excluding depreciation and amortization)) for the period ended March 31, 2017 and March 31, 2016:

 
  Three months ended
March 31,
 
(in millions)
  2017   2016  

Total revenue

  $ 300.0   $ 302.3  

Total operating expense (excluding depreciation and amortization)

    159.8     164.5  

        Incremental contribution and incremental contribution margin for the provision of such services for the three months ended March 31, 2017 and 2016 are as follows:

 
  Three Months
Ended
March 31,
  Change  
 
  2017   2016   $   %  
 
  (in millions)
 

HSD subscription revenue

  $ 96.9   $ 90.8   $ 6.1     7 %

HSD expenses(1)

    3.3     3.5     (0.2 )   (6 )%

HSD incremental contribution

  $ 93.6   $ 87.3   $ 6.3        

HSD incremental contribution margin

    96.6%     96.1%              

 

 
  Three Months
Ended
March 31,
  Change  
 
  2017   2016   $   %  
 
  (in millions)
 

Video subscription revenue

  $ 128.7   $ 134.8   $ (6.1 )   (5 )%

Video expenses(2)

    88.8     90.8     (2.0 )   (2 )%

Video incremental contribution

  $ 39.9   $ 44.0   $ (4.1 )      

Video incremental contribution margin

    31.0%     32.6%              

 

 
  Three Months Ended March 31,   Change  
 
  2017   2016   $   %  
 
  (in millions)
 

Telephony subscription revenue

  $ 34.9   $ 40.7   $ (5.8 )   (14 )%

Telephony expenses(3)

    3.3     4.3     (1.0 )   (23 )%

Telephony incremental contribution

  $ 31.6   $ 36.4   $ (4.8 )      

Telephony incremental contribution margin

    90.5%     89.4%              

*
Not meaningful.

(1)
HSD expenses represent costs incurred from third-party vendors related to maintaining our network and Internet connectivity fees.

(2)
Video expenses represent fees paid to content providers for programming.

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(3)
Telephony expenses represent costs incurred from third-party providers for leased circuits, interconnectivity and switching costs.

        The following tables provide a reconciliation of the separate elements comprising incremental contribution to each of their respective most comparable GAAP measurements (i.e. Revenue and Operating Expenses (excluding depreciation and amortization)) for the period ended March 31, 2017 and March 31, 2016:

 
  Three months
ended
March 31,
 
(in millions)
  2017   2016  

Subscription Revenue

             

HSD

  $ 96.9   $ 90.8  

Video

    128.7     134.8  

Telephony

    34.9     40.7  

Other revenue

    39.5     36.0  

Total revenue

  $ 300.0   $ 302.3  

Third-party direct operating expenses excluding depreciation and amortization

             

HSD

    3.3     3.5  

Video

    88.8     90.8  

Telephony

    3.3     4.3  

Operating expense, other than third-party direct expenses, that are not allocated (excluding depreciation and amortization)(1)

    64.4     65.9  

Total operating expense (excluding depreciation and amortization)

    159.8     164.5  

Selling, general and administrative(1)

    30.3     26.0  

Depreciation and amortization(1)

    50.3     52.5  

Management fee to related party(1)

    0.5     0.4  

  $ 240.9   $ 243.4  

(1)
Operating expenses (other than third-party direct expenses excluding depreciation and amortization); Selling, general and administrative; depreciation and amortization; and management fees to related party are not allocated by product or location for either internal or external reporting.

        Selling, general and administrative expenses increased $4.3 million, or 17%, in the three months ended March 31, 2017, as compared to the three months ended March 31, 2016. The increases are mainly due to higher employee related costs, as well as overhead costs related to our NuLink acquisition. Partially offsetting these increases were overall reduction in expenses related to our Lawrence, Kansas system disposition.

        Depreciation and amortization expenses decreased $2.2 million, or 4%, in the three months ended March 31, 2017, as compared to the three months ended March 31, 2016. The decrease is primarily due to certain intangible assets related to our acquisitions becoming fully amortized and the disposition of our Lawrence, Kansas system.

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        We pay a quarterly management fee of approximately $0.4 million per quarter plus any travel and miscellaneous expenses to Avista and Crestview.

        Interest expense decreased $8.5 million, or 16%, in the three months ended March 31, 2017, as compared to the three months ended March 31, 2016. The decrease resulted from lower outstanding debt and a lower blended rate on our overall debt, mainly due to the early extinguishment of our 13.38% Senior Subordinated Notes during the latter part of 2016.

        On January 12, 2017, we sold our Lawrence, Kansas system to MidCo for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the Agreement. We recorded a gain on sale of $38.7 million, subject to certain normal and customary purchase price adjustments set forth in the agreement. We also entered into a transition services agreement under which we will provide certain services to MidCo on a transitional basis. Charges for the transition services generally allow us to fully recover all allowed costs and allocated expenses incurred in connection with providing these services, generally without profit.

        We reported total income tax benefit (expense) of $23.9 million and ($1.5) million during the quarters ended March 31, 2017 and 2016, respectively. On January 12, 2017, the Company and MidCo consummated the Asset Purchase Agreement under which MidCo acquired the Company's Lawrence, Kansas system, for gross proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. As a result of the Lawrence sale, the Company has recorded an associated $11.3 million of income tax benefit. In addition, a deferred income tax benefit of $37.8 million was recognized as a result in the change of valuation allowance. The change of valuation allowance was due primarily to the utilization of NOLs from the disposal of indefinite lived assets related to the Lawrence sale transaction.

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    Yearly Comparison

Year Ended December 31, 2016 Compared to Year Ended December 31, 2015

 
  Year Ended
December 31,
  Change  
 
  2016   2015   $   %  
 
  (in millions)
 

Revenue

  $ 1,237.0   $ 1,217.1   $ 19.9     2 %

Costs and expenses:

                         

Operating (excluding depreciation and amortization)

    668.3     678.6     (10.3 )   (2 )%

Selling, general and administrative

    116.4     110.6     5.8     5 %

Depreciation & amortization

    207.0     221.1     (14.1 )   (6 )%

Management fee to related party

    1.7     1.9     (0.2 )   (11 )%

    993.4     1,012.2     (18.8 )   (2 )%

Income from operations

    243.6     204.9     38.7     19 %

Other income (expense):

                         

Interest expense

    (211.1 )   (226.0 )   14.9     7 %

Realized and unrealized gain on derivative instruments, net              

    2.3     5.6     (3.3 )   (59 )%

Loss on early extinguishment of debt

    (38.0 )   (22.9 )   (15.1 )   (66 )%

Other (expense) income, net

    2.2     (0.4 )   2.6       *

Loss before provision for income taxes

    (1.0 )   (38.8 )   37.8     97 %

Income tax benefit (expense)

    27.3     (9.9 )   37.2       *

Net income (loss)

  $ 26.3   $ (48.7 ) $ 75.0       *

*
Not meaningful.

    Revenue

        Revenue for the year ended December 31, 2016 increased $19.9 million, or 2%, compared to revenue for the year ended December 31, 2015.

 
  Year Ended
December 31,
  Change  
 
  2016   2015   $   %  
 
  (in millions)
 

Residential subscription

  $ 966.3   $ 987.3   $ (21.0 )   (2 )%

Business services subscription

    109.1     99.7     9.4     9 %

Total subscription

    1,075.4     1,087.0     (11.6 )   (1 )%

Other business services

    45.6     24.0     21.6     90 %

Other

    116.0     106.1     9.9     9 %

  $ 1,237.0   $ 1,217.1   $ 19.9     2 %

        Total subscription revenue for the year ended December 31, 2016 declined $11.6 million, or 1%, compared to the year ended December 31, 2015. Of this decline, approximately $102.7 million was attributable to a decrease in the average billable RGUs for the year compared to the year ended December 31, 2015 as we continue to see decreased subscriptions of Video and Telephony services among our customer base. Partially offsetting this decrease was an $84.7 million increase attributable to the increase in the ARPU of our customer base, which is calculated as subscription revenue for each of the HSD, Video and Telephony services divided by the average total RGUs for each service category for the respective period, which was driven by customer rate increases to offset the rising cost of

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programming per subscriber. Additionally, we had an overall increase in subscription revenue of $6.4 million attributable to our NuLink acquisition.

        Other business services revenue for the year ended December 31, 2016 increased $21.6 million, or 90%, compared to the year ended December 31, 2015. The increase in other business services revenue is primarily due to non-recurring revenue generated by our network construction activities and increases in our recurring revenue related to our fiber network.

        The increase in other revenue of $9.9 million, or 9%, is partially due to increases in advertising revenue.

        The following table details subscription revenue and average RGUs, by service offering for the years ended December 31, 2016 and December 31, 2015:

 
  Year Ended
December 31,
  Subscription
Revenue

 
 
  2016   2015   Change  
 
  Subscription
Revenue, $
  Average RGUs(1)   Subscription
Revenue, $
  Average RGUs(1)   $   %  
 
  (in millions)
  (in thousands)
  (in millions)
  (in thousands)
   
   
 

HSD subscription

  $ 373.1     729.9   $ 351.9     720.2   $ 21.2     6 %

Video subscription

    547.1     524.4     547.4     591.1     (0.3 )     *

Telephony subscription

    155.2     277.5     187.7     328.1     (32.5 )   (17 )%

  $ 1,075.4         $ 1,087.0         $ (11.6 )   (1 )%

*
Not meaningful.

(1)
Average subscribers is presented in thousands and is calculated based on reported subscribers and is not adjusted for changes related to our acquisition of NuLink. Adjusted for NuLink, average RGUs for the period December 31, 2016 are 723.2, 519.7 and 275.8 for HSD, Video and Telephony, respectively. As of December 31, 2015, adjusted for NuLink, average RGUs are 720.2, 591.1 and 328.1 for HSD, Video and Telephony, respectively.

        HSD subscription revenue increased $21.2 million, or 6%, during the year ended December 31, 2016 compared to the year ended December 31, 2015. The increase in HSD subscription revenue is primarily attributable to a $16.1 million increase year over year in HSD ARPU, a $1.5 million increase related to a year over year increase in average HSD RGUs and an increase of $3.6 million in HSD subscription revenue related to our NuLink acquisition.

        Video subscription revenue decreased $0.3 million, during the year ended December 31, 2016 compared to the year ended December 31, 2015. The decrease is primarily attributable to a year over year decrease of $74.7 million in Video RGUs. This decrease was offset by an increase of $72.0 million in Video ARPU and a $2.4 million increase in Video subscription revenue related to our NuLink acquisition.

        Telephony subscription revenue decreased $32.5 million, or 17%, during the year ended December 31, 2016 compared to the year ended December 31, 2015. The decrease is primarily attributable to a $29.4 million decrease year over year in Telephony RGUs and $3.5 million decrease year over year in Telephony ARPU. Partially offsetting these decreases was an increase of $0.4 million in Telephony subscription revenue related to our NuLink acquisition.

    Operating Expenses (Excluding Depreciation and Amortization)

        Operating expenses (excluding depreciation and amortization) decreased $10.3 million, or 2%, for the year ended December 31, 2016, as compared to the year ended December 31, 2015. The decreases are primarily due to decreased Video programming costs that correlate to the decreases in Video RGUs. As we lose a Video RGU, we no longer incur the programming expenses associated with

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providing such services to that customer. As a result, Programming costs for the year ended December 31, 2016 were $358.4 million, compared to $374.1 million for the year ended December 31, 2015, representing a decrease of $15.7 million, or 4.2%. In addition, we experienced a decrease in our customer bad debt expense when compared to the prior year ended December 31, 2015. Partially offsetting these decreases were increases in employee related costs, the NuLink acquisition and increased costs related to our network construction activities when compared to the prior year ended December 31, 2015. Due to the nature of our construction contracts, we record this expense as a pass-through with the corresponding offset in our other business services revenue.

        A presentation of incremental contribution is included below but is a measure that is not recognized under GAAP.

        Incremental contribution is included herein because we believe that it is a key metric used by our management to assess the financial performance of the business by showing how the relative relationship of the various components of subscription services contributes to our overall consolidated historical results. We define incremental contribution as the components of subscription revenue, less costs directly incurred from third parties in connection with the provision of such services to our customers.

        Incremental contribution is not made in accordance with GAAP and our use of the term incremental contribution varies from others in our industry. Incremental contribution has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP as it does not identify or allocate any other operating costs and expenses that are components of our Income from Operations to specific subscription revenues as we do not measure or record such costs and expenses in a manner that would allow attribution to a specific component of subscription revenue. Accordingly, incremental contribution should not be considered as an alternative to operating income or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows, or as measures of liquidity.

        The following tables provide the most comparable GAAP measurements (i.e. Total Revenue and Operating Expenses (excluding depreciation and amortization)) for the period ended December 31, 2016 and December 31, 2015:

 
  Year ended
December 31,
 
(in millions)
  2016   2015  

Total revenue

  $ 1,237.0   $ 1,217.1  

Total operating expense (excluding depreciation and amortization)

    668.3     678.6  

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        Incremental contribution and incremental contribution margin for the years ended December 31, 2016 and December 31, 2015 are as follows:

 
  Year Ended
December 31,
  Change  
 
  2016   2015   $   %  
 
  (in millions)
 

HSD subscription revenue

  $ 373.1   $ 351.9   $ 21.2     6 %

HSD expenses(1)

    14.6     13.1     1.5     11 %

HSD incremental contribution

  $ 358.5   $ 338.8   $ 19.7        

HSD incremental contribution margin

    96.1%     96.2%              

 

 
  Year Ended
December 31,
  Change  
 
  2016   2015   $   %  
 
  (in millions)
 

Video subscription revenue

  $ 547.1   $ 547.4   $ (0.3 )     *

Video expenses(2)

    358.4     374.1     (15.7 )   (4 )%

Video incremental contribution

  $ 188.7   $ 173.3   $ 15.4        

Video incremental contribution margin

    34.5%     31.7%              

 

 
  Year Ended
December 31,
  Change  
 
  2016   2015   $   %  
 
  (in millions)
 

Telephony subscription revenue

  $ 155.2   $ 187.7   $ (32.5 )   (17 )%

Telephony expenses(3)

    17.0     22.7     (5.7 )   (25 )%

Telephony incremental contribution

  $ 138.2   $ 165.0   $ (26.8 )      

Telephony incremental contribution margin

    89.0%     87.9%              

*
Not meaningful.

(1)
HSD expenses represent costs incurred from third-party vendors related to maintaining our network and Internet connectivity fees.

(2)
Video expenses represent fees paid to content providers for programming.

(3)
Telephony expenses represent costs incurred from third-party providers for leased circuits, interconnectivity and switching costs.

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        The following tables provide a reconciliation of the separate elements comprising incremental contribution to each of their respective most comparable GAAP measurements (i.e. Revenue and Operating Expenses (excluding depreciation and amortization)) for the period ended December 31, 2016 and December 31, 2015:

 
  Year ended December 31,  
(in millions)
  2016   2015  

Subscription Revenue

             

HSD

  $ 373.1   $ 351.9  

Video

    547.1     547.4  

Telephony

    155.2     187.7  

Other revenue

    161.6     130.1  

Total revenue

  $ 1,237.0   $ 1,217.1  

Third-party direct operating expenses excluding depreciation and amortization

             

HSD

    14.6     13.1  

Video

    358.4     374.1  

Telephony

    17.0     22.7  

Operating expense, other than third-party direct expenses, that are not allocated (excluding depreciation and amortization)(1)

    278.3     268.7  

Total operating expense (excluding depreciation and amortization)

    668.3     678.6  

Selling, general and administrative(1)

    116.4     110.6  

Depreciation and amortization(1)

    207.0     221.1  

Management fee to related party(1)

    1.7     1.9  

  $ 993.4   $ 1,012.2  

(1)
Operating expenses (other than third-party direct expenses excluding depreciation and amortization); Selling, general and administrative; depreciation and amortization; and management fees to related party are not allocated by product or location for either internal or external reporting.

    Selling, General and Administrative Expenses

        Selling, general and administrative expenses increased $5.8 million, or 5%, in the year ended December 31, 2016, as compared to the year ended December 31, 2015. The increases are primarily due to increases in our sales and marketing efforts and employee related costs, as well as overall cost related to our NuLink acquisition.

    Depreciation and Amortization

        Depreciation and amortization expenses decreased $14.1 million, or 6%, in the year ended December 31, 2016, as compared to the year ended December 31, 2015. The decrease is primarily due to certain intangible assets related to our acquisitions becoming fully amortized and an increase in retirements of fully depreciated assets during the year ended December 31, 2016.

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    Management Fee to Related Party

        We pay a quarterly management fee of $0.4 million plus any travel and miscellaneous expenses equally to Avista and Crestview. No management fees were paid to Crestview in 2015.

    Interest Expense

        Interest expense decreased $14.9 million, or 7%, in the year ended December 31, 2016, as compared to the year ended December 31, 2015. The decrease resulted from lower average outstanding debt and lower interest rates in connection with the refinancing of our Term B loans and the retirement of our higher interest rate Senior Subordinated Debt during the year ended December 31, 2016.

    Realized and Unrealized Gain on Derivative Instruments, Net

        Realized and unrealized gain on derivative instruments was $2.3 million and $5.6 million for the years ended December 31, 2016 and 2015, respectively. As we do not use hedge accounting for financial reporting purposes, the adjustments to fair value of our interest rate swaps and caps are recorded to earnings at the end of each reporting period. Our interest rate swap expired on July 1, 2016.

    Loss on Early Extinguishment of Debt

        In connection with our Sixth Amendment and Fifth Amendment to our Credit Agreement related to the refinancing of our Term B loans, we recorded a loss on extinguishment of debt of $16.8 million during the year ended December 31, 2016, representing the expensing of third-party arranger fees and write-off of unamortized deferred financing costs. Additionally, on December 18, 2016, September 15, 2016 and July 15, 2016, we made principal payments on our Senior Subordinated Notes and recorded a loss on extinguishment of debt in the amount of $21.2 million, representing early prepayment penalties and write-off of deferred financing costs.

        In connection with our May 21, 2015 Third Amendment refinancing of our Term B loans, we recorded a loss on extinguishment of debt, representing the expensing of prior deferred financing costs of $22.9 million during the year ended December 31, 2015.

    Other (Expense) Income, net

        Other income (expense), net increased $2.6 million for the year ended December 31, 2016 when compared to the same period ended December 31, 2015. During the year ended December 31, 2016, we sold our investment in Tower Cloud Inc. ("Tower Cloud") and recorded a gain on the sale of $2.2 million. In connection with the sale of our investment in Tower Cloud, we may realize future earn-out consideration over the next three years ranging from zero to $10.7 million, dependent upon Tower Cloud's ability to consummate certain transactions. There can be no assurances, however, that we will realize any of this future earn-out consideration.

    Income Taxes Benefit (Expense)

        The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        As a result of the Restructuring, WOW! Finance became a single member LLC for U.S. federal income tax purposes. The Restructuring is treated as a change in tax status related to WOW! Finance,

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since a single member LLC is required to record current and deferred income taxes reflecting the results of its operations. We do not anticipate that the Restructuring will have any significant impact on future operating cash flows, however, as WOW! has NOL carryforwards that would significantly reduce any required prospective tax payments.

        The Company reported a total income tax benefit of $27.3 million during the fiscal year ended December 31, 2016. The change in WOW! Finance's tax status related to the Restructuring resulted in a deferred tax expense of $57.7 million during the fiscal year ended December 31, 2016. The $57.7 million consisted of $138.9 million in additional deferred tax liabilities that were required as a result of the change in tax status, $14.1 million in additional deferred tax liabilities that were recorded due to state income tax rate impacts and a deferred tax benefit of $95.3 million related to the removal of existing deferred tax liabilities attributable to the Company's investment in C corporation subsidiaries. In addition, as a result of the WOW! Finance's change in tax status, the Company recorded a deferred tax benefit of $103.6 million due to a reversal of a portion of its existing valuation allowance.

        At December 31, 2016, the Company had available federal NOL carryforwards of approximately $833.8 million that expire between 2023 and 2036. We expect to utilize between approximately $110 million and $130 million of our NOL carryforwards during 2017 due to the sale of our Lawrence system which closed on January 12, 2017, subject to finalization. Approximately $146.0 million of this NOL carryforward is subject to an annual utilization limitation under Section 382 due to one or more changes in ownership of Knology as of the date of the Company's acquisition of Knology in 2012. The Company has analyzed the potential Section 382 limitation on its NOL carryforwards and determined that, although $146.0 million of this carryforward relating to Knology is subject to an annual Section 382 limitation, based on the fair market value of Knology at the time of the Company's acquisition of Knology and Knology's NUBIG position, the NUBIG has resulted in a significant increase in the Company's annual Section 382 limitation. The NUBIG is determined based on the difference between the fair market value of Knology's assets and the tax basis of Knology's assets as of the ownership change date. Because of the existence of the NUBIG, the annual limitation imposed by Section 382 was significantly increased each year during the five-year period beginning on the date of the Section 382 ownership change (the "recognition period"). The increased annual limitation arising from the NUBIG is available on a cumulative basis during and after the recognition period following the Section 382 ownership change to offset taxable income. Accordingly, the Company expects that the Section 382 limitation relating to the $146.0 million of available NOL carryforwards will not result in any significant impacts on the Company's ability to utilize its NOL carryforwards to offset future taxable income nor will have significant impact on future operating cash flows.

        The Company also had various state NOL carryforwards totaling approximately $646.4 million. Unless utilized, the state carryforwards expire from 2018 to 2036. Of this amount, approximately $166.3 million is subject to an annual limitation due to an ownership change of the Company, as previously noted.

        The Company anticipates that the offering will result in an additional change of ownership under Section 382. The Company has analyzed the potential Section 382 impacts on its NOL carryforwards in the event of an additional Section 382 ownership change due to the offering and determined that, although it is likely there would be additional Section 382 limitation, based on the Company's anticipated fair market value and the Company's projected NUBIG position, a significant increase in the Company's projected Section 382 limitation would result. Accordingly, we believe that a prospective Section 382 limitation as a result of the offering will not result in any significant impacts on the Company's ability to utilize its NOL carryforwards to offset future taxable income nor will have significant impact on future operating cash flows.

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Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

 
  Year Ended
December 31,
  Change  
 
  2015   2014   $   %  
 
  (in millions)
   
   
 

Revenue

  $ 1,217.1   $ 1,264.3   $ (47.2 )   (4 )%

Costs and expenses:

                         

Operating (excluding depreciation and amortization)

    678.6     737.0     (58.4 )   (8 )%

Selling, general and administrative

    110.6     135.8     (25.2 )   (19 )%

Depreciation and amortization

    221.1     251.3     (30.2 )   (12 )%

Management fee to related party

    1.9     1.7     0.2     12 %

    1,012.2     1,125.8     (113.6 )   (10 )%

Income from operations

    204.9     138.5     66.4     48 %

Other income (expense):

                         

Interest expense

    (226.0 )   (237.0 )   11.0     5 %

Realized and unrealized gain on derivative instruments, net

    5.6     4.1     1.5     37 %

Gain on sale of assets

        52.9     (52.9 )     *

Loss on early extinguishment of debt

    (22.9 )       (22.9 )     *

Other income (expense), net

    (0.4 )   3.4     (3.8 )   (112 )%

Loss before provision for income taxes

    (38.8 )   (38.1 )   (0.7 )   (2 )%

Income tax benefit (expense)

    (9.9 )   10.8     (20.7 )     *

Net loss

  $ (48.7 ) $ (27.3 ) $ (21.4 )   (78 )%

*
Not meaningful

    Revenue

        Revenue for the year ended December 31, 2015 decreased $47.2 million, or 4%, compared to revenue for the year ended December 31, 2014.

 
  Year Ended
December 31,
  Change  
 
  2015   2014   $   %  
 
  (in millions)
 

Residential subscription

  $ 987.3   $ 1,038.2   $ (50.9 )   (5 )%

Business services subscription

    99.7     95.8     3.9     4 %

Total subscription

    1,087.0     1,134.0     (47.0 )   (4 )%

Other business services

    24.0     24.6     (0.6 )   (2 )%

Other

    106.1     105.7     0.4       *

  $ 1,217.1   $ 1,264.3   $ (47.2 )   (4 )%

*
Not meaningful

        Total subscription revenue for the year ended December 31, 2015 declined $47.0 million, or 4%, compared to the year ended December 31, 2014. Of this decline, approximately $56.6 million was attributable to the disposition of the South Dakota systems on September 30, 2014. Excluding the impact of the disposition of our South Dakota systems, total subscription revenue decreased $53.9 million as a result of year over year reductions in average total RGUs. Offsetting these decreases was a $63.5 million increase in total subscription revenue as a result of increases in the ARPU of our

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customer base, which is calculated as subscription revenue for each of the HSD, Video and Telephony services divided by the average total RGUs for each service category for the respective period.

        The following table details subscription revenue and average RGUs by service offering for the years ended December 31, 2015 and December 31, 2014:

 
  Year Ended
December 31,
   
   
 
 
  2015   2014   Change  
 
  Subscription
Revenue, $
  Average RGUs   Subscription
Revenue, $
  Average RGUs   $   %  
 
  (in millions)
  (in thousands)
  (in millions)
  (in thousands)
   
   
 

HSD subscription

  $ 351.9     720.2   $ 353.4     733.9   $ (1.5 )     *

Video subscription

    547.4     591.1     557.1     664.5     (9.7 )   (2 )%

Telephony subscription

    187.7     328.1     223.5     391.6     (35.8 )   (16 )%

  $ 1,087.0         $ 1,134.0         $ (47.0 )   (4 )%

*
Not meaningful

        HSD subscription revenue decreased $1.5 million, which includes a $16.8 million decrease attributable to the disposition of our South Dakota systems on September 30, 2014. Excluding the impact of the disposition of our South Dakota systems, HSD subscription revenue increased by a net $10.4 million as a result of a year over year increase in average HSD RGUs and a net $4.9 million increase in HSD ARPU when compared to the prior year ended December 31, 2014.

        Video subscription revenue decreased $9.7 million, which includes a $19.8 million decrease attributable to the disposition of our South Dakota systems on September 30, 2014. Excluding the impact of the disposition of our South Dakota systems, Video subscription revenue decreased by a net $48.1 million as a result of year over year decreases in average Video RGUs. Offsetting these volume decreases was a net increase of $58.2 million as a result of year over year increases in Video ARPU.

        Telephony subscription revenue decreased $35.8 million, which includes a $19.9 million decrease attributable to the disposition of our South Dakota systems on September 30, 2014. Excluding the impact of the disposition of our South Dakota systems, Telephony subscription revenue decreased by a net $16.3 million as a result of year over year decreases in average Telephony RGUs. Partially offsetting these volume reductions was a net increase of $0.4 million as a result of year over year increases in Telephony ARPU.

    Operating Expenses (Excluding Depreciation and Amortization)

        Operating expenses (excluding depreciation and amortization) decreased $58.4 million, or 8%, in the year ended December 31, 2015, as compared to the year ended December 31, 2014. Approximately $31.0 million of this decrease is related to the sale of our South Dakota systems on September 30, 2014. In addition, operating expenses decreased by $10.0 million as a result of lower subscribers during the year ended December 31, 2015. The remaining $17.4 million decrease is primarily attributable to savings related to our reduction in workforce implemented during the fourth quarter of the fiscal year ended December 31, 2014 and from the efficiencies derived from operational and process enhancements we implemented during the fiscal year ended December 31, 2015. Programming costs for the year ended December 31, 2015 were $374.1 million, compared to $391.3 million for the year ended December 31, 2014, representing a decrease of $17.2 million, or 4%.

        A presentation of incremental contribution is included below but is a measure that is not recognized under GAAP.

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        Incremental contribution is included herein because we believe that it is a key metric used by our management to assess the financial performance of the business by showing how the relative relationship of the various components of subscription services contributes to our overall consolidated historical results. We define incremental contribution as the components of subscription revenue, less costs directly incurred from third parties in connection with the provision of such services to our customers.

        Incremental contribution is not made in accordance with GAAP and our use of the term incremental contribution varies from others in our industry. Incremental contribution has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP as it does not identify or allocate any other operating costs and expenses that are components of our Income from Operations to specific subscription revenues as we do not measure or record such costs and expenses in a manner that would allow attribution to a specific component of subscription revenue. Accordingly, incremental contribution should not be considered as an alternative to operating income or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows, or as measures of liquidity.

        The following tables provide the most comparable GAAP measurements (i.e. Total Revenue and Operating Expenses (excluding depreciation and amortization)) for the period ended December 31, 2015 and December 31, 2014:

 
  Year ended
December 31,
 
(in millions)
  2015   2014  

Total revenue

  $ 1,217.1   $ 1,264.3  

Total operating expense (excluding depreciation and amortization)

    678.6     737.0  

        Incremental contribution and incremental contribution margin for the years ended December 31, 2015 and December 31, 2014 are as follows:

 
  Year Ended
December 31,
  Change  
 
  2015   2014   $   %  
 
  (in millions)
 

HSD subscription revenue

  $ 351.9   $ 353.4   $ (1.5 )     *

HSD expenses(1)

    13.1     13.2     (0.1 )     *

HSD incremental contribution

  $ 338.8   $ 340.2   $ (1.6 )      

HSD incremental contribution margin

    96.2%     96.3%              

 

 
  Year Ended
December 31,
  Change  
 
  2015   2014   $   %  
 
  (in millions)
 

Video subscription revenue

  $ 547.4   $ 557.1   $ (9.7 )   (2 )%

Video expenses(2)

    374.1     391.3     (17.2 )   (4 )%

Video incremental contribution

  $ 173.3   $ 165.8   $ (7.4 )      

Video incremental contribution margin

    31.7%     29.8%              

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  Year Ended
December 31,
  Change  
 
  2015   2014   $   %  
 
  (in millions)
 

Telephony subscription revenue

  $ 187.7   $ 223.5   $ (35.8 )   (16 )%

Telephony expenses(3)

    22.7     26.7     (4.0 )   (1 )%

Telephony incremental contribution

  $ 165.0   $ 196.8   $ (31.8 )      

Telephony incremental contribution margin

    87.9%     88.0%              

*
Not meaningful.

(1)
HSD expenses represent costs incurred from third-party vendors related to maintaining our network and Internet connectivity fees.

(2)
Video expenses represent fees paid to content providers for programming.

(3)
Telephony expenses represent costs incurred from third-party providers for leased circuits, interconnectivity and switching costs.

        The following tables provide a reconciliation of the separate elements comprising incremental contribution to each of their respective most comparable GAAP measurements (i.e. Revenue and Operating Expenses (excluding depreciation and amortization)) for the period ended December 31, 2015 and December 31, 2014:

 
  Year ended December 31,  
(in millions)
  2015   2014  

Subscription Revenue

             

HSD

  $ 351.9   $ 353.4  

Video

    547.4     557.1  

Telephony

    187.7     223.5  

Other revenue

    130.1     130.3  

Total revenue

  $ 1,217.1   $ 1,264.3  

Third-party direct operating expenses excluding depreciation and amortization

             

HSD

    13.1     13.2  

Video

    374.1     391.3  

Telephony

    22.7     26.7  

Operating expense, other than third-party direct expenses, that are not allocated (excluding depreciation and amortization)(1)

    268.7     305.8  

Total operating expense (excluding depreciation and amortization)

    678.6     737.0  

Selling, general and administrative(1)

    110.6     135.8  

Depreciation and amortization(1)

    221.1     251.3  

Management fee to related party(1)

    1.9     1.7  

  $ 1,012.2   $ 1,125.8  

(1)
Operating expenses (other than third-party direct expenses excluding depreciation and amortization); Selling, general and administrative; depreciation and amortization; and management fees to related party are not allocated by product or location for either internal or external reporting.

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    Selling, General and Administrative Expenses

        Selling, general and administrative expenses decreased $25.2 million, or 19%, in the year ended December 31, 2015, as compared to the year ended December 31, 2014. Approximately $3.5 million of this decrease is related to the sale of our South Dakota systems on September 30, 2014. The remaining $21.7 million decrease is primarily attributable to the reduction in integration related expenses associated with our 2012 acquisition of Knology that were incurred during the fiscal year ended December 31, 2014.

    Depreciation and Amortization

        Depreciation and amortization expenses decreased $30.2 million, or 12%, in the year ended December 31, 2015, as compared to the year ended December 31, 2014, primarily due to the sale of our South Dakota systems on September 30, 2014.

    Management Fee to Related Party

        We pay a quarterly management fee of $0.4 million plus any travel and miscellaneous expenses equally to Avista and Crestview. No management fees were paid to Crestview in 2015 or 2014.

    Interest Expense

        Interest expense decreased $11.0 million, or 5%, in the year ended December, 2015, as compared to the year ended December 31, 2014. This decrease resulted from lower outstanding debt and lower interest rates in connection with the refinancing of our Term B loans and a principal payment of $150.0 million made in May 2015.

    Realized and Unrealized Gain on Derivative Instruments, Net

        Realized and unrealized gain on derivative instruments, net, increased to a net gain of $5.6 million for the year ended December 31, 2015, as compared to a net gain of $4.1 million in the year ended December 31, 2014. As we do not use hedge accounting for financial reporting purposes, the adjustments to fair value of our interest rate swaps and caps are recorded to earnings at the end of each reporting period.

    Gain on Sale of Assets

        For the year ended December 31, 2014, we recorded a gain on sale of assets related to the disposition of our South Dakota systems (see Note 5 to our combined consolidated statements included elsewhere in this prospectus) totaling $52.9 million.

    Loss on Early Extinguishment of Debt

        In connection with our May 21, 2015 Third Amendment refinancing of our Term B loans, we recorded a loss on extinguishment of debt representing the expensing of prior deferred financing costs of $22.9 million during the twelve months ended December 31, 2015.

    Other Income (Expense), net

        Other income (expense), net decreased $3.8 million for the year ended December 31, 2015 when compared to the same period ended December 31, 2014. During the year ended December 31, 2014, we recorded a reduction to the contingent liability related to our Bluemile acquisition in the amount of $2.9 million.

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    Income Taxes Benefit (Expense)

        The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        The Company reported total income tax expense of $9.9 million during the fiscal year ended December 31, 2015 which included $16.4 million in deferred tax expense as a result of an increase in the valuation allowance.

        At December 31, 2015, the Company had available federal NOL carryforwards of approximately $797.6 million that expire between 2025 and 2035. Approximately $146.0 million of this NOL carryforward is subject to an annual utilization limitation under Section 382 due to one or more changes in ownership of Knology as of the date of the Company's acquisition of Knology in 2012. The Company has analyzed the potential Section 382 limitation on its NOL carryforwards and determined that, although $146.0 million of this carryforward relating to Knology is subject to an annual Section 382 limitation, based on the fair market value of Knology at the time of the Company's acquisition of Knology and Knology's NUBIG position, the NUBIG has resulted in a significant increase in the Company's annual Section 382 limitation. The NUBIG is determined based on the difference between the fair market value of Knology's assets and Knology's tax basis as of the ownership change date. Because of the existence of the NUBIG, the annual limitation imposed by Section 382 was significantly increased each year during the recognition period. The increased annual limitation arising from the NUBIG is available on a cumulative basis during and after the recognition period following the Section 382 ownership change to offset taxable income. Accordingly, the Company expects that the Section 382 limitation relating to the $146.0 million of available NOL carryforwards will not result in any significant impacts on the Company's ability to utilize its NOL carryforwards to offset future taxable income nor will have significant impact on future operating cash flows.

        The Company also had various state NOL carryforwards totaling approximately $656.1 million. Unless utilized, the state carryforwards expire from 2019 to 2035. Of this amount, approximately $151.6 million is subject to an annual limitation due to an ownership change of the Company, as previously noted.

Liquidity and Capital Resources

        On December 18, 2015, under a purchase agreement entered into by Parent, Avista and Crestview (the "Crestview Purchase Agreement"), Crestview's funds purchased units held by Avista and other unitholders, and made a $125.0 million primary investment in newly-issued units.

        On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in our Parent.

        On January 12, 2016, June 29, 2016 and December 13, 2016, Parent contributed $25.0 million, $25.0 million and $73.0 million, respectively, to WOW! in connection with Crestview and Avista's primary investment in Parent. The proceeds were used to pay down the Senior Subordinated Notes and general corporate purposes.

        On July 15, 2016, we utilized existing cash balances and working capital funds to make a $69.7 million payment towards the 13.38% Senior Subordinated Notes. Such payment included a partial redemption totaling $46.9 million of the outstanding principal balance of the notes, call premium of $3.1 million and the payment of accrued interest on the notes of $19.7 million.

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        On September 15, 2016, we redeemed an additional $159.1 million of outstanding principal of our 13.38% Senior Subordinated Notes. In addition to the principal redemption, we paid $10.7 million in call premium and $3.5 million in accrued interest.

        On December 18, 2016, we used the proceeds that were contributed down from the Parent, borrowed $10.0 million on our revolver and used existing cash balances to redeem our Senior Subordinated Notes in full. We paid $89.0 million in outstanding principal, $5.0 million in accrued interest and $6.0 million in a call premium in connection with such early retirement.

        At December 31, 2016, we had $129.5 million in current assets, including $30.8 million in cash and cash equivalents, and $251.0 million in current liabilities. Our outstanding consolidated debt and capital lease obligations aggregated $2,871.2 million, of which $22.7 million is classified as current in our consolidated balance sheet.

        On January 12, 2017, we consummated the divestiture of substantially all of the operating assets of our Lawrence, Kansas system to MidCo. In connection with the closing of this transaction, we received $213.0 million in net cash consideration.

        On March 20, 2017, we redeemed approximately $95.1 million of outstanding principal of our 10.25% Senior Notes using cash on hand. Following such redemption, $729.9 million in aggregate principal amount of 10.25% Senior Notes remain outstanding.

        At March 31, 2017, we had $173.6 million in current assets, including $86.5 million in cash and cash equivalents, and $207.3 million in current liabilities. Our outstanding consolidated debt and capital lease obligations aggregated $2,761.5 million, of which $22.3 million is classified as current in our condensed consolidated balance sheet as of such date.

        As of March 31, 2017, $131.7 million of proceeds from these transactions have been contributed to us while the remaining $11.4 million, net of accrued and paid transaction expenses, have been recorded to our Parent's balance sheet and have not been pushed down and reflected in our consolidated financial statements.

        We are required to prepay principal amounts under our Senior Secured Credit Facilities credit agreement if we generate excess cash flow, as defined in the credit agreement. As of March 31, 2017, we had borrowing capacity of $192.5 million under our Revolving Credit Facility and were in compliance with all our debt covenants. Accordingly, we believe that we have sufficient resources to fund our obligations and anticipated liquidity requirements in the foreseeable future.

Historical Operating, Investing and Financing Activities

    Operating Activities

        Net cash provided by operating activities increased $4.6 million from $26.2 million for the three months ended March 31, 2016 to $30.8 million for the three months ended March 31, 2017. The increase is primarily due to fewer payments toward payable and accruals due to timing of payments during the three months ended March 31, 2017, which is partially offset by a cash payment of $4.8 million for fees related to the extinguishment of debt.

        Net cash provided by operating activities decreased $17.0 million from $208.2 million for the year ended December 31, 2015 to $191.2 million for the year ended December 31, 2016. The decrease is primarily due to cash payments associated with fees for the early extinguishment of debt related to our refinancing activities for the year ended December 31, 2016 compared to the year ended December 31, 2015. Partially offsetting this decrease was an increase in operating income for the year ended December 31, 2016 compared to the year ended December 31, 2015.

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        Net cash provided by operating activities increased $6.7 million from $201.5 million for the year ended December 31, 2014 to $208.2 million for the year ended December 31, 2015. The increase is due primarily to an increase in operating earnings and changes in operating assets and liabilities.

    Investing Activities

        Net cash provided by (used in) investing activities increased $199.3 million from $63.5 million cash used for the three months ended March 31, 2016 to $135.8 million cash provided by for the three months ended March 31, 2017. The increase is attributable to net cash proceeds from the sale of our Lawrence, Kansas system in the amount of $213.0 million. Partially offsetting this increase was an increase in capital expenditures of $15.6 million for the three months ended March 31, 2017 compared to the three months ended March 31, 2016.

        Net cash used in investing activities increased $88.9 million from $232.5 million cash used in investing activities for the year ended December 31, 2015 to $321.4 million cash used in investing activities for the year ended December 31, 2016. The increase is primarily due to our NuLink acquisition of $54.3 million. Capital expenditures were $287.5 million and $231.9 million for the years ended December 31, 2016 and 2015, respectively. The increase in capital expenditures is primarily due to our build out of our fiber network in our Midwest region and the resumption of our edge-out strategy. Partially offsetting these cash uses was a one-time sale of our investment in Tower Cloud Inc. of $17.7 million.

        Net cash provided by (used in) investing activities decreased $238.1 million from $5.6 million cash provided by investing activities for the year ended December 31, 2014 to $232.5 million cash used in investing activities for the year ended December 31, 2015. The decrease in cash provided by investing activities is due primarily to the receipt of cash proceeds of $262.0 million from the sale of our South Dakota systems during the year ended December 31, 2014. Partially offsetting this decrease was a $20.0 million decrease in our capital expenditures for the year ended December 31, 2015 compared to the same period ended December 31, 2014.

        Capital expenditures will continue to be driven primarily by customer demand for our services. In the event we may have higher-than-expected customer demand for our services, this would result in higher revenue and income from operations, but such increased demand could also increase our projected capital expenditures.

    Financing Activities

        Net cash provided by and used in financing activities decreased $130.5 million from $19.6 million cash provided by for the three months ended March 31, 2016 to $110.9 million cash used in for the three months ended March 31, 2017. During the three months ended, we made cash payments on our outstanding debt of $110.8 million compared to $5.4 million for the three months ended March 31, 2016. Adding to this decrease, we received a $25.0 million contribution from our Parent during the three months ended March 31, 2016.

        Net cash provided by (used in) financing activities increased $267.4 million from $173.0 million used in financing activities for the year ended December 31, 2015 to $94.4 million provided by financing activities for the year ended December 31, 2016. The increase for the year ended December 31, 2016 is primarily due to the additional $240.0 million of proceeds from the refinancing of our Term B loans plus a contribution from the Parent of $123.0 million. Adding to this increase was a pay down of $150.0 million on our Term B-1 loans during the year ended December 31, 2015. Partially offsetting these increases were additional payments and redemptions of approximately $295.0 million on our Senior Subordinated Notes during the year ended December 31, 2016.

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        Net cash provided by (used in) financing activities decreased $212.9 million from $39.9 million provided by financing activities for the year ended December 31, 2014 to $173.0 million used in financing activities for the year ended December 31, 2015. The change is primarily due to the payment of $150.0 million on our Term B and Term B-1 loans in May 2015 associated with the refinancing of our Term B Loans.

    Contractual Obligations

        We have obligations to make future payments for goods and services under certain contractual arrangements. These contractual obligations secure the future rights to various assets and services to be used in the normal course of our operations. In accordance with applicable accounting rules, the future rights and obligations pertaining to firm commitments, such as operating lease obligations and certain purchase obligations under contracts, are not reflected as assets or liabilities in the accompanying consolidated balance sheet. The long term debt obligations are our principal payments on cash debt service obligations. Capital lease obligations are future lease payments on certain video equipment and vehicles. Operating lease obligations are the future minimum rental payments required under the operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2016.

        The following table summarizes certain of our obligations as of December 31, 2016 and the estimated timing and effect that such obligations are expected to have on our liquidity and cash flows in future periods (in millions):

 
  Payment due by period  
 
  Total   2017   2018 - 2019   2020 - 2021   Thereafter  

Long term debt obligations

  $ 2,889.2   $ 30.7   $ 872.3   $ 41.4   $ 1,944.8  

Fixed-rate interest(1)

    253.7     84.6     169.1          

Capital lease obligations

    4.9     2.2     2.3     0.4      

Operating lease obligations(2)

    28.8     7.7     11.9     5.7     3.5  

Total

  $ 3,176.6   $ 125.2   $ 1,055.6   $ 47.5   $ 1,948.3  

(1)
The fixed rate interest payments included in the table above assumes that our fixed-rate Notes outstanding as of December 31, 2016 will be held to maturity. Interest payments associated with our variable-rate debt have not been included in the table. Assuming that our $2,059.8 million of variable-rate Senior Secured Credit Facilities as of December 31, 2016 are held to maturity, and utilizing interest rates in effect at December 31, 2016, our annual interest payments (including commitment fees and letter of credit fees) on variable rate Senior Secured Credit Facilities as of December 31, 2016 are anticipated to be approximately $94.6 million for fiscal year 2017, $212.8 million for fiscal years 2018-2019, $225.3 million for fiscal years 2020-2021 and $192.5 million thereafter. The future annual interest obligations noted herein are estimated only in relation to debt outstanding as of December 31, 2016.

(2)
In addition to the above operating lease obligations, we also rent utility poles used in our operations. Generally, pole rentals are cancellable on short notice, but we anticipate that such rentals will recur. Rent expense for pole rental attachments was approximately $6.7 million, $8.0 million and $7.8 million for the years ended December 31, 2016, 2015 and 2014, respectively.

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Quantitative and Qualitative Disclosures About Market Risk.

        Our exposure to market risk is limited and primarily related to fluctuating interest rates associated with our variable rate indebtedness under our Senior Secured Credit Facility. As of March 31, 2017, borrowings under our Term B Loans and Revolving Credit Facility bear interest at our option at a rate equal to either an adjusted LIBOR rate (which is subject to a minimum rate of 1.00% for Term B Loans) or an ABR (which is subject to a minimum rate of 1.00% for Term B Loans), plus the applicable margin. The applicable margin for the Term B Loans is 3.50% for adjusted LIBOR loans and 2.50% for ABR loans. The applicable margin for borrowings under the Revolving Credit Facility is 3.50% for adjusted LIBOR loans and 2.50% for ABR loans. A hypothetical 100 basis point (1%) change in LIBOR interest rates (based on the interest rates in effect under our Senior Secured Credit Facility as of March 31, 2017) would result in an annual interest expense change of up to approximately $20.5 million on our Senior Secured Credit Facility.

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OUR BUSINESS

Company Overview

        We are the sixth largest cable operator in the United States ranked by number of customers as of December 31, 2016. We provide HSD, Video, Telephony and business-class services to a service area that includes approximately 3.0 million homes and businesses. Our services are delivered across 19 markets via our advanced HFC cable network. Our footprint covers over 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee. Led by our robust HSD offering, our products are available either as a bundle or as an individual service to residential and business services customers. As of March 31, 2017, 780,100 customers subscribed to our services. All statistical and operating information in this section gives effect to the acquisitions of Bluemile, Anne Arundel Broadband and NuLink and the divestitures of the South Dakota systems and Lawrence, Kansas system, except as otherwise noted. For additional detail on these transactions, see "Prospectus Summary—Summary Historical Combined Consolidated Financial Data."

        We believe we have one of the most technologically advanced, fiber-rich networks in our service areas, with approximately 11,500 route miles of intra- and inter-market fiber and approximately 33,500 miles of coaxial cable. We have designed our network with the goal of maximizing Internet speeds and accommodating future broadband demand. Our all-digital HFC infrastructure operates with a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable to 1.2 Ghz throughout. All of our new communities are built with a capacity of 1.2 Ghz. Our HFC network is fully upgraded with DOCSIS 3.0 and is capable of being upgraded to DOCSIS 3.1 in all of our markets. According to CableLabs, a non-profit innovation and research and development lab founded by members of the cable industry, DOCSIS 3.1 technology has the capacity to support network speeds up to 10 Gbps downstream and up to 1 Gbps upstream. We serve an average of 310 homes per node, enabling us to deliver quality HSD service and the capability to provide broadband speeds of 1 Gbps and higher. Our HFC network consists of a high-bandwidth, multi-use service provider backbone, which allows us to centrally source data, voice and video services for both residential and business traffic. We believe the quality and uniform architecture of our next-generation network is a competitive advantage that enables us to offer high-quality broadband services that meet our current and future customers' needs without incurring significant upgrade capital expenditures.

        We operate primarily in economically stable suburbs that are adjacent to large metropolitan areas as well as secondary and tertiary markets, which we believe have favorable competitive and demographic profiles and include businesses operating across a range of industries. We benefit from the ability to augment our footprint by pursuing edge-outs to increase our addressable market and grow our customer base. We have historically made selective capital investments in edge-outs to facilitate growth in residential and business services. Additionally, we provide a range of services to small, medium and large businesses within our footprint, and we believe we have the opportunity to grow our business services market share with our robust product suite.

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Attractive Markets with Favorable Competitive Dynamics

GRAPHIC


Note: "RGUs" represent Revenue Generating Units.

        We are focused on efficient capital spending and maximizing Adjusted EBITDA through an Internet-centric growth strategy while maintaining a profitable video subscriber base. Based on its per subscriber economics, we believe that HSD represents the greatest opportunity to drive increased profitability across our residential and business markets. According to Cisco, North America has experienced significant growth in bandwidth usage in recent years, driven primarily by (i) OTT viewership trends, (ii) a proliferation of connected devices, and (iii) increased customer demand for high-bandwidth business applications, including cloud computing. We believe our superior network infrastructure provides an efficient, scalable platform to meet our current and future customers' needs and deliver services as demand for bandwidth continues to increase. Data compiled by Kagan demonstrates that cable operators have enjoyed an increasing share of new broadband subscribers since 2010, while telephone companies have seen their share of these customers decline year over year. Also based on data compiled by Kagan, from the quarter ended June 30, 2015 through the quarter ended September 30, 2016, the cable industry has captured in excess of a 95% share of wired broadband net subscriber growth in each quarter. We believe the cable industry's net broadband share growth is indicative of a superior product offering relative to other HSD technologies, such as DSL network architecture often utilized in whole or in part by telephone companies.

Our History

        Since commencing operations in 2001, our focus has been to offer a competitive alternative cable service and establish a brand with a strong market position. We have scaled our business through (i) organic subscriber growth and increased penetration within our existing markets and footprint, (ii) edge-outs to grow our footprint, (iii) upgrades to introduce enhanced broadband services to networks we have acquired, (iv) entry into business services, with a broad range of HSD, Video and Telephony products, and (v) acquisitions and integration of cable systems.

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WOW!'s Evolution Over Time

GRAPHIC

        After a period of strong growth from 2001 through 2011, we shifted our focus to integrating our acquisitions and strengthening our product offering. Debt service costs associated with the Knology acquisition and capital expenditures necessary for network priorities and integration limited further investment in edge-outs and other growth opportunities through 2015. Through organic growth, normalization of capital expenditures, de-levering and interest cost reduction, we have increased free cash flow generation and renewed our focus on edge-outs and business services. As a result of a stronger balance sheet, we believe we are better positioned to accelerate our growth investments in a meaningful way going forward. The investments we have made in our platform have resulted in overall customer and HSD subscriber growth for the year ended December 31, 2016.

Our Service Offerings

        We offer a complete portfolio of HSD, Video, Telephony and business services products in all of our markets. Our products are available both on an individual and bundled basis across a variety of service tiers tailored to our customers' needs. We have an Internet-centric strategy that focuses on the growth of high-margin HSD subscribers while maintaining the profitability of Video customers.

        A summary of our service offerings is as follows:

Data Services

        As a result of evolving consumer preferences, we are experiencing an increase in customers who purchase HSD-only products. We have made significant investments in our operating platform to offer high-quality HSD services, including speed tiers that allow simultaneous usage of several connected devices in a single household and support high definition ("HD") video streaming. We offer HSD speed tiers up to 500 Mbps in 94% of our footprint with the capability to offer 1 Gbps or more in all of our markets. In the fourth quarter of 2016, we launched a 1 Gbps offering in four of our markets, with additional market launches planned for 2017 in our edge-out communities. As of March 31, 2017, we served approximately 729,000 HSD customers, representing approximately 23.9% penetration of our homes passed. Over the twelve months ended February 28, 2017, our average monthly Internet speed ranking was second out of 62 cable, fiber, DSL, wireless and satellite Internet service providers, or ISPs, according to Netflix's USA ISP Speed Index.

Video Services

        We offer our customers a full array of video services and programming choices. Our Video services include Basic Cable Service, which generally consists of local broadcast television and local community programming, and Digital Cable Service, which offers over 275 channels of digital programming. We offer a full suite of digital video offerings including high-definition TV, DVR and VOD. In

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approximately 79% of our footprint, we also offer our "Ultra" video product, which is a technologically advanced, IP enabled, whole-home DVR solution that integrates traditional linear video, an advanced user interface and direct access to OTT content, such as Netflix and other applications. As of March 31, 2017 we served approximately 474,000 Video customers, representing approximately 15.6% penetration of our homes passed.

Telephony Services

        We provide residential voice services using VoIP. Our Telephony services include local area calling plans, unlimited local and long-distance plans, caller ID and other features. As of March 31, 2017 we served approximately 243,000 Telephony customers, representing approximately 8.0% penetration of our homes passed.

Business Services

        Our broadband network also supports services for small, medium and large businesses within our footprint. We offer our traditional bundled products as well as products that meet the more complex HSD and telephony needs of small, medium and large businesses within our footprint. Our fiber-based services include enhanced telephony services, data speeds of up to 10 Gbps and office-to-office metro Ethernet services, which provide a secure and managed connection between customer locations. We have introduced our Hosted Voice product offering, which can replace customers' legacy private branch exchange ("PBX") products with newer services that offer more flexible features at a lower cost. In addition, we offer SIP trunking services, which are delivered over our fiber services network and terminated via an Ethernet connection at the customer's premise. We have a robust portfolio of colocation infrastructure services, cloud computing, managed backup and recovery services. We serve our business services customers from local customer service offices and network support 24 hours a day, seven days a week.

Our Systems and Markets

        Our systems serve the Midwestern and Southeastern United States. As of March 31, 2017, these networks passed approximately 3.0 million homes and businesses and served approximately 780,100 total customers, reflecting a total customer penetration rate of approximately 25.6%.

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        An overview of our markets as of December 31, 2016 is shown below:

Market(1)(2)
  Homes
Passed
  Network
Miles
< 750 MHz
  Network
Miles 750 to
859 MHz
  Network
Miles
> 860 MHz
  Total
Network
Miles
 

Detroit, MI

    670,865         5,396     633     6,029  

Chicago, IL

    472,432         2,856     347     3,203  

Columbus, OH

    416,829         4,259     352     4,611  

Pinellas, FL

    281,281         3,372         3,372  

Cleveland, OH

    172,877         1,154     665     1,819  

Huntsville, AL

    121,628         1,808     34     1,842  

Baltimore, MD

    111,605         1,225         1,225  

Montgomery, AL

    103,164         1,258         1,258  

Evansville, IN

    100,733             1,218     1,218  

Augusta, GA

    92,675         1,296         1,296  

Charleston, SC

    89,544         1,187         1,187  

Lansing, MI

    87,907     1,000     702     300     2,002  

Columbus, GA

    82,992         1,013         1,013  

Panama City, FL

    76,089         936         936  

Knoxville, TN

    46,542         647         647  

Newnan, GA

    35,723         820         820  

Dothan, AL

    31,837         525         525  

West Point, GA

    17,835         322         322  

Auburn, AL

    13,731         171         171  

    3,026,289     1,000     28,946     3,548     33,495  

(1)
Excludes our Lawrence, Kansas system which we divested on January 12, 2017.

(2)
Our customers are generally located within suburban areas adjacent to the above markets.

Our Strengths

        We believe the following core competitive strengths enable us to differentiate ourselves:

    Technologically Advanced Platform that Underpins our Competitive Advantage

        Our all-digital, fiber-rich HFC network has a bandwidth capacity of 750 Mhz or higher in 97% of our footprint and is upgradeable throughout the network to 1.2 Ghz to accommodate future broadband demand. The infrastructure is currently operating on DOCSIS 3.0, is capable of being upgraded to DOCSIS 3.1 and serves approximately 310 homes per node. We offer HSD speeds up to 500 Mbps in 94% of our footprint with the capability to offer 1 Gbps or more in all of our markets. In the fourth quarter of 2016, we launched a 1 Gbps offering in four of our markets, with additional market launches planned for 2017 in our edge-out communities. Over the twelve months ended February 28, 2017, our average monthly Internet speed ranking was second out of 62 cable, fiber, DSL, wireless and satellite ISPs, according to Netflix's USA ISP Speed Index.

        We offer a full suite of digital video services, including VOD, high-definition video and DVR. In approximately 79% of our footprint, we also offer our "Ultra" video product, which is a technologically advanced, IP enabled, whole-home DVR solution that integrates traditional linear video, an advanced user interface and direct access to OTT content, such as Netflix and other applications.

        Our technologically advanced network enables us to provide business services customers with a broad portfolio of carrier-class data and voice services, including Direct Internet Access, Ethernet over

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fiber and HFC, virtual private networks, VoIP solutions, wholesale fiber connectivity, cell backhaul solutions, disaster recovery, cloud back-up and SIP and PRI trunking services. Our advanced business services product offering continues to evolve, as we leverage our investment in next generation software enabled infrastructure to launch new services such as a full suite of managed and other virtual services.

        We expect future network-related capital expenditures to be generally stable. We believe that our flexible network architecture will allow us to meet our current and future customers' needs without incurring significant upgrade capital expenditures.

    Value-Accretive Edge-Outs

        We have a proven track record of successful edge-outs. Through network extensions to adjacent communities and increased customer penetration levels over time within these communities, we have increased the number of residential and business services customers that we serve. For the year ended December 31, 2016, we added approximately 8,900 customers from our edge-outs activated in 2016. We have experienced success in this strategy by targeting communities that we believe possess attractive demographic and competitive profiles, making capital-efficient decisions and leveraging our existing operating infrastructure. We have identified a large number of communities near our footprint for edge-out expansion, and believe edge-out expansion has a self-perpetuating effect as each community adjacent to a new edge-out investment presents further expansion opportunities.

        Between 2008 and 2012, we extended our network to over 100,000 new homes passed through edge-outs. During 2016, we expanded our network footprint by approximately 38,000 homes passed in five markets and achieved average customer penetration levels of 23% over an average activation period of 157 days as of December 31, 2016. The edge-outs that we activated in 2016 are continuing to experience net additions, and we expect an increase in penetration levels as they reach full maturity. We continue to selectively evaluate and invest in edge-out opportunities within our markets and believe we are well-positioned based on our historical track record of success in edge-out expansion.

    Business Services Capabilities

        We offer integrated solutions for businesses, including Direct Internet Access, Ethernet over fiber and HFC, hosted and on-premise VoIP solutions, metro Ethernet services, wholesale fiber connectivity, cell backhaul solutions and SIP and PRI trunking services. Recognizing the opportunity in our markets, we have built the necessary infrastructure, processes and sales and support organizations to scale our business services offering. Supported by our robust network, we have developed a full suite of products for small, medium and large businesses within our footprint, including enhanced telephony services and data speeds of up to 10 Gbps. We have built a consistent sales practice across our business services organization while ensuring product competitiveness and local knowledge to drive market share gain. We utilize multiple distribution channels, including direct sales, wholesale and indirect sales to capture opportunities across a variety of customer segments. Additional products within our portfolio include virtual private networks, a complete line of colocation infrastructure, cloud computing, managed backup and disaster recovery services.

        We have also made significant investments in our fiber network in the Chicago area. Since 2014, we have constructed approximately 1,200 miles of fiber in this market, providing connectivity to more than 500 macro and small cell sites as part of a fiber construction project for a leading wireless carrier. While a meaningful portion of the fiber network in this area is under a long-term contract to this carrier, there is significant capacity on the network that we expect will support future growth. As a result, we believe there is considerable embedded value in this asset.

        Strong execution has supported our business services expansion to date and will enable us to execute on our growth strategy. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and

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December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015.

    Attractive Geographic Footprint and Favorable Competitive Dynamics

        Our customers are located primarily in economically stable suburbs adjacent to large metropolitan areas, as well as secondary and tertiary markets, in the Midwest and Southeast United States. Our typical market possesses what we believe to be an advantageous mix of size and geographical position with favorable competitive dynamics and demographics, and includes a number of businesses operating across a range of industries. We believe our network footprint insulates us from heightened competition typical of major metropolitan centers. In addition, the diversity of WOW!'s geographic footprint enables us to mitigate the impact of economic downturns our business could face in a particular region.

        Within our geographical areas, we believe we are typically one of the top two providers of HSD and Video services. We have a proven track record of winning customers from other operators by providing superior HSD product offerings, focusing on local marketing efforts, offering competitive pricing and delivering strong customer service while leveraging our advanced network.

        Based on homes passed, we estimate approximately 53% and 39% of our footprint overlaps with Comcast Corp. and Charter, respectively. We estimate systems formerly owned by Time Warner Cable and Bright House Networks (recently acquired by Charter) overlap with approximately 33% of our homes passed. We believe competitive dynamics with telephone companies are favorable in our markets. We estimate that AT&T Corp's U-verse offering is available in approximately 63% of our footprint based on homes passed. We believe competitive dynamics with AT&T U-verse are favorable for WOW!, as AT&T U-verse's network architecture is a mix of fiber and DSL in several markets. Competition from Verizon FiOS and Frontier Communications is estimated to be 3.5% and 2.7% of our overall footprint, respectively.

    Strong Financial Performance Benefiting from the Mix Shift to HSD

        Our margin profile is driven by an increase in HSD revenues, which benefit from incremental contribution margins in excess of 95%, and our focus on preserving the profitability of our Video customers, which has resulted in increases in Video ARPU. For the year ended December 31, 2016, HSD revenues represented approximately 30.2% of our total revenues and 45.4% of our incremental contribution. In comparison, Video represented 44.2% of our total revenues and 23.9% of our incremental contribution over the same period. High content costs associated with the distribution of Video services are the key driver of the increasing divergence in profitability of HSD and Video. As a result of our continued customer mix shifting to HSD, we believe we will benefit from higher free cash flow conversion and margin expansion because HSD requires lower capital expenditures and operating expenses relative to Video.

        For the year ended December 31, 2016, we generated Revenue of $1,237.0 million, which represented a reduction of $27.3 million over the year ended December 31, 2014. The Company completed certain key acquisitions and divestitures during the two-year period ended December 31, 2016 which impacted reported Revenues. For the year ended December 31, 2016, we generated approximately $1,208.4 million of Revenue Including Acquisitions and Dispositions, which represented an increase of $22.1 million, or 0.9%, on an annualized basis over the year ended December 31, 2014. See "Prospectus Summary—Summary Historical Combined Consolidated Financial Data" for a reconciliation of Revenue to Revenue Including Acquisitions and Dispositions.

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    Operating Philosophy Founded on a Superior Customer Experience

        We compete strategically by adhering to our operating philosophy, which is: "To deliver an employee and customer experience that lives up to our name." The ongoing pursuit of this philosophy has a strong foundation in the WOW! culture that has been cultivated over time and focuses our organization on four core values: (i) respect: treat others as you wish to be treated; (ii) integrity: choose to do what is right; (iii) servanthood: embracing the attitude and honor of serving others rather than being served; and (iv) ownership: act with thought and a focus on the collective good.

        We believe that servanthood in particular is unique to WOW! and exemplifies our commitment to the customer experience—that "how" we treat our customers is just as important as "what" we provide them and ultimately is how we earn customer loyalty. This mindset is what drives our operating philosophy and we believe compels employees and customers alike to choose WOW!.

    Strong and Experienced Management Team

        Our management team is comprised of senior executives who have significant experience in the telecommunications industry, with an average tenure of seven years with the Company and approximately 24 years of relevant industry experience. Our management team has collaborated to establish WOW!'s unique culture and execute on the Company's operating philosophy and commitment to the customer experience. The team's track record of success has translated into numerous independent awards and recognitions. We have been (i) ranked highest in customer satisfaction by J.D. Power and Associates 21 times in the last twelve years, (ii) rated highest by Consumer Reports fifteen times in the last eight years, and (iii) recognized by PC Magazine with the Reader's Choice Award five times in the last six years. Our management team has substantial experience in deploying new products and services and has successfully guided WOW! through various business cycles. In addition, our management team has considerable experience in successfully identifying and completing edge-outs and acquiring and integrating cable assets.

Our Strategy

        The key components of our strategy are as follows:

    Focus on Highly Profitable Internet-Centric Products

        Driven by the increased Internet needs of our customers, we believe we will continue to experience strong demand for HSD services within our markets. The growth of bandwidth-intensive applications, such as mobile and social media applications, OTT video and cloud-based computing, and the proliferation of connected devices, are expected to continue to drive rapidly-increasing consumption of data. We intend to capitalize on these favorable industry trends by continuing to focus on HSD customer growth via increased penetration, driving a greater mix shift toward higher-margin HSD and business services products and transitioning customers to higher-priced HSD speed tiers. While we will continue to provide a robust Video product to satisfy the needs of our bundled customers, our strategy is to maintain profitability by increasing Video pricing in the face of rising content costs. For customers who value the Video product, our marketing approach is to drive adoption of HSD-centric bundles.

        The growth of our HSD business is driven by our ability to offer a range of speeds, packaged and bundled at a competitive value and provisioned to deliver a consistent and high-quality experience. We provide market-leading speed tiers of 10 Mbps, 100 Mbps, 500 Mbps and 1 Gbps. This "good, better, best" approach provides competitive speed and price-value differentiation while simplifying the overall customer value proposition. Our fiber-rich HFC network is fully DOCSIS 3.1-capable, allowing us to remain highly competitive as our customers' bandwidth needs evolve. In addition, we believe that new product development of HSD-adjacent services provides an opportunity for additional growth. Our existing infrastructure enables us to drive new product development initiatives, which could include home security, home automation and other Internet of Things services in the future.

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    Accelerate Investment in Highly Accretive Network Edge-Out Builds

        We believe edge-outs are an attractive investment opportunity available to WOW!. We have a track record of successfully identifying and expanding our network in a cost-effective manner to new communities and acquiring residential and business services customers. We believe that capital expenditures and operating costs for edge-outs are inherently lower relative to a new greenfield build because we are able to leverage our existing infrastructure and operating platforms to extend our network to communities adjacent to and near our existing footprint. Management evaluates potential edge-out opportunities based on the expected average acquired customer's annual Adjusted EBITDA contribution from such projects relative to the anticipated required capital expenditures. An edge-out project generally consists of a construction phase of twelve months or less, during which we incur capital expenditures. As the edge-out project is completed and we begin providing services to customers, we generally increase customer penetration and the average investment per acquired customer declines. Based on edge-outs activated in 2016 and customer penetration through December 31, 2016, our average capital expenditures per acquired customer represent a mid-single digit multiple of our average customer's annual Adjusted EBITDA contribution. As our edge-outs mature, penetration generally increases over time, and as a result, we expect this multiple to decrease.

        We continue to evaluate new opportunities for edge-outs to increase our residential and business footprint. Edge-outs are expected to add approximately 72,000 homes passed in 2017, and we have identified additional edge-out opportunities that we expect will be prioritized and built over the next several years. We believe that the overall edge-out opportunity within our network extends beyond what we have identified and will continue to expand as we gain access to new adjacent communities.

    Drive Growth in Business Services Market Opportunity

        We believe that business services represent a substantial growth area for WOW! and we have made significant investments in our network and product capabilities to address these opportunities. We believe that we have a significant market penetration growth opportunity in several of our markets, including those in the Midwest and Florida, and that our advanced network positions us to capitalize on the substantial business services opportunity within our footprint. We believe we have developed the product suite and sales expertise to continue to gain share with the small, medium and large businesses we target within our footprint. We estimate there is an approximately $1.3 billion addressable revenue opportunity across our markets. We believe that a substantial part of our target customer base is served by legacy DSL technologies, creating a clear competitive advantage and market opportunity for our HFC-based cable HSD services. We have built substantial scale within our platform, with business services revenues of $154.7 million and $123.7 million for the years ended December 31, 2016 and December 31, 2015, respectively. Excluding pass-through revenues related to our Chicago fiber construction project of $13.7 million and $0.3 million in 2016 and 2015, respectively, for the year ended December 31, 2016 business services revenues grew 14.3% from the year ended December 31, 2015. We design our networks with additional capacity so that increased bandwidth can be deployed economically and efficiently, allowing us to address our current and future customers' demand. We believe that our robust, customer-centric solutions, experienced sales organization and strong product capabilities have supported our expansion in the business services market and will help us execute on our growth strategy.

    Accelerate Free Cash Flow Generation

        We believe we will achieve accelerating free cash flow generation, which will allow us to continue to pursue enhanced, disciplined levels of investment in our edge-out and business services investment opportunities. We expect growth in income from operations and Adjusted EBITDA to exceed revenue growth over time, benefiting from the mix shift to HSD, the transition of customers to higher-priced HSD speed tiers and the management of Video customer profitability. We also expect the mix shift to

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drive a reduction in our capital expenditures relative to our revenues over time. We expect our near-term federal corporate income tax payments to be minimal given our federal NOL balance of $833.8 million as of December 31, 2016. See "Risk Factors—Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations."

    Continue Identifying and Successfully Integrating Acquisitions

        We expect to evaluate and pursue opportunistic tuck-in acquisitions. We have acquired six cable companies since 2006. We believe that we have consistently demonstrated an ability to acquire and integrate companies, realize cost synergies and increase the profitability of these businesses post-close. We have pursued these acquisitions for a variety of reasons including: (i) geographic diversity and increased scale; (ii) expansion of WOW!'s network through tuck-ins of smaller adjacent systems; (iii) value creation via upgrading and streamlining undermanaged systems; (iv) enhancement of our business services capabilities; and (v) cost rationalization.

        For example, our acquisition of Sigecom in 2006 (i) expanded WOW!'s footprint into the Evansville, Indiana market, (ii) increased WOW!'s business services presence, and (iii) generated significant cost savings by leveraging Sigecom's infrastructure and expertise, which provided an in-house telephony switch solution throughout our network. Our acquisition of Knology in 2012 provided incremental scale, geographic and competitive diversification and allowed us to consolidate a clustered footprint in the Midwest and Southeast. Most recently, our acquisition of NuLink added approximately 34,000 homes and businesses near WOW!'s existing Georgia footprint, with attractive demographics and meaningful edge-out and business services opportunities given its proximity to Atlanta.

        We believe our acquisition track record provides us with an advantage in future consolidation opportunities. We will continue to evaluate and pursue future acquisition opportunities based on the quality of underlying assets, fit within our existing business, opportunity to expand our network and the ability to create value through the realization of cost efficiencies.

    Operating Philosophy Driving Differentiation in Customer Experience

        Our philosophy is to deliver an employee and customer experience that is consistent with the WOW! name. We are a company comprised of people who derive satisfaction from taking care of each other and our customers. As a result, there is heightened awareness and understanding among our team that it is our employees who ultimately are WOW!'s greatest strategic asset. Our approximately 3,000 employees are brand ambassadors across the communities we serve.

        Our purposeful focus on creating a thriving WOW! culture is all for the benefit of our customers. We have established an enduring record of delivering award-winning customer service and satisfaction. Recognition by a variety of independent third parties, including J.D. Power and Associates, Consumer Reports and PC Magazine, has helped create a winning, competitive spirit amongst employees that drives our success.

Our Interactive Broadband Network

        Our network underpins the implementation of our operating strategy, allowing us to meet our current and future customers' needs without incurring significant upgrade capital expenditures. In addition to providing high capacity and scalability, our network has been specifically engineered with the following features:

    redundant fiber routing, which enables the rapid, automatic redirection of network traffic in the event of a fiber cut;

    back-up power supplies in our network, which ensure continuity of our service in the event of a power outage; and

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    network monitoring to the customer premise for all HSD, Video and Telephony services.

Technical Overview

        Our interactive broadband network consists primarily of an advanced hybrid fiber-coaxial cable network. Fiber-optic cable is a communications medium that uses glass fibers to transmit signals over long distances with minimal signal loss or distortion. In most of our network, our system's main high capacity fiber-optic cables connect to multiple nodes throughout our network. These nodes are connected to individual homes and buildings by coaxial cable and are shared by a number of customers. We have sufficient fibers in our cables to subdivide our nodes if growth so dictates. Our network has excellent broadband frequency characteristics and physical durability, which is conducive to providing HSD, Video and Telephony transmission.

        Our network is designed with redundant fiber-optic cables. Our fiber rings are "self-healing," which means that they provide for very rapid, automatic redirection of network traffic so that our service will continue even if there is a single point of failure on a fiber ring.

        We distribute our services from locations called hub sites, each of which is equipped with a generator and battery back-up power source to allow service to continue during a power outage. Additionally, individual nodes that are served by hubs are equipped with back-up generators or batteries. Our redundant fiber-optic cables and network powering systems allow us to provide circuit-based telephony services consistent with industry reliability standards for traditional telephone systems.

        We monitor our network 24 hours a day, seven days a week from our network operations center in Naperville, Illinois. Technicians in each of our service areas schedule and perform installations and repairs and monitor the performance of our interactive broadband network. We actively maintain the quality of our network to minimize service interruptions and extend the network's operational life.

High-Speed Data Services

        We provide Internet access using high-speed cable modems in the same way customers receive Internet services over modems linked to local telephone networks. We provide our customers with a high level of data transfer rates through multiple peering arrangements with tier-one Internet facility providers.

Video Services

        Our network is designed for an analog and digital two-way interactive transmission with fiber-optic cable carrying signals from the headend to hubs and to distribution points (nodes) within our customers' neighborhoods, where the signals are transferred to our coaxial cable network for delivery to our customers.

Telephony Services

        We offer Telephony services over our broadband network, which interconnects with those of other local phone companies. We install either a network interface box outside a customer's home or an Embedded Multimedia Terminal Adapter in the home to provide dial tone service. In addition, we serve the majority of our Telephony customers with VoIP switching technology. This newer architecture allows for the same enhanced custom calling services as traditional time division multiplexing switching systems, as well as additional advanced business services, such as session initiation protocol, hosted PBX services and other services.

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Business Services

        In addition to the HSD, Video and Telephony services outlined above, we utilize our network to provide other business services, including SIP and PRI trunking services, web hosting, metro Ethernet and wireless backhaul services. We also provide advanced colocation and cloud infrastructure services, including private cage or cabinet with high-availability power, virtual and physical compute, high-performance storage, dedicated firewall/load balancers, private virtual local area network segmentation, disaster recovery to the cloud and backup and archive as a service.

Programming

        We purchase some of our programming directly from the program networks by entering into affiliation agreements with the programming suppliers. We also benefit from our membership with the National Cable Television Cooperative ("NCTC"), which enables us to take advantage of volume discounts. As of December 31, 2016, approximately 60% of our programming was sourced from the NCTC, which also handles our contracting and billing arrangements for this programming.

Competition

High-Speed Data Services

        We primarily compete against other cable television companies, ILECs that provide dial-up and DSL services and other wireless Internet access services to provide consumers with data services. Competitors' HSD offerings also include a range of services from DSL to gigabit Ethernet. Our competitors primarily provide services over traditional telephone networks or broadband data networks. By contrast, our services are offered over pure and hybrid fiber network connections. Our additional services include spam filtering, email, private web space, online storage and customizable news and entertainment content. Importantly, we compete against other data service providers by offering high-quality HSD services and a differentiated customer service experience.

Video Services

        Cable television systems are operated under non-exclusive franchises granted by local authorities, which may result in more than one cable operator providing Video services in a particular market. Our cable competitors currently include Charter, Comcast and Mediacom. We also encounter competition from direct broadcast satellite systems, including DirecTV and Dish Network, that transmit signals to small dish antennas owned by the end-user.

        The Telecommunications Act of 1996 (the "1996 Act") eliminated many restrictions on local telephone companies offering video programming and we face competition from those companies. AT&T, CenturyLink, Frontier and Verizon currently provide video services to homes in portions of our markets. We also compete with systems that provide multichannel program services directly to hotel, motel, apartment, condominium and other multi-unit complexes through a satellite master antenna—a single satellite dish for an entire building or complex.

        Cable television distributors may, in some markets, compete for customers with other video programming distributors and other providers of entertainment, news and information. Alternative methods of distributing video programming offered by cable television systems include OTT business models such as Netflix, Hulu, Amazon and Apple. Increasingly, content owners are using Internet-based delivery of content directly to consumers, some without charging a fee to access the content. Further, due to consumer electronic innovations, consumers are able to watch such Internet-delivered content on televisions, personal computers, tablets, gaming boxes connected to televisions and mobile devices. HBO and CBS sell their programming directly to consumers over the Internet. Dish Network offers Sling TV, which includes ESPN among other programming, and Sony offers PlayStation Vue. We

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believe some customers have chosen or will choose to receive video over the Internet rather than through our VOD and subscription video services, thereby reducing our video subscriber base, in a trend known as "cord-cutting." While difficult to quantify and extrapolate, we expect this trend to continue in the future. Notwithstanding those trends, we believe that we are positioned to benefit as these customers will require a robust Internet connection in order to efficiently access such OTT content, which could lead to increased demand for our HSD services as a result of any "cord-cutting."

        In addition to other means, we compete with these companies by delivering a differentiated customer service experience.

Telephony Services

        In providing local and long-distance Telephony services, we compete with the incumbent local phone company, various long-distance providers and VoIP telephone providers in each of our markets. AT&T, CenturyLink, Frontier and Verizon are the incumbent local phone companies in our current markets. We also compete with a number of long-distance telephone services providers, such as AT&T, CenturyLink, Frontier and Verizon. In addition, we compete with a variety of smaller, regional competitors that may lease network components from AT&T, CenturyLink, Frontier or Verizon and focus on the commercial segment of our markets.

        Following years of development, VoIP has been deployed by a variety of service providers, including the other Multiple System Operators ("MSOs") that we compete against and independent service providers, such as Vonage Holding Corporation. Unlike circuit switched technology, this technology does not require ownership of the last mile and eliminates the need to rent the last mile from the Regional Bell Operating Companies. VoIP providers have had differing levels of success based on their brand recognition, financial support, technical abilities and legal and regulatory decisions.

        Wireless telephone service is viewed by some consumers as a replacement for traditional telephone service. Wireless service is priced on a flat-rate or usage-sensitive basis and rates are continuously decreasing.

Bundled Services

        Most of our cable competitors have deployed their own versions of the triple-play bundle in our markets. Charter, Comcast, Mediacom and other MSOs offer VoIP, thereby enabling their own versions of a triple-play bundle in our markets.

        AT&T U-verse, Frontier and Verizon FiOS offer bundled services by providing video via their broadband networks in certain markets. AT&T U-verse has deployed video in most of our markets. Additionally, AT&T, through its ownership of DirecTV, provides a satellite video offering. Through its acquisition of Verizon FiOS assets, Frontier offers bundled services in Pinellas. Consequently, we overlap with Verizon FiOS only in our Baltimore market.

        We believe that our advanced network, competitive HSD products and emphasis on customer service will continue to be a strategic initiative and that the best way to retain and attract customers is through an additional focus on technology and deployment of broadband data applications.

Capital Expenditures

        We have ongoing capital expenditure requirements related to the maintenance, expansion and technological upgrades of our cable network. Capital expenditures are funded primarily through a combination of cash on hand and cash flow from operations. Our capital expenditures were $287.5 million, $231.9 million and $251.9 million for the years ended December 31, 2016, 2015 and 2014, respectively. The $55.6 million increase from the year ended December 31, 2015 to the year ended December 31, 2016 is primarily due to our significant investment in our fiber network in the

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Chicago area. Since 2014, we have constructed approximately 1,200 miles of fiber in this market, providing connectivity to more than 500 macro and small cell sites as part of a fiber construction project for a leading wireless carrier. In addition, we incur capital expenditures in connection with our edge-out strategy. In the year ended December 31, 2016, we extended our network to approximately 8,900 homes and incurred capital expenditures of $30.6 million to support this geographic expansion.

        The following tables set forth additional information regarding our capital expenditures for the periods presented:

 
  December 31,  
(in millions)
  2014   2015   2016  

Capital Expenditures

                   

Customer premise equipment(a)

  $ 106.8   $ 93.8   $ 98.8  

Scalable infrastructure(b)

    77.7     37.2     37.5  

Line extensions(c)

    20.0     63.3     102.2  

Upgrade / rebuild(d)

    16.5     5.9     0.9  

Support capital(e)

    30.9     31.7     48.1  

Total

  $ 251.9   $ 231.9   $ 287.5  

Capital expenditures included in total related to:

                   

Edge-outs(f)

  $   $ 1.9   $ 30.6  

Business services(g)

  $ 19.6   $ 66.6   $ 76.9  

(a)
Customer premise equipment, or CPE, includes equipment and installation costs incurred to deliver services to residential and business services customers. CPE includes the costs of acquiring and installing our video set-top boxes and modems, as well as the cost of customer connections to our network.

(b)
Scalable infrastructure includes costs, not directly related to customer acquisition activity, to support new customer growth and provide service enhancements (e.g., headend equipment).

(c)
Line extensions include costs associated with new home development within our footprint and edge-outs (e.g., fiber / coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).

(d)
Upgrade / rebuild includes costs to modify or replace existing HFC network, including enhancements.

(e)
Support capital includes all other non-network-related costs to support day-to-day operations, including land, buildings, vehicles, office equipment, tools and test equipment.

(f)
Edge-outs represent costs to extend our network into new adjacent service areas, including the associated CPE.

(g)
Business services represent costs associated with the build-out of our network to support business services customers, including the associated CPE.

Legislation and Regulation

        We operate in highly regulated industries and both our cable television and telecommunications services are subject to broad regulation at the federal, state and local levels. Our Internet services have historically been subject to more limited regulation, although the FCC's 2015 Open Internet Order expanded regulation of Internet services as more fully described below. The following is a summary of laws and regulations affecting the cable television and telecommunications industries. It does not

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purport to be a complete summary of all present and proposed legislation and regulations pertaining to our operations.

Regulation of Cable Services

        The FCC, the principal federal regulatory agency with jurisdiction over cable television operators and services, has promulgated regulations covering many aspects of cable television operations. The composition of the FCC changed in January 2017. We anticipate that the newly composed FCC will modify some regulations applicable to our business; however, the impact on our business is unknown. The FCC enforces its regulations through the imposition of monetary fines, the issuance of cease-and-desist orders and/or the imposition of other administrative sanctions. Cable franchises, the principal instrument of governmental authority for our cable television operations, are not issued by the FCC but by states, cities, counties or political subdivisions. A brief summary of certain key federal regulations follows.

    Rate Regulation

        The Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") authorized rate regulation for certain cable services and equipment in certain markets. It also eliminated direct oversight of rates by the FCC and local franchising authorities of all but the basic service tier of cable service. Rate regulation of the basic tier does not apply, however, when a cable operator is subject to effective competition in the relevant community. Under an Order issued by the FCC in 2015, cable operators are presumed to be subject to effective competition. That Order has been appealed to the D.C. Circuit Court. Moreover, some local franchising authorities that could otherwise regulate basic rates for cable systems that are not subject to effective competition choose not to do so. We are not currently subject to cable service rate regulation in any of our markets.

    Program Access

        To promote competition between incumbent cable operators and independent cable programmers, the 1992 Cable Act placed restrictions on dealings between certain cable programmers and cable operators. Satellite video programmers affiliated with cable operators are prohibited in most cases from favoring those cable operators over competing distributors of multi-channel video programming, such as satellite television operators and unaffiliated competitive cable operators such as us. Specifically, the program access regulations generally prohibit exclusive contracts for satellite cable programming or satellite broadcast programming between any cable operator and any cable-affiliated programming vendor. On October 5, 2012, the FCC adopted and released a Further Notice of Proposed Rulemaking in the Matter of Revision of the Commission's Program Access Rules (the "Program Access FNPRM"). The FCC declined to extend the exclusive contract prohibition section of the program access rules beyond its October 5, 2012 sunset date. The prohibition applies only to programming that is delivered via satellite; it does not apply to programming delivered via terrestrial facilities. The FCC determined that a preemptive prohibition on exclusive contracts is no longer "necessary to preserve and protect competition and diversity in the distribution of video programming" considering that a case-by-case process will remain in place after the prohibition expires to assess the impact of individual exclusive contracts. In the Program Access FNPRM, the FCC also requested comment on revisions to the program access rules pertaining to buying groups and rebuttable presumptions in program access complaint proceedings challenging certain exclusive contracts. The Program Access FNPRM is still pending.

    Commercial Leased Access

        The Communications Act requires that cable systems with 36 or more channels make available a portion of their channel capacity for commercial leased access by third parties to facilitate competitive

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programming efforts. We have not been subject to many requests for carriage under the leased access rules.

    Carriage of Broadcast Television Signals

        The 1992 Cable Act established broadcast signal carriage (so-called "must carry") requirements that allow local commercial television broadcast stations to elect every three years whether to require the cable systems in the relevant area to carry the station's signal or whether to require the cable system to negotiate for consent to carry the station. The most recent election by broadcasters became effective on January 1, 2015. For local, non-commercial stations, cable systems are also subject to must-carry obligations. We now carry most commercial stations pursuant to retransmission consent agreements and pay fees for such consents.

    Franchise Authority

        Cable television systems operate pursuant to non-exclusive franchises issued by franchising authorities, which, depending on the specific jurisdiction can be the states, cities, counties or political subdivisions in which a cable operator provides cable service. Franchising authority is premised upon the cable operator crossing and using public rights-of-way to construct and maintain its system. The terms of franchises, while variable, typically include requirements concerning services, franchise fees, construction timelines, mandated service areas, customer service standards, technical requirements, public, educational and government access channels and support, and channel capacity. Franchise authorities may terminate a franchise or assess penalties if the franchised cable operator fails to adhere to the conditions of the franchise. Although largely discretionary, the exercise of state and local franchise authority is limited by federal statutes and regulations adopted pursuant thereto. We believe that the requirements imposed by our franchise agreements are fairly typical for the industry. Although they do vary, our franchises generally provide for the payment of fees to the applicable franchise authority of 5% or lower of our gross cable service revenues, which is the current maximum authorized by federal law. Many of our franchises also require that we pay a percentage of our gross revenue in support of public, educational and governmental ("PEG") channels. These so-called PEG fees vary, but generally do not exceed 2% of our gross cable services revenues.

        On December 20, 2006, the FCC established rules and provided guidance (the " 2006 Order ") pursuant to the Communications Act that prohibit local franchising authorities from unreasonably refusing to award competitive franchises for the provision of cable services. In order to eliminate certain barriers to entry into the cable market, and to encourage investment in broadband facilities, the FCC preempted local laws, regulations, and requirements, including local level-playing-field provisions, to the extent they impose greater restrictions on market entry than those adopted under the order. This order has the potential to benefit us by facilitating our ability to obtain and renew cable service franchises. On January 21, 2015, the FCC issued an Order on Reconsideration of the Second Report and Order . The FCC clarified that the franchising rules and findings it extended to incumbent cable operators in the 2006 Order do not apply to state laws governing cable television operators, or to any state-level cable franchising process.

        Many state legislatures have enacted legislation streamlining the franchising process, including having the state, instead of local governments, issue franchises. Of particular relevance to us, states with laws streamlining the franchising process or authorizing state-wide or uniform franchises currently include Florida, Georgia, Indiana, Illinois, Michigan, Ohio, South Carolina and Tennessee. In some cases, these laws enable us to expand our operations more rapidly by providing for a streamlined franchising process. At the same time, they enable easier entry by additional providers into our service territories.

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    Franchise Renewal

        Franchise renewal, or approval for the sale, transfer or assignment of a franchise, may involve the imposition of additional requirements not present in the initial franchise agreement. Franchise renewal is not guaranteed, but federal law imposes certain standards to prohibit the arbitrary denial of franchise renewal. Our franchises are typically issued for 10 to 15 year initial terms, but the terms vary depending upon whether we are operating under a local or state franchise, and many of our existing franchise terms will expire over the course of the next several years. Still, we expect our franchises to be renewed by the relevant franchising authority. The 2006 Order discussed under "—Franchise Authority" above, as well as some state laws that regulate the issuance of state video franchises, reduce the potential for unreasonable conditions being imposed upon renewal.

    Pole Attachments

        The Communications Act requires all local telephone companies and electric utilities, except those owned by municipalities and co-operatives, to provide cable operators and telecommunications carriers with nondiscriminatory access to poles, ducts, conduit and rights-of-way at just and reasonable rates, except where states have certified to the FCC that they regulate pole access and pole attachment rates. The right to access poles, ducts, conduits and rights-of-way pursuant to regulated rates and set timeframes is highly beneficial to facilities-based providers such as us. Federal law also establishes principles to govern the pricing and terms of such access. Currently, 20 states and the District of Columbia have made certifications to the FCC, which leaves pole attachment matters to be regulated by those states. Of the states in which we operate, Illinois, Michigan and Ohio have made certifications to the FCC. The FCC has clarified that the provision of Internet services by a cable operator does not affect the agency's jurisdiction over pole attachments by that cable operator, nor does the provision of such non-cable services affect the rate formula otherwise applicable to the cable operator.

        In April 2011, the FCC adopted an order that examined a number of issues involving access to pole attachments by telecommunications carriers, including the rights of ILECs to demand nondiscriminatory access in certain situations, and which attempted to bring the rates that cable operators and telecommunications carriers charge closer to parity. In November 2015, the FCC released another order taking further steps to balance the rates paid by cable operators and telecommunications carriers. Part of the order addresses some industry members' concerns that pole attachment rates might increase sharply now that the FCC has reclassified broadband service as telecommunications service as discussed further below. The 2015 order is on appeal before the U.S. Court of Appeals for the 8th Circuit. It is uncertain, however, how the Open Internet Order discussed below might impact attachment rights and costs.

    Internet Service

        To date, the FCC has rejected requests by some Internet service providers to require cable operators to provide unaffiliated Internet service providers with direct access to the operators' broadband facilities. On December 23, 2010, the FCC adopted "net neutrality" rules requiring fixed and mobile providers of broadband Internet access to comply with certain disclosure and other rules designed to maximize consumer access to broadband services. In summary, the rules impose obligations related to ensuring provider transparency and preventing unreasonable blocking and discrimination of content, applications or services. In general, the requirements, which took effect on November 20, 2011, permit reasonable network management practices by broadband providers. Challenges to the "net neutrality" rules, including the FCC's jurisdiction to adopt the rules, were filed in federal appellate court. On January 14, 2014, a D.C. Circuit panel struck down the portions of the FCC's 2010 rules that had banned blocking or discriminatory treatment of websites or other online applications by retail broadband Internet access providers such as incumbent telephone companies and cable operators. At the same time, the court approved the agency's requirement that broadband providers adequately

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disclose their policies regarding blocking and "network management" (that is, practices for avoiding network congestion, giving priority to some classes of traffic over others, etc.).

        On February 26, 2015, the FCC announced that it reclassified broadband Internet access as a telecommunications service under the Open Internet Order. The FCC announced that its Open Internet Order prohibits: (i) broadband providers from blocking access to legal content, applications, services, or non-harmful devices; (ii) broadband providers from impairing or degrading lawful Internet traffic on the basis of content, applications, services, or non-harmful devices; and (iii) broadband providers from favoring some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind—in other words, no "fast lanes." This rule also bans ISPs such as us from prioritizing content and services of their affiliates. The FCC further announced that its Open Internet Order will require additional disclosure and network management practices, and will extend a number of the Title II regulatory requirements to broadband Internet access services, such as compliance with the privacy provisions of Section 222 of the Communications Act.

        The legality of the Open Internet Order was challenged in court by a number of parties. On June 14, 2016, the D.C. Circuit upheld the Open Internet Order.

        The composition of the FCC changed in January 2017. We anticipate that some of the new rules established by the Open Internet Order will be modified by the FCC; however, the impact on our business is unknown.

        It is possible that the new rules imposed by the Open Internet Order will increase our costs, impact our ability to provide service to our customers and adversely affect our profitability.

    Tier Buy-through

        The tier buy-through prohibition contained in the 1992 Cable Act generally prohibits cable operators from requiring subscribers to purchase a particular service tier, other than the basic service tier, in order to obtain access to video programming offered on a per-channel or per-program basis. In general, a cable television operator has the right to select the channels and services that are available on its cable system. With the exception of certain channels that are required to be carried by federal law as part of the basic tier, such as certain local broadcast television channels, the cable operator has broad discretion in choosing the channels that will be available and how those channels will be packaged and marketed to subscribers. In order to maximize the number of subscribers, the cable operator selects channels that are likely to appeal to a broad spectrum of viewers. If Congress or the FCC were to place more stringent requirements on how we package our services, such requirements could have an adverse effect on our profitability.

    Potential Regulatory Changes

        The regulation of cable television systems at the federal, state and local levels has substantially changed over the past two decades since enactment of the 1992 Cable Act. Material additional changes in the law and implementing regulatory requirements, both those described above and others, cannot be ascertained with any certainty at this time. Our business could be adversely affected by future changes in regulations.

    Regulation of Telecommunication Services

        Our telecommunications services are subject to varying degrees of federal, state and local regulation. Pursuant to the Communications Act, as amended by the 1996 Act, the FCC generally exercises jurisdiction over the facilities of, and the services offered by, telecommunications carriers that provide interstate or international communications services. The FCC has extended many of its regulations that apply to traditional telecommunications service to Internet based, or interconnected

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VoIP phone services. Barring federal preemption, state regulatory authorities retain jurisdiction over the same facilities to the extent that they are used to provide intrastate communications services, as well as facilities solely used to provide intrastate services. Local regulation is largely limited to the management of the occupation and use of county or municipal public rights-of-way. Various international authorities may also seek to regulate the provision of certain services. As addressed in more detail above, in the Open Internet Order, the FCC re-characterized broadband Internet access services as telecommunications services subject to various Title II requirements.

    Regulation of Local Exchange Operations

        Our ILEC subsidiaries are regulated by both federal and state agencies. Our interstate products and services and the regulated telecommunications earnings of all of our subsidiaries are subject to federal regulation by the FCC, and our local and intrastate products and services and the regulated earnings are subject to regulation by state PSC. The FCC has principal jurisdiction over matters including, but not limited to, interstate switched and special access rates. The FCC also regulates the rates that ILECs and CLECs may charge for the use of their local networks in originating or terminating interstate and international transmissions. PSCs have jurisdiction over matters including local service rates, intrastate access rates and the quality of service.

        The Communications Act places certain obligations, including those described below, on ILECs to open their networks to competitive providers, as well as heightened interconnection obligations and a duty to make their services available to resellers at a wholesale discount rate. The following are certain obligations that the Communications Act and the 1996 Act, as implemented by the FCC, place on ILECs, which gives us important rights in the areas where we operate as competitors, and actual or potential obligations where our ILEC subsidiaries operate:

    Interconnection. Establishes requirements and standards applicable to ILECs that receive requests from other carriers for network interconnection, unbundling of network elements, colocation of equipment and resale, and requires all local exchange carriers ("LECs") to enter into mutual compensation arrangements with other LECs for transport and termination of local calls on each other's networks.

    Reciprocal Compensation. Requires all ILECs and CLECs to complete calls originated by competing local exchange carriers under reciprocal arrangements at prices set by the FCC, PSCs or at negotiated prices.

    Colocation of Equipment. Allows CLECs to install and maintain their own network equipment in ILEC central offices.

    Number Portability. Requires all providers of telecommunications services, as well as providers of interconnected VoIP services, to permit users of telecommunications services to retain their existing telephone numbers without impairment of quality, reliability or convenience when switching from one telecommunications provider to another. While number portability generally benefits our CLEC operations, it represents a burden to our ILEC subsidiaries.

    Access to Rights-of-Way. Requires telecommunications carriers to permit other carriers access to poles, ducts, conduits and rights-of-way at regulated prices and set time frames.

        We have entered into PSC approved local interconnection agreements with a variety of telecom providers for, among other things, the transport and termination of our local telephone traffic. Some of these agreements have expired and we continue to operate on the same rates, terms, and conditions in the interim as we seek to enter into successor agreements. These agreements are subject to changes as a result of changes in laws and regulations, and there is no guarantee that the rates and terms concerning our interconnection agreements with ILECs under which we operate today will be available in the future.

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    Inter-Carrier Compensation

        Our LEC subsidiaries currently receive compensation from other telecommunications providers, including long distance companies, for origination and termination of interexchange traffic through network access charges that are established in accordance with state and federal laws. Accordingly, we benefit from the receipt and termination of intrastate and interstate long distance traffic, though we also make payments to other telecommunications carriers when they terminate our telecommunications traffic.

        Several of our subsidiaries are classified by the FCC as non-dominant carriers with respect to both interstate and international long-distance services and competitive local exchange services. As non-dominant carriers, these subsidiaries' rates presently are not generally regulated by the FCC, although the rates are still subject to general statutory requirements applicable to all carriers that the rates be just, reasonable and nondiscriminatory. We may file tariffs for interstate access charges for these carriers on a permissive basis, but otherwise our interstate services are mandatorily detariffed and subject to our ability to enter into relationships with our customers through contracts. Our interstate access services are tariffed and fall within FCC-established benchmarks for such services.

        Certain of our subsidiaries are regulated by the FCC as dominant carriers in the provision of interstate switched access services. These subsidiaries must file tariffs with the FCC and must provide the FCC with notice prior to changing their rates, terms or conditions of interstate access services. Each such subsidiary has filed its own tariff or concurred in the tariffs filed by the National Exchange Carrier Association.

    Regulatory Treatment of VoIP Services

        A significant part of our Telephony line of business is classified by the FCC as VoIP. At this time, the FCC and state regulators have not classified most IP-enabled services as regulated telecommunications services. The FCC, for example, has applied to providers of "interconnected VoIP" services some of its rules applicable to traditional circuit switched telephone providers, but has yet to issue a ruling determining whether interconnected VoIP providers are to be regulated as providers of information services or telecommunications services. The FCC initiated a rulemaking proceeding in 2004 to examine issues relating to the appropriate regulatory classification of IP-enabled services, including VoIP services. We cannot predict when or if the FCC will issue a final decision in this proceeding, though it has issued several decisions in the interim applying certain regulatory requirements to providers of interconnected VoIP services. These requirements include, among others, regulations relating to federal universal service contributions, the confidentiality of customer data and communications, cooperation with law enforcement, discontinuance of service, numbering and number portability, outage reporting, 911 emergency access and disability access. The FCC has also established certain other requirements that impact our VoIP services. For example, the FCC requires that we provide certain notices to our VoIP customers concerning the limitations of the services, particularly in connection with the ability of the service (including access to E911) to function in the event of a power outage. We are also required to offer our customers a back-up power solution to enable the services to continue to function in the event of a power outage. Within our VoIP line of business, we currently comply with all applicable regulations that have been issued by the FCC or state regulatory agencies. Decisions and regulations from similar proceedings in the future could lead to an increase in the costs associated with providing VoIP services. At this time, we are unable to predict the impact, if any, that additional regulatory action on these issues will have on our business.

    Universal Service

        The Federal Universal Service Fund ("USF") is the support mechanism established by the FCC to ensure that high-quality, affordable telecommunications service is available to all Americans. Pursuant to the FCC's universal service rules, all telecommunications providers and interconnected VoIP providers, including us, must contribute a percentage of their interstate and international end-user telecommunications and interconnected VoIP revenues to the USF. The FCC establishes an

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industry-wide quarterly contribution factor, which sets the exact percentage that applies for the given quarter. The contribution factor for the second quarter of 2017 is 17.4% of gross assessable interstate and international telecommunications and interconnected VoIP revenues. The contribution rate is reviewed quarterly and may increase or decrease, which would either increase or decrease our contributions to the USF. This is not materially adverse to our business as we currently choose to recover the cost of the contributions from our end user customers. However, climbing USF contributions may negatively impact our end users because they effectively make our products more expensive.

    Forbearance and Other Relief to Dominant Carriers

        The Communications Act permits the FCC to forbear from requiring telecommunications carriers to comply with certain of its regulations and provisions of the Communications Act if certain conditions are present that make enforcement of the regulations or statutory provisions unnecessary. Future reduction or elimination of federal regulatory and statutory requirements could free us from regulatory burdens, but might also increase the relative flexibility of our major competitors. As a result of grants of forbearance, our costs (and those of our competitors) of purchasing broadband services from carriers could increase significantly, as the rates, terms and conditions offered in non-tariffed "commercial agreements" may become less favorable and we may not be able to purchase services from alternative vendors.

    Multiple Tenant Properties

        The FCC has prohibited telecommunications carriers from entering into exclusive access agreements (or enforcing pre-existing exclusive arrangements) with building owners or managers in both commercial and residential multi-tenant environments. The FCC has also adopted rules requiring utilities (including ILECs) to provide telecommunications carriers (and cable operators) with reasonable and non-discriminatory access to utility-owned or -controlled conduits and rights-of-way in all multiple tenant environments (e.g., apartment buildings, office buildings and campuses) in those states where the state government has not certified to the FCC that it regulates utility pole attachments and rights-of-way matters. These requirements may facilitate our access (as well as the access of competitors) to customers in multi-tenant environments, at least with regard to our provision of telecommunications services.

        In an Order released November 13, 2007, the FCC found that contractual agreements between multiple dwelling unit ("MDU") owners and cable operators that grant exclusive access to the cable operator are proscribed as "unfair methods of competition." Under the rule, the FCC prohibits the enforcement of existing exclusivity clauses and the execution of new ones by cable operators and others subject to the relevant statutory provisions. MDUs include a multiple dwelling unit building and any other centrally managed residential real estate development (such as a gated community, mobile home park, or garden apartment complex). These requirements facilitate our access (as well as the access of competitors) to customers in MDU environments, at least with regard to our provision of cable services. They also, however, invalidate any of our existing exclusive access agreements covered by the rules.

    Customer Proprietary Network Information, Personally Identifiable Information and Customer Proprietary Information

        We are subject to specific customer privacy obligations with respect to our telecommunications and Video services. FCC rules protect the privacy of certain information about customers that telecommunications providers, including us, acquire in the course of providing voice telecommunications services. Such protected information, known as Customer Proprietary Network Information ("CPNI"), includes information related to the quantity, technological configuration, type, destination and the amount of use of a telecommunications offering. Certain states have also adopted state-specific CPNI rules. The FCC's rules require affected providers to implement policies to notify

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customers of their rights, take reasonable precautions to protect CPNI and notify law enforcement agencies if a breach of CPNI occurs. If a federal or state regulatory body determines that we have breached the applicable regulations or implemented the FCC's requirements incorrectly, we could be subject to fines or penalties.

        Section 631 of the Communications Act requires that we protect the privacy of our Video customers. In general, that section: (i) requires that cable operators such as us notify customers of our obligations and their privacy rights; and (ii) prohibits cable operators from: (a) disclosing cable customer personally identifiable information (PII) without customer consent or a court order, except in limited situations; and (b) using the cable system to collect PII without customer consent, unless necessary to provide service or prevent theft of service. Section 631 specifically provides our customers with the right to bring legal action against us if we fail to comply with the statutory requirements.

        In addition, statutory protections in Section 222 of the Communications Act, including the duty to protect Customer Proprietary Information (interpreted to include CPNI and PII), apply to telecommunications, including broadband Internet access service.

        Privacy continues to be a major focus of Congress, the Federal Trade Commission, the FCC, the U.S. Department of Commerce and the states. Additional laws, regulations or advisory guidelines could affect our ability to use and share customer information under various additional circumstances.

    Taxes and Regulatory Fees

        We are subject to numerous federal, state and local taxes and regulatory fees, including, but not limited to, local sales taxes, franchise fees and PEG fees, FCC regulatory fees and PSC regulatory fees. We have procedures in place to ensure that we properly collect taxes and fees from our customers and remit such taxes and fees to the appropriate entity pursuant to applicable law and/or regulation. If our collection procedures prove to be insufficient or if a taxing, franchise or regulatory authority determines that our remittances were inadequate, we could be required to make additional payments, which could have a material adverse effect on our business.

    Environmental Regulation

        We are subject to a variety of federal, state, and local environmental, safety and health laws, and regulations, including those governing such matters as the generation, storage, reporting, treatment, handling, remediation, use, disposal and transportation of and exposure to hazardous materials, the emission and discharge of hazardous materials into the atmosphere, the emission of electromagnetic radiation, the protection of wetlands, historic sites and threatened and endangered species, and health and safety. We also may be subject to laws requiring the investigation and cleanup of contamination at sites we own or operate or at third-party waste disposal sites. Such laws often impose joint and strict liability even if the owner or operator did not know of, or was not responsible for, the contamination. We operate several sites in connection with our operations. Our switch sites and some customer premise locations are equipped with backup power sources in the event of an electrical failure. Each of our switch site locations has battery and diesel fuel powered backup generators, and we use batteries to back up some of our customer premise equipment. In addition, some of our sites may have potential contamination risks from historical or surrounding activities. We are not aware of any liability or alleged liability at any owned or operated sites or third-party waste disposal sites that would be expected to have a material adverse effect on us.

Franchises

        As described above, cable television systems generally are constructed and operated under the authority of nonexclusive franchises, granted by local and/or state governmental authorities. Cable system franchises typically contain many conditions, such as time limitations on commencement and completion of system construction, customer service standards including number of channels, the provision of free service to schools and certain other public institutions, the maintenance of insurance

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and indemnity bonds, the payment of franchise fees and the support of PEG channels. We are currently in the process of renegotiating a small number of expired franchises. We anticipate that those franchises will be renewed. Local regulation of cable television operations and franchising matters is currently subject to federal regulation under the Communications Act and the corresponding regulations of the FCC. The FCC has taken recent steps toward streamlining the franchising process. See "—Legislation and Regulation" and "—Regulation of Cable Services" above.

        Prior to the scheduled expiration of franchises, we may initiate renewal proceedings with the relevant franchising authorities. The Cable Communications Policy Act of 1984 provides for an orderly franchise renewal process in which the franchising authorities may not unreasonably deny renewals. If a renewal is withheld and the franchising authority takes over operation of the affected cable system or awards the franchise to another party, the franchising authority must pay the cable operator the "fair market value" of the system. The Cable Communications Policy Act of 1984 also established comprehensive renewal procedures requiring that the renewal application be evaluated on its own merit and not as part of a comparative process with other proposals.

Intellectual Property

        We rely on patent, copyright, trademark and trade secret laws and licenses that are proprietary to our business, as well as our key vendors, along with other agreements with our employees, customers, suppliers and other parties, to establish and maintain our intellectual property rights in technology and the products and services used in our operations. We believe we own or have the right to use all of the intellectual property that is necessary for the operation of our business as we currently conduct it.

Employees

        As of March 31, 2017, we had approximately 3,000 full-time employees. We consider our relationship with our employees to be good and we structure our compensation and benefit plans in order to attract and retain high-performing employees. We will need to recruit additional employees in order to implement our growth plan. We recruit from several major industries for employees with skills in high-speed data, video and telephony technologies. None of our employees are subject to collective bargaining agreements.

Properties

        We lease our executive corporate offices in Englewood, Colorado. All of our other real or personal property is owned or leased by our subsidiaries.

        Our subsidiaries own or lease the fixed assets necessary for the operation of their respective businesses, including office space, headend facilities, cable television and telecommunications distribution equipment, telecommunications switches and customer premise equipment and other property necessary for our subsidiaries operations. The physical components of our broadband network, require maintenance and periodic upgrades to support the new services and products we introduce. Our management believes that our current facilities are suitable and adequate for our business operations for the foreseeable future.

Legal Proceedings

        The Company is party to various legal proceedings (including individual, class and putative class actions) arising in the normal course of its business covering a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, programming, taxes, fees and surcharges, consumer protection, trademark and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers. In addition, in the normal course of business, we are subject to various other legal and regulatory claims and proceedings directed at or involving us, which in our opinion will not have a material adverse effect on our financial position or results of operations or liquidity.

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MANAGEMENT

Executive Officers, Directors and Key Employees

        Upon closing of the offering, the names, ages, and current positions of our current executive officers, members of our board of directors and certain key employees are listed in the table below.

Name
  Age   Position

Steven Cochran

    46   Chief Executive Officer and Director

Richard E. Fish, Jr. 

    51   Chief Financial Officer

Cash Hagen

    42   Chief Operating Officer

Scott Russell

    49   Chief Marketing and Sales Officer

Cathy Kuo

    51   Executive Vice President, Strategy & Engagement

Craig Martin

    65   General Counsel and Secretary

David Burgstahler

    48   Director

Brian Cassidy

    43   Director

Daniel Kilpatrick

    36   Director

Jeffrey Marcus

    70   Chairman of the Board

Phil Seskin

    53   Director

Joshua Tamaroff

    31   Director

        The following is a brief biography of our executive officers, directors and certain key employees:

        Steven Cochran, Chief Executive Officer and Director.     Mr. Cochran is our Chief Executive Officer and a member of our board of directors, positions he has held since April 1, 2014. Before his appointment as CEO, he had been our Chief Financial Officer from October 2002 until July 2012, our Chief Operating Officer from 2008 to April 1, 2014, and our President from 2010 to April 1, 2014. Prior to joining WOW!, Mr. Cochran was with Millennium Digital Media from May 1998 to October 2002 where he served as the Senior Vice President and Chief Financial Officer during the last year of his time there. Mr. Cochran also worked in public accounting at Arthur Andersen. Mr. Cochran received his undergraduate degree in Economics and holds a Master of Accounting Science from the University of Illinois—Urbana Champaign. Mr. Cochran was selected to serve on our Board of Directors because of the leadership skills, strategic guidance and experience he brings as our Chief Executive Officer and the operational expertise from his prior experience in the industry.

        Richard E. Fish, Jr., Chief Financial Officer.     Mr. Fish joined the WOW! team in January 2013 as Chief Financial Officer and brings to WOW! 24 years of experience in various financial, operational and business development leadership positions in the telecommunications industry. Prior to joining WOW!, Mr. Fish served as the Executive Vice President & Chief Financial Officer at ITC^DeltaCom where he was responsible for all finance, accounting and treasury related functions. Prior to ITC^DeltaCom, Mr. Fish was the Chief Financial Officer at ICG Communications and served in various financial and operating leadership positions with AT&T and Teleport Communications Group. Mr. Fish began his career with Arthur Andersen, received his undergraduate degree from the University of Nebraska and is a Certified Public Accountant.

        Cash Hagen, Chief Operating Officer.     Mr. Hagen is our Chief Operating Officer, a position he has held since October 2016. Prior to accepting such position, Mr. Hagen served as our Chief Technical Officer, since joining WOW! in January 2008. Prior to his experience at WOW!, Mr. Hagen served in various technology and business development positions at Nortel Networks from January 2003 to December 2007. He has also held a number of leadership positions at BigBand Networks, ADC Telecommunications, Antec and Cox Communications. He received his undergraduate degree from Lindenwood University and he holds a Master of Business Administration degree from Benedictine University.

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        Scott Russell, Chief Marketing and Sales Officer.     Mr. Russell was appointed as our Chief Marketing and Sales Officer in September 2016. He previously served as our Vice President, Marketing from May 2016 to September 2016. Mr. Russell brings over 22 years of Internet, network and communications experience to WOW!. Prior to joining WOW!, Mr. Russell served as Vice President and General Manager at CenturyLink from 2011 to 2015. From 2000 to 2011, Mr. Russell held executive level positions at AT&T Broadband, Level 3 and Qwest Communications. Additionally, Mr. Russell served in various capacities at Tele-Communications, Inc. and Southern Pacific Lines. Mr. Russell received a Master of Science in marketing from the University of Colorado-Denver and a Bachelor of Science in business administration from Lewis and Clark College.

        Cathy Kuo, Executive Vice President, Strategy & Engagement.     Ms. Kuo is our Executive Vice President, Strategy & Engagement, a position she has held since October 2016. Ms. Kuo previously served as our Chief Operating Officer, since April 1, 2014. Before her appointment as Chief Operating Officer, Ms. Kuo had been our Chief Marketing Officer since December 2010, and Senior Vice President of Marketing since 2001. Prior to joining WOW!, Ms. Kuo served as Vice President of Branding & Partnership Marketing and Vice President of Consumer Offerings for AT&T Broadband from February 1999 to November 2001. Ms. Kuo started working in the cable industry in 1997 when she joined Tele-Communications, Inc. as Director of Marketing. She received her undergraduate degree in Business Economics from Brown University.

        Craig Martin, General Counsel and Secretary.     Mr. Martin is the Company's General Counsel and Secretary, positions he has held since joining our predecessor in January 2000. Prior to joining WOW!, Mr. Martin served as the Chief Operating Officer and Chairperson of the cable and telecommunications practice group of Howard & Howard Attorneys, PC. He received his undergraduate degree from Amherst College, his Master of Science from Trinity College, Dublin and his Juris Doctor degree from the University of Notre Dame.

        David Burgstahler, Director.     Mr. Burgstahler is the President and Co-Managing Partner of Avista and the Chief Executive Officer of Avista Healthcare Public Acquisition Corp. Mr. Burgstahler was a founding partner of Avista in 2005 and since 2009, has been the President of Avista. Prior to forming Avista, Mr. Burgstahler was a partner of DLJ Merchant Banking Partners. Mr. Burgstahler was at DLJ Investment Banking from 1995 to 1997 and at DLJ Merchant Banking Partners from 1997 through 2005. Prior to that, Mr. Burgstahler worked at Andersen Consulting (now known as Accenture plc) and McDonnell Douglas (now known as The Boeing Company). Mr. Burgstahler currently serves as a Director of ACP Mountain Holdings, Inc., Avista Healthcare Public Acquisition Corp., INC Research Holdings, Inc., Lantheus Holdings Inc. and Osmotica Holdings S.C.Sp. Mr. Burgstahler previously served as a Director of AngioDynamics, BioReliance Holdings, Inc., ConvaTec Group plc, and Warner Chilcott plc. Mr. Burgstahler holds a Bachelor of Science in Aerospace Engineering from the University of Kansas and a Master of Business Administration from Harvard Business School. Mr. Burgstahler was selected to serve on our Board of Directors because of his extensive finance and management background, with over 20 years in banking and private equity finance, and his experience serving as a director for a diverse group of private and public companies.

        Brian Cassidy, Director.     Mr. Cassidy is a Partner at Crestview Partners, having joined the firm in 2004. He currently serves as co-head of the Crestview Partners' media and communications investment strategy. Mr. Cassidy is currently a director of Crestview portfolio companies Camping World Holdings, Inc., NEP Group, Inc., Interoute Communications Holdings, the parent company of CORE Media Group and Cumulus Media, Inc. Mr. Cassidy was previously involved with the firm's investments in ValueOptions, Inc., OneLink Communications, Charter Communications, Inc. and Insight Communications. Prior to joining Crestview, Mr. Cassidy worked in private equity at Boston Ventures, where he invested in companies in the media and communications, entertainment and business services industries. Mr. Cassidy also worked for one year as the acting CFO of a portfolio company of Boston

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Ventures. Mr. Cassidy was also an investment banking analyst at Alex Brown & Sons, where he completed a range of financing and M&A assignments for companies in the consumer and business services sectors. Mr. Cassidy received a Master of Business Administration from the Stanford Graduate School of Business and a Bachelor of Arts degree in Physics from Harvard College. Mr. Cassidy was selected to serve on our Board of Directors because of his leadership skills as co-head of Crestview's media and communications investment strategy, his current and prior directorships experience in this industry, and his private equity investment and company oversight experience and background with respect to acquisitions, debt financings and equity financings.

        Daniel Kilpatrick, Director.     Mr. Kilpatrick is a Principal at Crestview Partners and joined the firm in 2009 after receiving his Master of Business Administration from the Stanford Graduate School of Business. Mr. Kilpatrick works across a variety of sectors, including media. Mr. Kilpatrick is currently a director of Crestview portfolio companies Accuride Group Holdings, Inc., Camping World Holdings, Inc., the parent company of CORE Media Group and NYDJ Apparel and was previously a director of Symbion, Inc. Mr. Kilpatrick received his Bachelor of Arts degree from Yale University. Mr. Kilpatrick was selected to serve on our Board of Directors because of his private equity investment and company oversight experience and background with respect to acquisitions, debt financings and equity financings.

        Jeffrey Marcus, Chairman of the Board.     Mr. Marcus joined Crestview as a Partner in 2004 and is a member of its Investment Committee. Mr. Marcus is the co-head of Crestview's media and communications investment strategy. Mr. Marcus previously served as the President and Chief Executive Officer of AMFM (formerly Chancellor Media Corporation), one of the nation's largest radio broadcasting companies. Mr. Marcus was also the Founder and Chief Executive Officer of Marcus Cable, which at the time of its sale in 1998 was the largest privately held cable company in the United States. Prior to his involvement with Marcus Cable, Mr. Marcus founded Marcus Communications, which was merged into Western Tele-Communications. Following such merger, Mr. Marcus was the CEO of the renamed company, WestMarc Communications. Mr. Marcus is a Director of Camping World Holdings, Inc. and NEP Group, Inc. and serves as Chairman of Cumulus Media. He has served on a variety of other public and private company boards of directors, including Brinker International, AMFM, Charter Communications, Insight Communications, OneLink Communications, WestMarc Communications and DS Services, where he served as chairman. Mr. Marcus received a Bachelor of Arts degree in economics from the University of California-Berkeley. Mr. Marcus was selected to serve on our Board of Directors because of his extensive experience as CEO of several companies in the broadcast and communications industry, his leadership skills as co-head of Crestview's media and communications investment strategy, and his current and prior directorship experience in the industry.

        Phil Seskin, Director.     Prior to joining Avista in 2012 as an Industry Executive, Mr. Seskin spent more than two decades at Verizon Communications, most recently as a Senior Vice President of Corporate Development. At Verizon, Mr. Seskin worked on initiatives that spanned more than 20 countries and involved strategy, acquisitions, operating issues, valuation, cross-border currency, tax and regulatory issues. Mr. Seskin also played a significant role in securing board, regulatory, and other necessary approvals in transactions. Prior to his role as Senior Vice President of Corporate Development, Mr. Seskin held a number of positions at Verizon, including Vice President, Corporate Development, Managing Director, Mergers and Acquisitions; and Managing Director, Financial Planning and Investment Analysis. Mr. Seskin also founded Verizon Strategic Investments, the company's venture capital operation. Mr. Seskin was instrumental in building new companies and creating shareholder value through mergers, acquisitions, joint ventures, organic investment, operating initiatives, and divestitures, totaling over $150 billion in the United States, Europe, Latin America and Asia. Mr. Seskin serves as a Director of Telular Corporation, and is a Trustee of Big Brothers Big Sisters of New York City. He has also served as a Director of Databank Holdings and as a Trustee of

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New York Downtown Hospital until its merger with New York Presbyterian. Mr. Seskin received a Bachelor of Arts degree from Adelphi University in 1985 and a Master of Business Administration in Finance in 1992 from Hofstra University. Mr. Seskin was selected to serve on our Board of Directors because of his industry knowledge and operating expertise developed over years of experience in the industry and his leadership skills and strategic guidance.

        Joshua Tamaroff, Director.     Mr. Tamaroff joined Avista in 2009 and serves as a Vice President. Prior to joining Avista, Mr. Tamaroff worked as an Analyst in the leveraged finance group at Lehman Brothers and Barclays Capital. Mr. Tamaroff currently serves as a director of InvestorPlace Media and OptiNose Inc. Mr. Tamaroff received a Bachelor of Science from Cornell University and a Master of Business Administration from the Wharton School at the University of Pennsylvania, where he was a Palmer Scholar. Mr. Tamaroff was selected to serve on our Board of Directors because of his private equity investment and company oversight experience and background with respect to acquisitions, debt financings and equity financings.

Controlled Company

        Upon completion of this offering, the Sponsors will continue to control a majority of the voting power of our outstanding common stock. As a result, we expect to be a "controlled company" within the meaning of the corporate governance rules of the New York Stock Exchange. As a controlled company, exemptions under the standards will free us from the obligation to comply with certain corporate governance requirements, including the requirements:

        Since we intend to avail ourselves of the "controlled company" exception under the New York Stock Exchange rules, neither our Nominating and Corporate Governance Committee nor our Compensation Committee will be composed entirely of independent directors. These exemptions do not modify the independence requirements for our Audit Committee, and we intend to comply with the requirements of Rule 10A-3 of the Exchange Act and the rules of the New York Stock Exchange within the applicable time frame. These rules require that our Audit Committee be composed of at least three members, a majority of whom will be independent within 90 days of the date of this prospectus, and all of whom will be independent within one year of the date of this prospectus.

        Our Board of Directors has affirmatively determined that Phil Seskin and Jeffrey Marcus are independent directors under the applicable rules of the New York Stock Exchange and that Mr. Seskin is also an independent director for purposes of Rule 10A-3 of the Exchange Act.

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Classification of Board of Directors

        Our amended and restated certificate of incorporation will provide that our Board of Directors will be divided into three classes of directors, with the classes as nearly equal in number as possible. Upon completion of this offering, our directors will be divided among the three classes as follows:

        Directors in a particular class will be elected for three-year terms at the annual meeting of stockholders in the year in which their terms expire. As a result, only one class of directors will be 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.

Stockholders' Agreement

        In connection with this offering, we expect to enter into a Stockholders' Agreement with the Sponsors and members of management. The Stockholders' Agreement will provide, among other things, that each Sponsor will have the right to designate:

        The initial Avista designees will be Mr. Seskin, Mr. Tamaroff and Mr. Burgstahler. The initial Crestview designees will be Mr. Marcus, Mr. Kilpatrick and Mr. Cassidy. We will be required to take all necessary action to cause the Board of Directors to ensure the composition of our Board of Directors as set forth above. See "Certain Relationships and Related Party Transactions—Stockholders' Agreement."

Board Committees

        Upon completion of this offering, our Board of Directors will have three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of the committees will report to the Board of Directors as they deem appropriate, and as the Board of Directors may request. The expected composition, duties and responsibilities of these committees are set forth below. In the future, our Board of Directors may establish other committees, as it deems appropriate, to assist it with its responsibilities.

Audit Committee

        The Audit Committee is responsible for, among other matters: (1) appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; (2) discussing with our independent registered public accounting firm their independence from management; (3) reviewing with our independent registered public accounting firm the scope and

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results of their audit; (4) approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; (5) overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual consolidated financial statements that we file with the SEC; (6) reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; (7) establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters; and (8) reviewing and approving related person transactions.

        Upon completion of this offering, our Audit Committee will consist of Brian Cassidy, as chair, Daniel Kilpatrick, Phil Seskin and Joshua Tamaroff. The SEC rules and the New York Stock Exchange rules require us to have one independent Audit Committee member upon the listing of our common stock on the New York Stock Exchange, a majority of independent directors on the Audit Committee within 90 days of the date of the completion of this offering and all independent Audit Committee members within one year of the date of the completion of this offering. Our Board of Directors has affirmatively determined that Phil Seskin meets the definition of "independent director" for purposes of serving on an Audit Committee under applicable SEC and the New York Stock Exchange rules, and we intend to comply with these independence requirements within the time periods specified.

        Our Board of Directors will adopt a new written charter for the Audit Committee, which will be available on our corporate website at www.wowway.com upon the completion of this offering. The information contained on, or that can be accessed through, our website does not constitute a part of this prospectus.

Compensation Committee

        The Compensation Committee will be responsible for, among other matters: (1) reviewing key employee compensation goals, policies, plans and programs; (2) reviewing and approving the compensation of our directors, chief executive officer and other executive officers; (3) reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and (4) administering our stock plans and other incentive compensation plans.

        Upon completion of this offering, our Compensation Committee will consist of David Burgstahler, as chair, and Jeffrey Marcus.

        Our Board of Directors will adopt a new written charter for the Compensation Committee, which will be available on our corporate website at www.wowway.com upon the completion of this offering. The information contained on, or that can be accessed through, our website does not constitute a part of this prospectus.

Nominating and Corporate Governance Committee

        The Nominating and Corporate Governance Committee will be responsible for, among other matters: (1) identifying individuals qualified to become members of our Board of Directors, consistent with criteria approved by our Board of Directors; (2) overseeing the organization of our Board of Directors to discharge the Board's duties and responsibilities properly and efficiently; (3) identifying best practices and recommending corporate governance principles; and (4) developing and recommending to our Board of Directors a set of corporate governance guidelines and principles applicable to us.

        Upon completion of this offering, our Nominating and Corporate Governance Committee will consist of Jeffrey Marcus, as chair, and David Burgstahler.

        Our Board of Directors will adopt a written charter for the Nominating and Corporate Governance Committee, which will be available on our corporate website at www.wowway.com upon the

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completion of this offering. The information contained on, or that can be accessed through, our website does not constitute a part of this prospectus.

Risk Oversight

        Our Board of Directors is currently responsible for overseeing our risk management process. The Board of Directors focuses on our general risk management strategy and the most significant risks facing us, and ensures that appropriate risk mitigation strategies are implemented by management. The Board of Directors is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters and significant transactions.

        Following the completion of this offering, our Board of Directors will delegate to the Audit Committee oversight of our risk management process. Our other board committees will also consider and address risk as they perform their respective committee responsibilities. All committees will report to the full Board of Directors as appropriate, including when a matter rises to the level of a material or enterprise level risk.

        Our management is responsible for day-to-day risk management. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, compliance and reporting levels.

Compensation Committee Interlocks and Insider Participation

        None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.

Code of Ethics

        We have adopted a written General Code of Ethics ("General Code of Ethics") which applies to all of our directors, officers and other employees, including our principal executive officer, principal financial officer and controller. In addition, we have adopted a written Code of Ethics for Executive Officers and Principal Accounting Personnel ("Senior Officer Code of Ethics") which applies to our principal executive officer, principal financial officer, controller and other designated members of our management. Copies of each code will be available on our corporate website www.wowway.com upon completion of this offering. The information contained on, or that can be accessed through, our website does not constitute a part of this prospectus. We will provide any person, without charge, upon request, a copy of our General Code of Ethics or Senior Officer Code of Ethics. Such requests should be made in writing to the attention of our Secretary at the following address: 7887 East Belleview Avenue, Suite 1000, Englewood, Colorado 80111.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

        This Compensation Discussion and Analysis ("CD&A") provides information regarding the 2016 fiscal year compensation program for each individual who served as a principal executive officer or principal financial officer during 2016 and the three other executive officers at fiscal year-end who were our most highly compensated executives, including each such executive who filled such position during any portion of 2016. Those individuals (the "named executive officers" or "NEOs") were:


(1)
Ms. Kuo served as the Company's Chief Operating Officer until October 2016 and assumed the role of Executive Vice President, Strategy & Engagement thereafter.

(2)
Mr. Hagen served as the Company's Chief Technical Officer until October 2016 and assumed the role of Chief Operating Officer thereafter.

(3)
Mr. Russell began serving as the Company's Chief Marketing and Sales Officer effective October 2016.

        Unless the context requires otherwise, references to the "Compensation Committee" or the "Committee" in this CD&A refer to the Compensation Committee of our Board.

Executive Summary

        The following is a summary of key aspects of our 2016 compensation programs for our named executive officers:

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        The Compensation Committee is generally charged with the oversight of our executive compensation program and is composed of Messrs. Burgstahler and Marcus. The Compensation Committee considers the proper alignment of executive pay with our values and strategy by overseeing executive compensation policies, measuring and assessing corporate performance and taking into account our CEO's performance assessment of our Company coupled with the individual performance of our other named executive officers. While the Compensation Committee has not historically used the services of independent compensation consultants, it may retain such services in the future to assist in the strategic review of programs and arrangements relating to executive compensation and performance.

Compensation Philosophy and Objectives

        The Company's 2016 compensation program for its executive officers was designed to attract, motivate, reward and retain key executives and employees to enhance membership interest value by emphasizing performance-based compensation. The Company believes that its compensation programs link performance to both annual and long-term goals and objectives and provides total compensation that is both fair and competitive.

        Our policy for allocating between currently paid and long-term compensation is to provide adequate base compensation to attract and retain personnel, while offering additional incentives to achieve short-term and long-term financial performance goals and to maximize long-term value for our members. Our compensation policy provides us the flexibility to allocate between short-term and long-term compensation and between cash and equity-based compensation. We provide cash compensation in the form of a base salary to meet competitive salary norms. In addition, we provide annual cash bonuses which reward executive achievement of short-term goals.

        In February 2016, our Board and Compensation Committee adopted a new long-term equity incentive program (the "Management Equity Plan") administered under the Racecar Holdings, LLC Profits Interest Plan in order to align executive pay with long term gains in membership interest value and long-term financial performance results. The Management Equity Plan contemplates that Management Incentive Units will be issued pursuant to grant agreements, pursuant to which 50% of the units will time-vest ratably at 25% per year over a four year period ("Time Vesting Units") and 50% of the units will vest in accordance with the achievement of certain performance targets ("Performance Vesting Units," and together with the Time Vesting Units, "Incentive Units").

        The primary objectives of our 2016 compensation program are to:

        In 2017, we expect that our Compensation Committee will continue to revisit our compensation program and may make adjustments in light of changes to Parent's ownership structure, current market conditions and potential shifts in strategic direction.

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Compensation Determination Process

        The Company does not have a fixed internal pay equity scale but rather determines the compensation for each position based upon individual responsibilities and market dynamics. The job titles of our named executive officers in 2016 were as follows: Steven Cochran, Chief Executive Officer; Richard E. Fish, Jr., Chief Financial Officer; Craig Martin, General Counsel and Secretary; Cathy Kuo, Chief Operating Officer until October 2016 and thereafter Executive Vice President, Strategy & Engagement; Cash Hagen, Chief Technical Officer until October 2016 and thereafter Chief Operating Officer; and Scott Russell, Chief Marketing and Sales Officer since October 2016.

        Peer group analysis is a significant factor in establishing total compensation for our named executive officers. The total compensation among our named executive officers varies as a result of each executive's individual performance and overall duties and responsibilities.

        All executive compensation decisions are made by our Compensation Committee. The Committee takes significant direction from the recommendations of our CEO regarding the design and implementation of the executive compensation program, as Mr. Cochran has significant involvement in, and knowledge of, the Company's business goals, strategies and performance, the overall effectiveness of the executive officers and each person's individual contribution to the Company's performance. In 2016, Mr. Cochran developed and recommended appropriate performance measures and targets for individual compensation levels. Mr. Cochran does not make recommendations with respect to his own compensation. In addition, when making its decisions, the Compensation Committee considers the following factors:

        Because the Company is not required to conduct a say-on-pay vote, it did not consider such a vote in its compensation-setting practices.

        In making annual compensation determinations for the named executive officers, the Committee primarily focuses on target annual compensation, which consists of base salary and a target bonus. The Committee also reviewed subjective factors for each named executive officer, although subjective factors historically have not resulted in material changes to the target annual compensation.

        We have historically used comparative information acquired through industry surveys and comparative company analysis in formulating recommendations for annual base salary adjustments and bonus payments.

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        Our Compensation Committee generally targets the compensation level that allows us to recruit highly qualified and experienced executive talent from comparable or larger-sized organizations in the cable and telecommunications industry.

Elements of Executive Compensation

        Our compensation program is weighted towards performance-based compensation, reflecting our philosophy of increasing our long-term value and supporting strategic imperatives, as discussed above. Total compensation and other benefits consist of the following elements:

        We do not offer a defined benefit pension plan. The Compensation Committee supports a competitive employee benefit package, but does not support executive perquisites or other supplemental programs targeted to executives.

        Each named executive officer received a base salary paid in cash. The employment agreements for each named executive officer established a base salary, subject to annual increases at the Company's discretion. Annual merit increases are generally effective in May of the applicable year. The Committee and the CEO rely primarily on peer group analyses in determining annual salary increases while also considering the Company's overall performance, and the individual's experience, current performance and potential for advancement. Named executive officers, consistent with most WOW! employees in 2016, received a 2% merit increase during 2016.

        The following table sets forth the approximate base salaries approved for the named executive officers in 2015 and 2016, reflecting the increases effective in April of 2015 and May of 2016:

Name
  2015
Base Salary
  2016
Base Salary
 

Steven Cochran

  $ 625,000   $ 637,500  

Cathy Kuo(1)

  $ 384,375   $ 392,063  

Craig Martin

  $ 357,247   $ 364,393  

Richard Fish, Jr. 

  $ 322,875   $ 329,333  

Cash Hagen

  $ 322,875   $ 329,333  

Scott Russell(2)

    N/A   $ 240,000  

(1)
Ms. Kuo's 2016 base salary was decreased to $290,000 in October 2016 consistent with a change in position and responsibilities.

(2)
Mr. Russell's 2016 base salary was increased to $315,000 in October 2016 consistent with a change in position and responsibilities.

    2016 Management Bonus Plan Compensation

        Each year, our Compensation Committee, in consultation with the Company's CEO, establishes an annual incentive bonus plan. In 2016, that plan was the 2016 MBP, which established incentive cash bonuses for each of our named executive officers based upon the achievement of certain business and individual or department objectives, including most prominently adjusted EBITDA (40% of total bonus pool). For the purpose of the 2016 MBP, we define adjusted EBITDA as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), gains (losses)

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realized and unrealized on derivative instruments, management fees to related party, the write-up or write-off of any asset, debt modification expenses, loss on extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including equity based compensation expense) and certain other income and expenses, as further defined in our credit facilities. For compensation determination purposes, certain pro forma adjustments relating to acquisitions and dispositions are made to adjusted EBITDA. The Compensation Committee also evaluated other factors such as capital expenditure goals, certain goals relating to business services and HSD growth, as well as qualitative factors such as customer experience goals. The evaluations are not entirely driven by formula, but rather ambitious targets were set and various factors considered in evaluating the degree to which these overall objectives were met.

        Bonus levels are set as a percentage of base salary and are established based upon the individual's job-related responsibilities and corresponding impact on overall Company performance. Assuming achievement of the Company's designated performance goals as described above and satisfactory performance of the named executive officer (as determined by the Compensation Committee and/or the CEO), either the Compensation Committee or the CEO makes the final determination of participant bonus awards for the named executive officers other than the CEO. The Compensation Committee makes the final determination of a bonus award as it relates to the CEO.

        The following table sets forth the specific target bonus (specified as a percentage of base salary, as in place when the targets were set), after adjustment for the merit increase described above for each of the named executive officers:

Name
  Target Bonus
(% of Base Salary)
  Target Bonus
Amount ($)
 

Steven Cochran

    100 % $ 637,500  

Cathy Kuo(1)

    50 % $ 196,031  

Craig Martin

    40 % $ 145,757  

Richard Fish, Jr. 

    40 % $ 131,733  

Cash Hagen

    40 % $ 131,733  

Scott Russell(1)

    40 % $ 96,000  

(1)
Target Bonus as a percentage of Base Salary Target Bonus Amounts for each of Ms. Kuo and Mr. Russell were prorated in connection with their respective transitions into new roles. In the case of Ms. Kuo, the Target Bonus Amount was calculated based on 50% of her Base Salary until October 2016 and 40% of her reduced Base Salary for the balance of 2016. For Mr. Russell, the Target Bonus percentage was calculated based on 30% of his Base Salary until October 2016 and 40% of his increased Base Salary for the balance of 2016.

        In general, and subject to the discretion of the Compensation Committee, bonuses were designed to be paid out under the 2016 MBP if certain internal performance and operating metrics were met, including most prominently the Company's adjusted EBITDA. The threshold for any bonus to be paid was set at 30% achievement of the target goals, while the maximum achievable bonus was 150% of each named executive officer's target bonus, with linear increases between such threshold, target and maximum amounts. In all cases, the Compensation Committee and the CEO retain the authority to adjust reported financial measures for unusual or nonrecurring items that impact the results in a given year and/or that were not contemplated when the original targets were set. They are also permitted to use negative discretion and determine not to award any bonuses under the 2016 MBP. The Compensation Committee customarily utilizes this discretion as appropriate.

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        Taking into account the evaluation of the Company's achievement of the goals described above and Company performance as a whole, the Compensation Committee elected to award each named executive officer 39.6% of the target bonus amount under the 2016 MBP.

    Management Equity Plan

        In February 2016, our Board adopted the Management Equity Plan. Prior to the Crestview investment, our Parent had previously issued incentive equity ("Prior Incentive Units") under the Parent's Fourth Amended and Restated Operating Agreement (the "Prior Operating Agreement"). The Prior Incentive Units were either sold, forfeited, or converted into equity in connection with the Crestview investment. The Management Equity Plan was created to refresh the Company's long-term equity plan in connection with the Amended Operating Agreement. See "—Narrative to Summary Compensation Table and Grants of Plan-Based Awards" for a description of the Management Equity Plan. Grants under the Management Equity Plan are not expected to be automatically made on an annual basis. However, as a means to create meaningful long-term incentives to management and to refresh the employee incentive program for retention purposes, on May 31, 2016 new Incentive Units were granted to our named executive officers as follows: Mr. Cochran was awarded 29,107 Incentive Units, Mr. Fish was awarded 19,502 Incentive Units, Mr. Hagen was awarded 17,464 Incentive Units, and each of Ms. Kuo and Messrs. Martin and Russell was awarded 11,643 Incentive Units.

    Retirement Plans

        In order to attract, retain and pay market levels of compensation, we aim to provide benefits to our named executive officers that are consistent with market practices. We offer a 401(k) qualified defined contribution retirement plan for our employees, including named executive officers and we match 25% of each participant's voluntary contributions subject to a limit of the first 4% of the participant's compensation. The matching contributions vest 25% annually over a four-year period.

    Health and Welfare Benefits

        Our named executive officers are eligible to participate in each of our employee and health and welfare benefit arrangements on the same basis as our other employees (subject to, and in accordance with, applicable laws). This is a fixed component of compensation, and these benefits are provided on a non-discriminatory basis to all employees.

    Perquisites or Other Benefits

        Other than the benefits described in this CD&A, we do not currently provide any perquisites or other benefits to our named executive officers.

    Equity Ownership Guidelines

        Prior to the Crestview investment, the Prior Incentive Units were subject to the provisions of the amended and restated Members Agreement dated July 17, 2012 and the amended and restated Registration Rights Agreement dated May 1, 2006 (as further revised by way of amendment dated July 17, 2012) which, among other things, restricted the transferability of such units in order to ensure alignment with our equity investors. Future grants of equity Incentive Units will be subject to the provisions of the Amended Operating Agreement, the Management Equity Plan developed pursuant thereto, as well as the amended and restated Registration Rights Agreement dated December 18, 2015. We do not maintain formal equity ownership guidelines, and do not expect to do so in the near term.

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    Severance and Change in Control Benefits

        We have entered into employment agreements with each of our named executive officers. These employment agreements provide for base salary, annual discretionary bonuses and employee benefits over specified terms of employment. Each of these agreements provides for certain payments and other benefits if the executive's employment is terminated by us without cause or by the executive for good reason. In each case, severance payments are subject to signing a release and our executives are subject to non-competition, non-solicitation and confidentiality restrictions. See the subsection "—Potential Payments upon Termination or Change in Control" for a description of these employment agreements, including the applicable severance and change in control benefits.

    Non-qualified Deferred Compensation Plan

        In July 2007, we implemented a non-qualified deferred compensation plan. Under this plan, certain members of management and other highly compensated employees may elect to defer a portion of their annual compensation, subject to certain percentage limitations. The assets and liabilities of the plan are consolidated within the Company's financial statements. The assets of the plan are specifically designated as available to the Company solely for the purpose of paying benefits under the Company's deferred compensation plan. However, in the event the Company became insolvent, the investments would be available to all unsecured general creditors.

    Tax and Accounting Implications

        In 2016, we were not subject to Section 162(m) of the Code. In the event we become subject to Section 162(m) of the Code, the Compensation Committee will consider the impact of Section 162(m) in the design of its compensation strategies annually.

        The Compensation Committee operates its compensation programs with the intention of either complying with, or being exempt from, the requirements of Section 409A of the Code. We account for stock-based payments with respect to our long-term equity incentive award program in accordance with the requirements of Financial Accounting Standard Board ("FASB") ASC 718—Stock Compensation ("ASC 718").

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SUMMARY COMPENSATION TABLE

        The table below summarizes the total compensation paid to, or earned by, the named executive officers in 2016, 2015 and 2014.

Name and Principal Position
  Year   Salary   Incentive
Units(1)
  Non-Equity
Incentive Plan
Compensation
  All Other
Compensation
  Total  

Steven Cochran

    2016   $ 633,173   $ 1,112,075   $ 252,616   $ 292,915 (2) $ 2,290,779  

Chief Executive Officer

    2015   $ 620,384       $ 562,559   $ 12,949 (3) $ 1,195,892  

    2014   $ 605,919           $ 15,699 (4) $ 621,618  

Craig Martin

    2016   $ 361,920   $ 448,838   $ 57,758   $ 54,244 (5) $ 922,760  

General Counsel and

    2015   $ 354,566       $ 128,622   $ 5,059 (6) $ 488,247  

Secretary

    2014   $ 349,504           $ 2,593 (7) $ 352,097  

Richard E. Fish, Jr. 

    2016   $ 327,097   $ 751,802   $ 52,201   $ 93,451 (8) $ 1,224,551  

Chief Financial Officer

    2015   $ 320,452       $ 116,247       $ 436,699  

    2014   $ 310,385               $ 310,372  

Cash Hagen

    2016   $ 327,097   $ 673,237   $ 52,201   $ 115,319 (9) $ 1,167,854  

Chief Operating Officer

    2015   $ 320,452       $ 116,247   $ 5,237 (10) $ 441,936  

    2014   $ 311,194           $ 2,881 (11) $ 314,075  

Cathy Kuo

    2016   $ 365,849   $ 448,838   $ 69,860   $ 109,633 (12) $ 994,180  

Executive Vice President,

    2015   $ 381,491       $ 172,987   $ 5,163 (13) $ 559,641  

Strategy & Engagement

    2014   $ 357,567           $ 4,390 (14) $ 361,957  

Scott Russell(15)

    2016   $ 150,462   $ 475,791   $ 20,562       $ 646,815  

Chief Marketing and Sales Officer

                                     

(1)
This column reports information with respect to the Incentive Units that were granted to our named executive officers in 2014, 2015 and 2016.

With respect to the Incentive Units granted in 2014 under the Prior Operating Agreement, the Company engaged a valuation expert, Fair Value Advisors, to assist in determining the grant date value of the Incentive Units awards in accordance with FASB ASC 718. A binomial fair value model was used and resulted in an immaterial amount for all Incentive Units granted in 2012, less than $2,000. The Company, using a similar binomial fair value model for its 2013 and 2014 awards, determined that the grant date value of the Incentive Units was immaterial. As such, no grant date fair value is included in this column for these awards. This amount does not necessarily reflect the actual value a named executive officer may have received upon a sale or conversion of such awards.

With respect to the Incentive Units granted in 2016 under the Amended Operating Agreement, the Company engaged a valuation expert, KPMG LLP, to assist in determining the grant date value of the Incentive Units awards in accordance with FASB ASC 718. Using a market approach which derives value from a recent transaction which involved the Company's equity. Based on this market approach the Company used an option pricing method ("OPM") due to the complexity of its capital structure. The OPM backsolve was then constructed where the total equity value is dependent variable that is necessary to reconcile to the recent transaction event that included equity. Based on this methodology the Company determined that the grant date fair value of the Time Vesting Units was $77.10 per unit and utilized such value for purposes of compensation expense which is recognized as such units vest. The grant date fair value of the Performance Vesting Units, due to the speculative nature of the vesting conditions, are not included in the Company's compensation expense or the tables above, rather the Company expects to book such expense when, as, and if such Performance Vesting Units vest.

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(2)
For 2016, consists of a $285,713 cash payment received pursuant to a retention plan adopted by the Company in connection with the termination of certain profits interests in the Company previously forfeited by plan participants upon the closing of the Crestview investment (a "retention plan payment"), a distribution of $2,906 from the Company's 401(k) plans made for compliance reasons, and $4,296 in earnings on the Company's non-qualified deferred compensation plan.

(3)
For 2015, consists of a distribution of $5,287 from the Company's 401(k) plans made for compliance reasons, and $7,662 in earnings on the Company's non-qualified deferred compensation plan.

(4)
For 2014, consists of employer contributions to the Company's 401(k) plan and earnings on the Company's non-qualified deferred compensation plan.

(5)
For 2016, consists of a $51,378 retention plan payment, a distribution of $2,719 from the Company's 401(k) plans made for compliance reasons, and $147 in earnings on the Company's non-qualified deferred compensation plan.

(6)
For 2015, consists of a $5,059 distribution of the Company's 401(k) plans made for compliance reasons.

(7)
For 2014, consists of employer contributions to the Company's 401(k) plan.

(8)
For 2016, consists of a retention plan payment.

(9)
For 2016, consists of a $112,429 retention plan payment, and $2,890 distribution of the Company's 401(k) plan made for compliance reasons.

(10)
For 2015, consists of $5,237 distribution of the Company's 401(k) plan made for compliance reasons.

(11)
For 2014, consists of employer contributions to the Company's 401(k) plan made for compliance reasons.

(12)
For 2016, consists of a retention plan payment.

(13)
For 2015, consists of $5,163 distribution of the Company's 401(k) plans made for compliance reasons.

(14)
For 2014, consists of employer contributions to the Company's 401(k) plan.

(15)
Mr. Russell was appointed as an executive officer in October 2016.

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GRANTS OF PLAN-BASED AWARDS IN 2016

        The following table provides information about plan-based awards granted to the named executive officers in 2016.

 
   
  Estimated Possible Payouts
Under Non-Equity
Incentive Plan Awards
  Estimated Possible Payouts
Under Equity Incentive
Plan Awards(1)
  All Other
Stock
Awards:
Number of
Units
(#)(2)
  Grant Date
Fair Value
of
Stock
Awards
($)(3)
 
Name
  Performance
Period/Grant
Date
  Threshold
($)
  Target
($)
  Maximum
($)
  Threshold
(#)
  Target
(#)
  Maximum
(#)
 

Steven Cochran

    5/31/2016   $ 191,250   $ 637,500   $ 956,250         14,553.5         14,553.5   $ 1,112,075  

Cathy Kuo

    5/31/2016   $ 43,986   $ 146,619   $ 219,929         5,821.5         5,821.5   $ 448,838  

Cash Hagen

    5/31/2016   $ 39,520   $ 131,733   $ 197,560         8,732.0         8,732.0   $ 673,237  

Craig Martin

    5/31/2016   $ 47,327   $ 157,757   $ 236,635         5,821.5         5,821.5   $ 448,838  

Richard E. Fish, Jr. 

    5/31/2016   $ 39,250   $ 131,733   $ 197,560         9,751.0         9,751.0   $ 751,802  

Scott Russell

    5/31/2016   $ 30,960   $ 103,200   $ 154,800         1,750.0         1,750.0   $ 134,925  

Scott Russell

    10/7/2016                     4,071.5         4,071.5   $ 340,866  

(1)
Amounts in this column relate to the Performance Vesting Units granted under the Management Equity Plan. See "—Narrative to Summary Compensation Table and Grants of Plan-Based Awards—Management Equity Plan" for a description of those Incentive Units.

(2)
Amounts in this column relate to the Time Vesting Units granted under the Management Equity Plan. See "—Narrative to Summary Compensation Table and Grants of Plan-Based Awards—Management Equity Plan."

(3)
Grant date fair value is attributed to the Time Vesting Units awards under FASB ASC Topic 718. See Footnote 1 to the Summary Compensation Table for a description of how these values were derived.

Narrative to Summary Compensation Table and Grants of Plan-Based Awards

    Non-Equity Incentive Plan—2016 Management Bonus Plan

        Non-Equity Incentive Plan—2016 Annual Bonus Plan.     For the participating named executive officers, the target bonus amount was based on the achievement of several internal company goals, including adjusted EBITDA, business services and HSD growth, capital expenditures and customer satisfaction. Each named executive officer earned 39.6% of the target bonus. The Compensation Committee based its determination on actual Company results, qualitative and quantitative data, and overall Company performance.

    Management Equity Plan

        Equity Incentive Plan—2016 Management Equity Plan.     Our Management Equity Plan is governed by the WideOpenWest Holdings, LLC Profits Interest Plan, dated February 3, 2016, and the terms and conditions of the relevant grant agreements executed in connection with Incentive Unit Grants from time to time. The maximum number of Incentive Units (including issued and outstanding Incentive Units) available for issuance under the Management Equity Plan is 295,667 units, or approximately 8% of the total outstanding units of Parent excluding Incentive Units, which may be either authorized and unissued units or units held in or acquired for our treasury. In general, if Incentive Units under the Management Equity Plan for any reason are cancelled, forfeited, expired or terminated, such Incentive Units will be available for the further grant of awards under the Management Equity Plan.

        Incentive Units granted under the Management Equity Plan are intended to constitute a "profits interest" in the Parent for tax purposes and represent a Class D unit in the Parent. Generally, our named executive officers are granted these Incentive Units at no purchase price, and then those

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Incentive Units are subject to a combination of time and performance-based vesting conditions from time to time. Such Class D units represent a right to a fractional portion of the profits and distributions of Parent in excess of a "participation threshold" determined in accordance with the Amended Operating Agreement. The Class D units are in a secondary position to the other outstanding classes of units in the Parent, in that in any event in which the equity is valued and paid out, holders of the Class D units are only paid if an amount at least equal to the applicable participation threshold is first allocated to all of the outstanding classes of units under the Amended Operating Agreement.

        The Board or any specified committee thereof (the "Administrator") has full authority to administer and interpret the Management Equity Plan, including the power to determine the form, amount and other terms and conditions of awards. Awards granted under the Management Equity Plan will be evidenced by award agreements (which need not be identical) that provide additional terms, conditions, restrictions and/or limitations covering the grant of the award. The Administrator, in its sole discretion, may provide in an award agreement that such award is subject to cancellation, in whole or in part, due to violation of covenants relating to non-competition, non-solicitation, non-disclosure and certain other activities that conflict with, or are adverse to, our interests. Notwithstanding any other provision of the Management Equity Plan, the Board of Directors may at any time amend any or all of the provisions of the Management Equity Plan, or suspend or terminate it entirely, subject to certain limitations. Awards granted under the Management Equity Plan are generally non-transferable (other than by will or the laws of descent and distribution) except that the Administrator may provide for the transferability of awards to certain family members and related trusts, partnerships and limited liability companies.


OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END

        The following table provides information on the holdings of equity awards by our named executive officers as of December 31, 2016.

 
   
  Equity Awards(1)  
Name
  Grant Date   Number of
Shares or Units
of Stock
That Have
Not Vested
(#)
  Market
Value of
Shares or
Units
of Stock
That Have
Not Vested
($)(2)
  Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or
Other Rights
That Have
Not Vested
(#)
  Equity Incentive
Plan Awards:
Market or
Payout
Value of
Unearned Shares,
Units or
Other Rights
That Have
Not Vested
($)(2)
 

Steven Cochran

    5/31/2016     10,915.1 (3)       14,553.5 (4)    

Craig Martin

    5/31/2016     4,366.1 (3)       5,821.5 (4)    

Richard E. Fish, Jr. 

    5/31/2016     7,313.3 (3)       9,751.0 (4)    

Cathy Kuo

    5/31/2016     3,667.5 (6)       5,821.5 (4)    

Cash Hagen

    5/31/2016     6,549.0 (3)       8,732.0 (4)    

Scott Russell

    5/31/2016     1,312.5 (3)       1,750.0 (4)    

Scott Russell

    10/7/2016     4,071.5 (5)       4,071.5 (4)    

(1)
Represents Incentive Units granted to our named executive officers under the Management Equity Plan.

(2)
The Incentive Units represent a profits interest in the Parent. No value is realized as a result of vesting of those units. See "—Narrative to Summary Compensation Table and Grants of Plan-Based Awards—Management Equity Plan" for a description of the Incentive Units.

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(3)
Vest pro rata over four years on December 18 of each such year.

(4)
Vest only upon a liquidity event (as defined in the relevant Incentive Unit grant agreement) only to the extent the applicable participation threshold is first allocated to all of the outstanding classes of units under the Amended Operating Agreement, provided that the holder of the Incentive Units is still employed as of the date of such liquidity event.

(5)
Vest pro rata over four years on June 30 of each such year.

(6)
In connection with Ms. Kuo's title change, vesting is 37% year one, 58% year two, 79% year three and 100% year four.


OPTION EXERCISES AND EQUITY UNITS VESTED IN 2016

        The Company does not issue stock options to any of its employees. The following table provides information on Management Incentive Units held by our named executive officers that vested in 2016.

 
  Incentive Units  
Name
  Number of
Incentive Units
Acquired on
Vesting (#)
  Value Realized
on Vesting
($)(1)
 

Steven Cochran

    3,638.4      

Cathy Kuo

    2,154.0      

Cash Hagen

    2,183.0      

Craig Martin

    1,455.4      

Richard E. Fish, Jr. 

    2,437.8      

Scott Russell

    437.5      

(1)
The Incentive Units represent a profits interest in the Parent. No value is realized as a result of vesting of those units. See "—Narrative to Summary Compensation Table and Grants of Plan-Based Awards—Management Equity Plan" for a description of the Incentive Units.

Pension Benefits in 2016

        We do not offer our executives or others a pension plan. Retirement benefits are limited to participation in our 401(k) plan with an employer discretionary match for employee deferrals of up to 4% of base salary, subject to applicable Code contribution limitations under the Code.

Non-qualified Deferred Compensation in 2016

        The following table shows certain information concerning non-qualified deferred compensation activity in 2016 for our named executive officers.


NON-QUALIFIED DEFERRED COMPENSATION IN 2016

Name
  Executive
Contributions
in 2016
($)
  Company
Contributions
in 2016
($)
  Aggregate
Earnings
in 2016
($)(1)
  Aggregate
Withdrawals/
Distributions
($)(2)
  Aggregate
Balance at
12/31/2016
($)
 

Steven Cochran

          $ 4,296   $ 138,600   $ 227,905  

Craig Martin

          $ 147       $ 38,971  

(1)
Amounts in this column are included in the "All Other Compensation" column in the Summary Compensation Table.

(2)
Amounts in this column are not included in the Summary Compensation Table.

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

        The following section describes potential payments and benefits to the named executive officers under the Company's compensation and benefit plans and arrangements upon termination of employment or a change of control of the Company.

        As described above, each of our named executive officers has an employment agreement with the Company. In addition, the Company may authorize discretionary severance payments to its named executive officers upon termination.

Description of Severance or Change in Control Provisions in Employment Agreements

        Mr. Cochran's Employment Agreement.     In connection with Mr. Cochran's appointment as Chief Executive Officer and member of the Board effective April 1, 2014, on February 3, 2014, the Company entered into an employment agreement (the "Employment Agreement") with Mr. Cochran. The term of the Employment Agreement is for five years unless earlier terminated pursuant to its terms, and the Employment Agreement supersedes Mr. Cochran's prior employment agreement in all respects.

        Under the Employment Agreement, Mr. Cochran receives an annual base salary, subject to annual increases as determined by Parent's Compensation Committee, and an annual bonus award with a target bonus of 100% of his annual base salary (based upon achievement of objective performance goals established by the compensation committee, which may include Mr. Cochran and the Company's performance relative to budgeted adjusted EBITDA, numbers of subscribers, capital expenditures, and customer satisfaction and other goals established by the compensation committee). The Compensation Committee will establish additional performance thresholds above and below the target ranging from 50% to a percentage in excess of 100% of Mr. Cochran's annual base salary as permitted by the then existing management bonus plan. Mr. Cochran may participate in the Company's employee benefit plans as are generally made available to the Company's senior executives, including insurance programs and other fringe employee benefits.

        Upon termination of Mr. Cochran's employment without cause or by Mr. Cochran for good reason, Mr. Cochran will receive severance in the form of (i) continued annual salary payments through the second anniversary of the date of his termination of employment (subject to his execution of a release in favor of Parent and its subsidiaries and continued compliance with the restrictive covenants set forth in the Employment Agreement), and (ii) the right, but not the obligation, to sell a number of vested Units equal to the lesser of (x) vested Units representing 20% of the outstanding vested Incentive Units held by Mr. Cochran (valued at fair market value as of Mr. Cochran's termination date, as determined in good faith by the Board consistent with the most recent valuation of Parent determined by Avista) or (y) vested Incentive Units with a fair market value of $2,000,000 (valued at fair market value as of Mr. Cochran's termination date, as determined in good faith by the Board, consistent with Avista's most recent valuation of Parent). Mr. Cochran will not be entitled to severance payments or sale rights upon termination for any other reason.

        Other Named Executive Officers' Employment Agreements.     The Company entered into letter agreements relating to employment with each of Messrs. Martin, Fish, Hagen and Russell and Ms. Kuo. Each such letter agreement was executed using the same form of agreement. None of those letter agreements specify a minimum term. The letter agreements provide for an annual base salary (subject to annual review for increase only) and an annual bonus award (based upon formulas to be established in its sole discretion, such as annual budgeted adjusted EBITDA, achievement of budgeted customer retention, and acquisition of customer satisfaction ratings). Each of those agreements also permits the named executive officers to participate in the Company's employee benefit plans as are generally made available to our senior executives, including insurance programs and other fringe employee benefits.

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        Upon termination of the employment of Messrs. Martin, Fish, Hagen or Russell or Ms. Kuo by the Company without cause or by the employee for good reason, such employee shall receive severance equal to 1 year's salary to be paid in 12 equal monthly installments (subject to the employee's execution of a release in favor of the Company and continued compliance with the restrictive covenants set forth in the letter agreement). The letter agreements do not provide for severance payments upon any other termination.

Change of Control/Severance Payment Table as of December 31, 2016

        The following table estimates the potential payments and benefits to the named executive officers upon termination of employment or a change of control, assuming such event occurs on December 31, 2016. These estimates do not reflect the actual amounts that would be paid to such persons, which would only be known at the time that they become eligible for payment and would only be payable if the specified event occurs.

        Items Not Reflected in Table.     The following items are not reflected in the table set forth below:

    Accrued salary, bonus (except to the extent specifically noted in an employment agreement) and vacation.

    Costs of COBRA or any other mandated governmental assistance program to former employees.

    Welfare benefits provided to all salaried employees having substantially the same value.

    Amounts outstanding under the 401(k) plan.

    Although the Incentive Units become fully vested upon a change in control, they are not included in the table below. This is because the Incentive Units represent a profits interest in the Parent. As such, no value is received as a result of the vesting of those units, unless the change of control qualifies as a liquidity event under the applicable grant agreement and the applicable participation threshold is first allocated to all of the outstanding classes of units under the Amended Operating Agreement. See "—Narrative to Summary Compensation Table and Grants of Plan-Based Awards—Management Equity Plan" for a description of the Incentive Units.


CHANGE IN CONTROL AND SEVERANCE PAYMENTS AS OF DECEMBER 31, 2016

 
  Cash
Severance
($)
  Total
($)
 

Steven Cochran(1)

  $ 1,275,000   $ 1,275,000  

Termination without cause or for good reason

             

Cathy Kuo(2)

  $ 290,000   $ 290,000  

Termination without cause or for good reason

             

Craig Martin(2)

  $ 364,393   $ 364,393  

Termination without cause or for good reason

             

Richard E. Fish, Jr.(2). 

  $ 329,333   $ 329,333  

Termination without cause of for good reason

             

Cash Hagen(2)

  $ 329,333   $ 329,333  

Termination without cause or for good reason

             

Scott Russell(2)

  $ 315,000   $ 315,000  

Termination without cause or for good reason

             

(1)
Calculated as 2 times Mr. Cochran's salary in effect as of December 31, 2016.

(2)
Calculated as 1 times the named executive officer's base salary in effect as of December 31, 2016.

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Director Compensation

        Board members from Avista and Crestview do not receive any direct compensation for their service as directors. We pay Avista a management fee of $1,500,000 annually pursuant to the Amended and Restated Financial Advisory Agreement, dated as of July 17, 2012, to provide certain advisory and consulting services, including, without limitation, general advisory services in relation to Parent and its subsidiaries (including WOW!), management and business; identification, analysis, support and negotiation of acquisitions and dispositions; analysis, support and negotiation of financing alternatives, including, without limitation, in connection with acquisitions, capital expenditures and refinancing of existing indebtedness; finance functions, including assistance in the preparation of financial projections; and strategic planning functions, including evaluating major strategic alternatives. In addition, pursuant to a consulting agreement dated as of December 18, 2015 by and among Parent, Avista and Crestview, Crestview is entitled to 50% of any management fee or transaction fee actually received by Avista, and we are responsible for the reasonable expenses of each of Avista and Crestview incurred in providing services under such agreements. See "Certain Relationships and Related Party Transactions—Services Agreement" and "—Consulting Agreement."

        Effective October 20, 2012, we appointed Mr. Seskin as a director of the Company. He currently receives an annual fee of $50,000.

        Mr. Seskin received 383 Incentive Units for his service as a director of the Company in 2016.

        We do not compensate our board members with per meeting fees. Our directors are reimbursed for any expenses incurred in connection with their service.

        Following the completion of this offering, we intend to approve and implement a compensation program for all of our non-employee directors that consists of annual retainer fees and long-term equity awards.

Compensation Committee Interlocks and Insider Participation

        During 2016, the members of our Compensation Committee were Messrs. Burgstahler and Marcus. Mr. Burgstahler is a Co-Managing Partner and President of Avista while Mr. Marcus is a Partner at Crestview. Avista provides us with advisory services pursuant to a Financial Advisory Agreement and certain amounts owing to Avista are paid to Crestview.

2017 Omnibus Incentive Plan

        In connection with this offering, we intend to adopt a new equity incentive plan in 2017, our 2017 Omnibus Incentive Plan (the "2017 Plan"), and we expect that all awards following the offering will be made under the 2017 Plan.

        The 2017 Plan will provide for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards. Directors, officers and other employees of us and our subsidiaries, as well as others performing consulting or advisory services for us, will be eligible for grants under the 2017 Plan. The purpose of the 2017 Plan will be to provide incentives that will attract, retain and motivate high performing officers, directors, employees and consultants by providing them with appropriate incentives and rewards either through a proprietary interest in our long-term success or compensation based on their performance in fulfilling their personal responsibilities. Set forth below is a summary of the material terms we expect the 2017 Plan to include.

        Administration.     The 2017 Plan will be administered by the Compensation Committee of our Board of Directors. The Compensation Committee will have the power to determine the form, amount and other terms and conditions of awards; clarify, construe or resolve any ambiguity in any provision of

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the 2017 Plan or any award agreement; amend the terms of outstanding awards; and adopt such rules, forms, instruments and guidelines for administering the 2017 Plan as it deems necessary or proper.

        The Compensation Committee will have authority to administer and interpret the 2017 Plan, to grant discretionary awards under the 2017 Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of common stock to be covered by each award, to make all other determinations in connection with the 2017 Plan and the awards thereunder as the Compensation Committee deems necessary or desirable and to delegate authority under the 2017 Plan to our executive officers.

        Available Shares.     The aggregate number of shares of common stock which may be issued or used for reference purposes under the 2017 Plan or with respect to which awards may be granted may not exceed 6,474,128 shares, of which 6,351,891 will remain available for issuance or use after giving effect to grants of restricted stock to be made in connection with this offering. The number of shares available for issuance under the 2017 Plan may be subject to adjustment in the event of a reorganization, stock split, merger or similar change in the corporate structure or the outstanding shares of common stock. In the event of any of these occurrences, we may make any adjustments we consider appropriate to, among other things, the number and kind of shares, options or other property available for issuance under the plan or covered by grants previously made under the plan. The shares available for issuance under the plan may be, in whole or in part, either authorized and unissued shares of our common stock or shares of common stock held in or acquired for our treasury. In general, if awards under the 2017 Plan are for any reason cancelled, or expire or terminate unexercised, the shares covered by such awards may again be available for the grant of awards under the 2017 Plan.

        The maximum number of shares of our common stock with respect to which any stock option, stock appreciation right, shares of restricted stock or other stock-based awards that are subject to the attainment of specified performance goals and intended to satisfy Section 162(m) of the Code and may be granted under the 2017 Plan during any fiscal year to any eligible individual will be shares (per type of award). The total number of shares of our common stock with respect to all awards that may be granted under the 2017 Plan during any fiscal year to any eligible individual will be 5,000,000 shares. There are no annual limits on the number of shares of our common stock with respect to an award of restricted stock that are not subject to the attainment of specified performance goals to eligible individuals. The maximum number of shares of our common stock subject to any performance award which may be granted under the 2017 Plan during any fiscal year to any eligible individual will be 1,000,000 shares. The maximum value of a cash payment made under a performance award which may be granted under the 2017 Plan during any fiscal year to any eligible individual will be $10,000,000. The aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all types of awards granted under the Plan to any individual non-employee director in any fiscal year (excluding awards made pursuant to deferred compensation arrangements in lieu of all or a portion of cash retainers and any stock dividends payable in respect of outstanding awards) may not exceed $1,000,000.

        Eligibility for Participation.     Members of our Board of Directors, as well as employees of, and consultants to, us or any of our subsidiaries and affiliates will be eligible to receive awards under the 2017 Plan.

        Award Agreement.     Awards granted under the 2017 Plan will be evidenced by award agreements, which need not be identical, that will provide additional terms, conditions, restrictions and/ or limitations covering the grant of the award, including, without limitation, additional terms providing for the acceleration of exercisability or vesting of awards in the event of a change of control or conditions regarding the participant's employment, as determined by the Compensation Committee.

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        Stock Options.     The Compensation Committee may grant non-qualified stock options to eligible individuals and incentive stock options only to eligible employees. The Compensation Committee will determine the number of shares of our common stock subject to each option, the term of each option, which may not exceed ten years, or five years in the case of an incentive stock option granted to a ten percent stockholder, the exercise price, the vesting schedule, if any, and the other material terms of each option. No incentive stock option or non-qualified stock option may have an exercise price less than the fair market value of a share of our common stock at the time of grant or, in the case of an incentive stock option granted to a ten percent stockholder, 110% of such share's fair market value. Options will be exercisable at such time or times and subject to such terms and conditions as determined by the Compensation Committee at grant and the exercisability of such options may be accelerated by the Compensation Committee.

        Stock Appreciation Rights.     The Compensation Committee may grant stock appreciation rights, which we refer to as SARs, either with a stock option, which may be exercised only at such times and to the extent the related option is exercisable, which we refer to as a Tandem SAR, or independent of a stock option, which we refer to as a Non-Tandem SAR. A SAR is a right to receive a payment in shares of our common stock or cash, as determined by the Compensation Committee, equal in value to the excess of the fair market value of one share of our common stock on the date of exercise over the exercise price per share established in connection with the grant of the SAR. The term of each SAR may not exceed ten years. The exercise price per share covered by a SAR will be the exercise price per share of the related option in the case of a Tandem SAR and will be the fair market value of our common stock on the date of grant in the case of a Non-Tandem SAR. The Compensation Committee may also grant limited SARs, either as Tandem SARs or Non-Tandem SARs, which may become exercisable only upon the occurrence of a change in control, as defined in the 2017 Plan, or such other event as the Compensation Committee may designate at the time of grant or thereafter.

        Restricted Stock.     The Compensation Committee may award shares of restricted stock. Except as otherwise provided by the Compensation Committee upon the award of restricted stock, the recipient generally has the rights of a stockholder with respect to the shares, including the right to receive dividends, the right to vote the shares of restricted stock and, conditioned upon full vesting of shares of restricted stock, the right to tender such shares, subject to the conditions and restrictions generally applicable to restricted stock or specifically set forth in the recipient's restricted stock agreement. The Compensation Committee may determine at the time of award that the payment of dividends, if any, will be deferred until the expiration of the applicable restriction period.

        Recipients of restricted stock are required to enter into a restricted stock agreement with us that states the restrictions to which the shares are subject, which may include satisfaction of pre-established performance goals, and the criteria or date or dates on which such restrictions will lapse.

        If the grant of restricted stock or the lapse of the relevant restrictions is based on the attainment of performance goals, the Compensation Committee will establish for each recipient the applicable performance goals, formulae or standards and the applicable vesting percentages with reference to the attainment of such goals or satisfaction of such formulae or standards while the outcome of the performance goals is substantially uncertain. Such performance goals may incorporate provisions for disregarding, or adjusting for, changes in accounting methods, corporate transactions, including, without limitation, dispositions and acquisitions, and other similar events or circumstances.

        Section 162(m) of the Code requires that performance awards be based upon objective performance measures. The performance goals for performance-based restricted stock will be based on one or more of the objective criteria set forth on Exhibit A to the 2017 Plan and are discussed in general below.

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        Other Stock-Based Awards.     The Compensation Committee may, subject to limitations under applicable law, make a grant of such other stock-based awards, including, without limitation, performance units, dividend equivalent units, stock equivalent units, restricted stock and deferred stock units under the 2017 Plan that are payable in cash or denominated or payable in or valued by shares of our common stock or factors that influence the value of such shares. The Compensation Committee may determine the terms and conditions of any such other awards, which may include the achievement of certain minimum performance goals for purposes of compliance with Section 162(m) of the Code and/or a minimum vesting period. The performance goals for performance-based other stock-based awards will be based on one or more of the objective criteria set forth on Exhibit A to the 2017 Plan and discussed in general below.

        Other Cash-Based Awards.     The Compensation Committee may grant awards payable in cash. Cash-based awards will be in such form, and dependent on such conditions, as the Compensation Committee will determine, including, without limitation, being subject to the satisfaction of vesting conditions or awarded purely as a bonus and not subject to restrictions or conditions. If a cash-based award is subject to vesting conditions, the Compensation Committee may accelerate the vesting of such award in its discretion.

        Performance Awards.     The Compensation Committee may grant a performance award to a participant payable upon the attainment of specific performance goals. The Compensation Committee may grant performance awards that are intended to qualify as performance-based compensation under Section 162(m) of the Code as well as performance awards that are not intended to qualify as performance-based compensation under Section 162(m) of the Code. If the performance award is payable in cash, it may be paid upon the attainment of the relevant performance goals either in cash or in shares of restricted stock, based on the then current fair market value of such shares, as determined by the Compensation Committee. Based on service, performance and/or other factors or criteria, the Compensation Committee may, at or after grant, accelerate the vesting of all or any part of any performance award.

        Performance Goals.     The Compensation Committee may grant awards of restricted stock, performance awards and other stock-based awards that are intended to qualify as performance-based compensation for purposes of Section 162(m) of the Code. These awards may be granted, vest and be paid based on attainment of specified performance goals established by the committee. These performance goals may be based on the attainment of a certain target level of, or a specified increase or decrease in, one or more of the following measures selected by the committee: (1) earnings per share; (2) operating income; (3) gross income; (4) net income, before or after taxes; (5) cash flow; (6) incremental contribution; (7) incremental contribution return on investment; (8) incremental contribution margin return on investment; (9) incremental contribution margin; (10) operating margin; (11) working capital; (12) earnings before interest and taxes; (13) earnings before interest, tax, depreciation and amortization; (14) return on equity; (15) return on assets; (16) return on capital; (17) return on invested capital; (18) net revenues; (19) gross revenues; (20) revenue growth; (21) annual recurring revenues; (22) recurring revenues; (23) license revenues; (24) sales or market share; (25) total stockholder return; (26) economic value added; (27) specified objectives with regard to limiting the level of increase in all or a portion of our bank debt or other long-term or short-term public or private debt or other similar financial obligations, which may be calculated net of cash balances and other offsets and adjustments as may be established by the Compensation Committee; (28) the fair market value of a share of our common stock; (29) the growth in the value of an investment in our common stock assuming the reinvestment of dividends; or (30) reduction in operating expenses.

        To the extent permitted by law, the Compensation Committee may also exclude the impact of an event or occurrence which the Compensation Committee determines should be appropriately excluded,

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such as (1) restructurings, discontinued operations, extraordinary items and other unusual or non-recurring charges; (2) an event either not directly related to our operations or not within the reasonable control of management; or (3) a change in accounting standards required by generally accepted accounting principles.

        Performance goals may also be based on an individual participant's performance goals, as determined by the Compensation Committee.

        In addition, all performance goals may be based upon the attainment of specified levels of our performance, or the performance of a subsidiary, division or other operational unit, under one or more of the measures described above relative to the performance of other corporations. The Compensation Committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend those criteria.

        Change in Control.     In connection with a change in control, as defined in the 2017 Plan, the Compensation Committee may accelerate vesting of outstanding awards under the 2017 Plan. In addition, such awards may be, in the discretion of the committee, (1) assumed and continued or substituted in accordance with applicable law, (2) purchased by us for an amount equal to the excess of the price of a share of our common stock paid in a change in control over the exercise price of the awards, or (3) cancelled if the price of a share of our common stock paid in a change in control is less than the exercise price of the award. The Compensation Committee may also provide for accelerated vesting or lapse of restrictions of an award at any time.

        Stockholder Rights.     Except as otherwise provided in the applicable award agreement, and with respect to an award of restricted stock, a participant has no rights as a stockholder with respect to shares of our common stock covered by any award until the participant becomes the record holder of such shares.

        Amendment and Termination.     Notwithstanding any other provision of the 2017 Plan, our Board of Directors may at any time amend any or all of the provisions of the 2017 Plan, or suspend or terminate it entirely, retroactively or otherwise, subject to stockholder approval in certain instances; provided, however, that, unless otherwise required by law or specifically provided in the 2017 Plan, the rights of a participant with respect to awards granted prior to such amendment, suspension or termination may not be adversely affected without the consent of such participant.

        Transferability.     Awards granted under the 2017 Plan generally are nontransferable, other than by will or the laws of descent and distribution, except that the committee may provide for the transferability of non-qualified stock options at the time of grant or thereafter to certain family members.

        Recoupment of Awards.     The 2017 Plan will provide that awards granted under the 2017 Plan are subject to any recoupment policy that we may have in place or any obligation that we may have regarding the clawback of "incentive-based compensation" under the Securities Exchange Act of 1934 or under any applicable rules and regulations promulgated by the Securities and Exchange Commission.

        Effective Date; Term.     Prior to the closing of this offering, we expect the Board of Directors and our stockholders to adopt the 2017 Plan. No award will be granted under the 2017 Plan on or after the tenth anniversary of its adoption. Any award outstanding under the 2017 Plan at the time of termination will remain in effect until such award is exercised or has expired in accordance with its terms.

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Effect of the Distribution and this Offering

        Prior to the closing of this offering, we will effect a 67,274.092-for-1 stock split and Parent will distribute the shares of our common stock that it holds (indirectly through Racecar Acquisition LLC) to its equity holders based on their relative rights under its limited liability company agreement, with no issuance of additional shares by us. Each holder of units of WideOpenWest Holdings, LLC will receive shares of our common stock in the distribution, subject to the terms of any applicable grant or other agreement. Subject to certain adjustments that we will make, members of our management that hold vested units of Parent will receive vested common stock and members of management that hold unvested units will receive restricted common stock, subject only to time vesting.

        Upon the consummation of the offering, pursuant to our 2017 Plan, we expect to grant to members of our management approximately 122,237 shares of restricted stock, including 32,402 restricted stock units to be granted to our Named Executive Officers (based on the midpoint of the price range set forth on the cover of this prospectus). This restricted stock will vest, if at all, ratably over three years following issuance, subject to continued employment through the vesting date.

        In addition, we plan to issue additional shares of restricted common stock under our 2017 Omnibus Incentive Plan to our Named Executive Officers and other members of management following the completion of this offering (the "Post-IPO Awards"). A portion of this restricted stock will vest, if at all, one year from issuance and a portion will vest, if at all, ratably over three years following issuance, subject to continued employment through the applicable vesting date. The Post-IPO Awards are anticipated to represent between 1.0% and 2.0% of our total common stock outstanding and will be issued, if at all, only at the discretion of our board of directors.

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PRINCIPAL AND SELLING STOCKHOLDERS

        The following table shows information about the beneficial ownership of our common stock, as of May 15, 2017 by:

        For further information regarding material transactions between us and certain of our stockholders, see "Certain Relationships and Related Party Transactions."

        The numbers listed below are based on 86,321,711 shares of our common stock outstanding as of May 15, 2017 and gives effect to the Stock Split and the Distribution.

        Upon the completion of this offering, the Sponsors will own approximately 73% of our common stock, assuming that the underwriters do not exercise their option to buy additional shares, and 69% of our common stock, assuming that the underwriters exercise their option in full to buy additional shares. As a result, we expect to be a "controlled company" within the meaning of the corporate governance rules of the New York Stock Exchange.

 
  Common stock owned
before the offering
  Common stock owned
after the offering
(no option exercise)
   
  Common stock owned
after the offering
(option exercise)
 
 
  Common stock to be
sold in this offering
(assuming full
option exercise)
 
Name and Address of Beneficial Owner(1)
  Number   Percentage   Number   Percentage   Number   Percentage  

Selling Stockholders:

                                           

Affiliates of Avista(2)

    37,870,054     56.3 %   37,870,054     43.9 %   2,857,142     35,012,912     40.6 %

Other Principal Stockholders:

                                           

Crestview Funds(3)

    24,817,679     36.9 %   24,817,679     28.8 %         24,817,679     28.8 %

Executive Officers and Directors:

                                           

Steven Cochran

    547,262     *     547,262     *           547,262     *  

Richard E. Fish, Jr. 

    117,675     *     117,675     *           117,675     *  

Cash Hagen

    199,311     *     199,311     *           199,311     *  

Cathy Kuo

    230,522     *     230,522     *           230,522     *  

Craig Martin

    215,433     *     215,433     *           215,433     *  

Scott Russell

    97,210     *     97,210     *           97,210     *  

David Burgstahler(4)

                               

Brian Cassidy(5)

                               

Daniel Kilpatrick(5)

                               

Jeffrey Marcus(5)

                               

Phil Seskin(6)

    4,807     *     4,807     *           4,807     *  

Joshua Tamaroff(7)

                               

Executive Officers and Directors as a Group (12 persons)

    1,412,220     2.1 %   1,412,220     1.6 %         1,412,220     1.6 %

*
Less than 1%

(1)
A "beneficial owner" of a security is determined in accordance with Rule 13d-3 under the Exchange Act and generally means any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares:

voting power which includes the power to vote, or to direct the voting of, such security; and/or

investment power which includes the power to dispose, or to direct the disposition of, such security.


Unless otherwise indicated, each person named in the table above has sole voting and investment power, or shares voting and investment power with his or her spouse (as applicable), with respect to all shares of stock listed as owned by that person. Shares issuable upon the exercise of options exercisable on May 15, 2017 or within 60 days thereafter are considered outstanding and to be beneficially owned by the person holding such options for the purpose of computing such person's percentage beneficial ownership, but are not deemed outstanding for the purposes of computing the percentage of beneficial ownership of any other person. The address of our executive officers is c/o 7887 East Belleview Avenue, Suite 1000, Englewood, Colorado 80111.

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(2)
Includes 8,571,180 shares held by Avista Capital Partners, L.P. and 2,260,143 shares held by Avista Capital Partners (Offshore), L.P. (collectively, the "Avista I Funds"), 5,189,636 shares held by Avista Capital Partners III, L.P., 1,531,596 shares held by Avista Capital Partners (Offshore) III, L.P. and 1,362,097 shares held by Avista Capital Partners (Offshore) III-A, L.P. (collectively, the "Avista III Funds" and, together with the Avista I Funds, the "Avista Funds"), and 18,059,208 shares held by ACP Racecar Co-Invest, LLC ("ACP Co-Invest I") and 896,194 shares held by ACP Racecar Co-Invest II, LLC (together with ACP Co-Invest I and the Avista Funds, the "Avista Entities"). Avista Capital Partners GP, LLC exercises voting and dispositive power over the shares held by the Avista I Funds. Avista Capital Partners III GP, L.P. exercises voting and dispositive power over the shares held by the Avista III Funds. Avista Capital Managing Member, LLC exercises voting and dispositive power over Avista Capital Partners GP, LLC and Avista Capital Partners III GP, L.P. Voting and disposition decisions at Avista Capital Managing Member, LLC are made by an investment committee, the members of which are Thompson Dean, Steven Webster, David Burgstahler, David Durkin and Sriram Venkataraman.

The address of each entity referenced in this footnote is c/o Avista Capital Partners, 65 E. 55th Street, 18th Floor, New York, New York 10022.

(3)
Includes 4,136,280 shares held by Crestview W1 Co Investors, LLC, 972,372 shares held by Crestview W1 TE Holdings, LLC, and 19,709,027 shares held by Crestview W1 Holdings, L.P. Crestview Partners III GP, L.P. exercises voting and dispositive power over the shares held by Crestview. Voting and disposition decisions of Crestview Partners III GP, L.P. are made by an investment committee, the members of which are Barry Volpert, Robert Delaney, Jr., Thomas Murphy, Jr., Brian Cassidy, Jeffrey Marcus, Quentin Chu, Robert Hurst, Alexander Rose, Richard DeMartini and Adam Klein. None of the foregoing persons has the power individually to vote or dispose of any shares. Each of the foregoing individuals disclaims beneficial ownership of all such shares, except to the extent of his pecuniary interest. The address of each of the foregoing is c/o Crestview Partners, 667 Madison Avenue, 10th Floor, New York, New York 10065.

(4)
Excludes shares held by the Avista Entities. Mr. Burgstahler is the President of the general partner of Avista Capital Partners GP, LLC and as a result may be deemed to beneficially own the shares owned by the Avista Entities. Mr. Burgstahler disclaims beneficial ownership of the shares held by the Avista Entities, except to the extent of his pecuniary interest therein. Mr. Burgstahler's address is c/o Avista Capital Partners, 65 E. 55th Street, 18th Floor, New York, New York 10022.

(5)
Excludes shares held by Crestview. The address of Mr. Cassidy, Mr. Kilpatrick and Mr. Marcus is c/o Crestview Partners, 667 Madison Avenue, 10th Floor, New York, New York 10065.

(6)
The address of Mr. Seskin is c/o 7887 East Belleview Avenue, Suite 1000, Englewood, Colorado 80111.

(7)
Excludes shares held by the Avista Entities. The address of Mr. Tamaroff is c/o Avista Capital Partners, 65 E. 55th Street, 18th Floor, New York, New York 10022.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Services Agreement

        Avista entered into a financial advisory agreement (the "Financial Advisory Agreement") pursuant to which Parent retained Avista to provide certain advisory and consulting services, including, without limitation, general advisory services in relation to Parent and its subsidiaries (including WOW!), management and business; identification, analysis, support and negotiation of acquisitions and dispositions; analysis, support and negotiation of financing alternatives, including, without limitation, in connection with acquisitions, capital expenditures and refinancing of existing indebtedness; finance functions, including assistance in the preparation of financial projections; and strategic planning functions, including evaluating major strategic alternatives. In addition, the Financial Advisory Agreement provides that Parent shall pay Avista a quarterly management fee (the "Management Fee") equal to $375,000 (of which 50% will be paid to Crestview pursuant to the Consulting Agreement (as defined below)), plus reasonable out of pocket expenses incurred in connection with services provided under the Financial Advisory Agreement. Historically, our subsidiary WOW! Finance has provided the funding required to pay the Management Fee. See also "—Consulting Agreement." Further, upon any transaction entered into by Parent or its affiliates in which Avista has provided advice and assistance to Parent under the Financial Advisory Agreement (other than a transaction constituting a Change of Control (as defined in Parent's credit agreement)), the Financial Advisory Agreement provides that Parent shall pay Avista reasonable and customary advisory fees for the advice and services provided by Avista (in addition to the Management Fee) (the "Transaction Fee"). The Financial Advisory Agreement terminates upon the earlier of July 17, 2022, the date upon which Parent pays to Avista all amounts that would otherwise be payable pursuant to the Financial Advisory Agreement through July 17, 2022, or such earlier time as Avista terminates the Financial Advisory Agreement by delivering notice to the Company. The Financial Advisory Agreement will be terminated in connection with this offering.

Consulting Agreement

        On December 18, 2015, in connection with the Crestview Purchase Agreement, Avista, Crestview, and Parent entered into a consulting agreement (the "Consulting Agreement") pursuant to which Avista retained Crestview to assist Avista in providing services to Parent pursuant to the Financial Advisory Agreement and otherwise as agreed to by Crestview. In consideration therefore, the Consulting Agreement provides that Avista will pay Crestview 50% of any Management Fee or Transaction Fee actually received by Avista (including from the Financial Advisory Agreement) and Parent will reimburse Crestview for any reasonable out of pocket expenses incurred by Crestview or its affiliates in connection with providing services under the Consulting Agreement. The Consulting Agreement will be terminated in connection with this offering.

Registration Agreement

        Parent, Avista, Crestview and certain other investors and members of management entered into an amended and restated registration agreement (the "Registration Agreement") pursuant to which Avista or Crestview may require Parent to register the sale of its common units of Parent. In addition, all holders of common units have the right to exercise certain piggyback registration rights with respect to their own common units if Parent elects to register any of its own securities. The Registration Agreement also includes customary provisions dealing with holdback agreements, indemnification and contribution and allocation of expenses. We intend to terminate the Registration Agreement in connection with this offering.

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Stockholders' Agreement

        In connection with this offering, we expect to enter into a Stockholders' Agreement with the Sponsors and members of management. The Stockholders' Agreement will provide, among other things, that each Sponsor will have the right to designate:

        The initial Avista designees will be Mr. Seskin, Mr. Tamaroff and Mr. Burgstahler. The initial Crestview designees will be Mr. Marcus, Mr. Kilpatrick and Mr. Cassidy. We will be required to take all necessary action to cause the Board of Directors to ensure the composition of our Board of Directors as set forth above.

        Furthermore, we have agreed not to take, and will not permit any of our subsidiaries to take, any of the below actions without the consent of each Sponsor until the later of (x) such time as the Requisite FCC Approval is obtained and (y) the earlier of (1) June 30, 2018 or (2) such time as such Sponsor no longer owns at least 22.5% of our outstanding shares of common stock at such time (in which case such Sponsor's consent will not be required for any of the actions listed below):

        For purposes of the Stockholders' Agreement, the "Requisite FCC Approval" will mean any action by the FCC approving the proposed transfer of control of the FCC authorizations held by us to allow either or both Sponsors to relinquish the negative control of us each holds as of the date of the agreement.

        For so long as both Sponsors hold more than 5% of our common stock, a Sponsor wishing to sell shares of our common stock pursuant to Rule 144 under the Securities Act will be required to consult with the other Sponsor and afford such Sponsor the opportunity to participate in any such Rule 144 sale on a pro rata basis.

        The Stockholders' Agreement will provide certain limitations on the ability of members of management party thereto to offer, sell or otherwise dispose of shares of our common stock or compete with the Company.

        The Stockholders' Agreement will require the Company to reimburse the Sponsors for costs the Sponsors incur on behalf of the Company, services provided by the Sponsors to the Company and for any expenses the Sponsors incur relating to enforcing their rights under the Stockholders' Agreement. The Stockholders' Agreement will also include corporate opportunity, confidentiality and indemnification provisions customary for agreements of this type.

        Subject to certain exceptions, the Stockholders' Agreement will terminate with respect to each Sponsor at such time as such Sponsor owns less than 5% of our outstanding shares of common stock, and the Stockholders' Agreement will terminate entirely at such time as both Sponsors own less than 5% of our outstanding shares of common stock.

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Registration Rights Agreement

        In connection with this offering, we expect to enter into a Registration Rights Agreement with Avista and Crestview pursuant to which, among other things, we will provide to Avista and Crestview an unlimited number of "demand" registrations. The Registration Rights Agreement will also provide Avista and Crestview customary "piggyback" registration rights. We will be required to pay certain expenses relating to such registrations and to indemnify Avista and Crestview against certain liabilities which may arise in connection with the Registration Rights Agreement.

Incentive Plan / Employee Agreements

2017 Omnibus Incentive Plan

        We intend to adopt the 2017 Plan effective prior to and in connection with this offering. The 2017 Plan will provide for grants of stock options, restricted stock and performance awards. Our directors, officers and other employees and persons who engage in services for us are eligible for grants under the 2017 Plan. The purpose of the 2017 Plan is to provide these individuals with incentives to maximize stockholder value and otherwise contribute to our success and to enable us to attract, retain and reward the best available persons for positions of responsibility. 6,474,128 shares of our common stock will be authorized for issuance under the 2017 Plan, subject to adjustment in the event of a reorganization, stock split, merger or similar change in our corporate structure or the outstanding shares of common stock, of which 6,351,891 will remain available for issuance or use after giving effect to grants of restricted stock to be made in connection with this offering. Our Compensation Committee will administer the 2017 Plan. The Board of Directors also has the authority to administer the 2017 Plan and to take all actions that our Compensation Committee is otherwise authorized to take under the 2017 Plan. The terms and conditions of each award made under the 2017 Plan, including vesting requirements, will be set forth consistent with the 2017 Plan in a written agreement with the grantee.

2016 Management Bonus Plan

        For information on the 2016 Management Bonus Plan, see "Executive Compensation—Elements of Executive Compensation—2016 Management Bonus Plan Compensation."

Indemnification Agreements

        We intend to enter into indemnification agreements with each of our current directors and executive officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We also intend to enter into indemnification agreements with our future directors and executive officers.

Policies and Procedures with Respect to Related Party Transactions

        Upon the closing of this offering, we intend to adopt written policies and procedures whereby our Audit Committee will be responsible for reviewing and approving related party transactions. In addition, our Code of Ethics will require that all of our employees and directors inform the Company of any material transaction or relationship that comes to their attention that could reasonably be expected to create a conflict of interest. Further, at least annually, each director and executive officer will complete a detailed questionnaire that asks questions about any business relationship that may give rise to a conflict of interest and all transactions in which we are involved and in which the executive officer, a director or a related person has a direct or indirect material interest.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

         The following is a summary of certain provisions of the instruments evidencing our material indebtedness. This summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the agreements, including the definitions of certain terms therein that are not otherwise defined in this prospectus.

Senior Secured Credit Facilities

        We have a credit facility with Credit Suisse AG, as administrative agent (the "Senior Secured Credit Facility") consisting of (i) a $200.0 million senior secured revolving facility (the "Revolving Facility") with the latest possible maturity date of August 19, 2023 and (ii) $2,065.0 million Term B loans (the "Term B Loans") with the latest possible maturity date of August 19, 2023. The Term B Loan requires quarterly principal payments totaling approximately $5.1 million.

Prepayments

        We are required to repay the Senior Secured Credit Facilities with the proceeds of certain asset sales and condemnation events (subject to reinvestment rights) and issuances of indebtedness. A percentage (based upon the senior secured leverage ratio as of the most recent fiscal quarter) of our excess cash flow must also be applied to repay the Senior Secured Credit Facilities.

Security Guarantees

        Our obligations under the Senior Secured Credit Facilities are guaranteed by Racecar Acquisition, LLC and all of its wholly-owned domestic subsidiaries and each of its existing and subsequently acquired wholly-owned domestic subsidiaries (other than WOW!), subject to certain exceptions set forth therein. The Senior Secured Credit Facilities is secured on a first priority basis by substantially all of our and each guarantor's tangible and intangible assets (subject to certain exceptions), including U.S. registered intellectual property, inventory, equipment, investment property, intercompany notes, fee-owned real property in excess of certain amounts and the equity interest of each restricted subsidiary (limited, in the case of foreign subsidiaries, to 65% of the voting equity interests of first-tier foreign restricted subsidiaries).

Interest

        The Revolving Facility, Term B-1 Loans and Term B Loans bear interest, at our option, as follows:

Debt Obligation
  Interest Rate

Revolving Facility

  LIBOR plus 3.50% or ABR plus 2.50%.

Term B Loans

 

LIBOR plus 3.50% or ABR plus 2.50%.

Fees

        We pay certain recurring fees with respect to the Senior Secured Credit Facilities including (i) fees on the unused commitments of the lenders under the Revolving Facility, (ii) letter of credit fees on the aggregate face amounts of outstanding letters of credit plus a fronting fee to the issuing bank and (iii) administration fees.

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Covenants

        The Senior Secured Credit Facilities contains a number of customary affirmative and negative covenants that, among other things, limit or restrict the ability of WOW! and its restricted subsidiaries to:

        In addition, WOW! is required to comply with a senior secured leverage ratio test as of the last day of each fiscal quarter.

Events of Default

        The Senior Secured Credit Facilities contain customary events of default, including nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty when made; violation of a covenant; cross-default to material indebtedness; bankruptcy events; certain ERISA events; material judgments; actual or asserted invalidity of any guarantee or security document or subordination provisions; non-perfection of security interest; and a change of control. Failure to comply with the above-described financial ratio or the other provisions of the Senior Secured Credit Facilities (subject to certain grace periods) could, absent a waiver or an amendment from the lenders under such agreement, restrict the availability of the Revolving Facility and permit the acceleration of all outstanding borrowings under the Senior Secured Credit Facilities.

10.25% Senior Notes

        On July 17, 2012, WideOpenWest Finance, LLC, and its wholly-owned subsidiary, WideOpenWest Capital Corp. as co-issuer, issued Senior Notes due 2019 (the "Senior Notes") in an original issuance of $725.0 million. On April 1, 2014, the Company issued $100.0 million aggregate principal amount of additional 10.25% Senior Notes due 2019 issued at 113.00% plus interest deemed to have accrued from January 15, 2014. The Senior Notes were issued at par. The Senior Notes represent general obligations of the Company and WideOpenWest Capital Corp. and bear interest at 10.25%. The Senior Notes will mature on July 15, 2019. Interest on the Senior Notes are due semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2013. On or after July 15, 2015, WideOpenWest Finance, LLC may redeem some or all of either series of Senior Notes at reducing redemption prices gradually reducing to par value in 2018. Prior to such date, WideOpenWest Finance, LLC also may redeem some or all of either series of Senior Notes at a redemption price of 100% of the principal amount plus accrued and unpaid interest, if any, to the redemption date, plus a make-whole premium. In addition, WideOpenWest Finance, LLC may redeem up to 40% of the aggregate principal amount of Senior Notes before July 15, 2015 with the proceeds of certain equity offerings at a redemption price of 110.25% of the principal amount of the Existing Senior Notes, plus accrued and unpaid interest to the redemption date.

        The indenture governing the Senior Notes contains covenants that, among other things, limit WOW!'s ability, and the ability of WOW!'s restricted subsidiaries, to incur additional indebtedness, create liens, pay dividends on, redeem or repurchase WOW!'s capital stock, make investments or repay subordinated indebtedness, engage in sale-leaseback transactions, enter into transactions with affiliates, sell assets, create restrictions on dividends and other payments to WOW! from its subsidiaries, issue or sell stock of subsidiaries, and engage in mergers and consolidations. All of the covenants are subject to a number of important qualifications and exceptions under the indenture.

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DESCRIPTION OF CAPITAL STOCK

        The following summary of certain provisions of our capital stock does not purport to be complete and is subject to our amended and restated certificate of incorporation, our amended and restated bylaws and the provisions of applicable law. Copies of our amended and restated certificate of incorporation and amended and restated bylaws will be filed as exhibits to the registration statement, of which this prospectus is a part.

Authorized Capitalization

General

        Upon the closing of this offering, after giving effect to the Stock Split the total amount of our authorized capital stock will consist of 700,000,000 shares of common stock, par value $0.01 per share, and 100,000,000 shares of undesignated preferred stock. As of May 15, 2017, after giving effect to the Stock Split, but not this offering, we had outstanding 67,274,092 shares of common stock.

        After giving effect to this offering, we will have 86,321,711 shares of common stock and no shares of preferred stock outstanding assuming the underwriters' option to purchase additional shares is not exercised. The following summary describes all material provisions of our capital stock. We urge you to read our amended and restated certificate of incorporation and our amended and restated bylaws, which are included as exhibits to the registration statement of which this prospectus forms a part.

Common Stock

        As of May 15, 2017, after giving effect to the Stock Split and the Distribution, there were 284 stockholders of record of our common stock.

        Our common stock is not entitled to preemptive or other similar subscription rights to purchase any of our securities. Our common stock is neither convertible nor redeemable. Unless our Board of Directors determines otherwise, we will issue all of our capital stock in uncertificated form.

Preferred Stock

        Our Board of Directors has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of our preferred stock could have the effect of decreasing the trading price of our common stock, restricting dividends on our capital stock, diluting the voting power of our common stock, impairing the liquidation rights of our capital stock, or delaying or preventing a change in control of our company.

Voting Rights

        Each holder of our common stock is entitled to one vote per share on each matter submitted to a vote of stockholders. Our amended and restated bylaws provide that the presence, in person or by proxy, of holders of shares representing a majority of the outstanding shares of capital stock entitled to vote at a stockholders' meeting shall constitute a quorum. When a quorum is present, the affirmative vote of a majority of the votes cast is required to take action, unless otherwise specified by law or our certificate of incorporation, and except for the election of directors, which is determined by a plurality vote. There are no cumulative voting rights.

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Dividend Rights

        Each holder of shares of our capital stock will be entitled to receive such dividends and other distributions in cash, stock or property as may be declared by our Board of Directors from time to time out of our assets or funds legally available for dividends or other distributions. See the section entitled "Dividend Policy." These rights are subject to the preferential rights of any other class or series of our preferred stock.

Other Rights

        Each holder of common stock is subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock that we may designate and issue in the future. This offering is not subject to pre-emptive rights.

Liquidation Rights

        If our company is involved in a consolidation, merger, recapitalization, reorganization, or similar event, each holder of common stock will participate pro rata in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.

Anti-takeover Effects of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

        Our amended and restated certificate of incorporation and our amended and restated bylaws will contain provisions that may delay, defer or discourage another party from acquiring control of us. We expect that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with the Board of Directors, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give the Board of Directors the power to discourage acquisitions that some stockholders may favor.

Action by Written Consent, Special Meeting of Stockholders and Advance Notice Requirements for Stockholder Proposals

        Our amended and restated certificate of incorporation will provide that stockholder action can be taken only at an annual or special meeting of stockholders and cannot be taken by written consent in lieu of a meeting once the Sponsors cease to beneficially own more than 50% of our outstanding shares. Our amended and restated certificate of incorporation and bylaws will also provide that, except as otherwise required by law, special meetings of the stockholders can be called only pursuant to a resolution adopted by a majority of the total number of directors that we would have if there were no vacancies or, until the date that the Sponsors cease to beneficially own more than 50% of our outstanding shares, at the request of holders of 50% or more of our outstanding shares. Except as described above, stockholders will not be permitted to call a special meeting or to require the board of directors to call a special meeting.

        In addition, our amended and restated bylaws require advance notice procedures for stockholder proposals to be brought before an annual meeting of the stockholders, including the nomination of directors. Stockholders at an annual meeting may only consider the proposals specified in the notice of meeting or brought before the meeting by or at the direction of the Board of Directors, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered a timely written notice in proper form to our secretary, of the stockholder's intention to bring such business before the meeting.

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        These provisions could have the effect of delaying until the next stockholder meeting any stockholder actions, even if they are favored by the holders of a majority of our outstanding voting securities.

Classified Board

        Our amended and restated certificate of incorporation will provide that our Board of Directors will be divided into three classes of directors, with the classes as nearly equal in number as possible. As a result, approximately one-third of our Board of Directors will be elected each year. The classification of directors will have the effect of making it more difficult for stockholders to change the composition of our board.

Removal of Directors

        Our amended and restated certificate of incorporation will provide that directors may be removed with or without cause at any time upon the affirmative vote of holders of at least a majority of the votes to which all the stockholders would be entitled to cast until the Sponsors cease to beneficially own more than 50% of our outstanding shares. After such time, directors may only be removed from office only for cause and only upon the affirmative vote of at least 75% of the voting power of our outstanding shares of common stock.

Amendment to Certificate of Incorporation and Bylaws

        The DGCL provides generally that the affirmative vote of a majority of the outstanding stock entitled to vote on amendments to a corporation's certificate of incorporation or bylaws is required to approve such amendment, unless a corporation's certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Our amended and restated bylaws may be amended, altered, changed or repealed by a majority vote of our Board of Directors, provided that, in addition to any other vote otherwise required by law, after the date on which the Sponsors cease to beneficially own more than 50% of our outstanding shares, the affirmative vote of at least 75% of the voting power of our outstanding shares of common stock will be required to amend, alter, change or repeal our amended and restated bylaws. Additionally, after the date on which the Sponsors cease to beneficially own more than 50% of our outstanding shares, the affirmative vote of at least 75% of the voting power of the outstanding shares of capital stock entitled to vote on the adoption, alteration, amendment or repeal of our amended and restated certificate of incorporation, voting as a single class, will be required to amend or repeal or to adopt any provision inconsistent with specified provisions of our amended and restated certificate of incorporation. This requirement of a supermajority vote to approve amendments to our amended and restated certificate of incorporation and amended and restated bylaws could enable a minority of our stockholders to exercise veto power over any such amendments.

Delaware Anti-Takeover Statute

        Section 203 of the DGCL provides that if a person acquires 15% or more of the voting stock of a Delaware corporation, such person becomes an "interested stockholder" and may not engage in certain "business combinations" with the corporation for a period of three years from the time such person acquired 15% or more of the corporation's voting stock, unless: (1) the board of directors approves the acquisition of stock or the merger transaction before the time that the person becomes an interested stockholder, (2) the interested stockholder owns at least 85% of the outstanding voting stock of the corporation at the time the merger transaction commences (excluding voting stock owned by directors who are also officers and certain employee stock plans), or (3) the merger transaction is approved by the board of directors and by the affirmative vote at a meeting, not by written consent, of stockholders of 2 / 3 of the holders of the outstanding voting stock which is not owned by the interested stockholder. A

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Delaware corporation may elect in its certificate of incorporation or bylaws not to be governed by this particular Delaware law.

        Under our amended and restated certificate of incorporation, we will opt out of Section 203 of the DGCL, and will therefore not be subject to Section 203.

Corporate Opportunity

        Our amended and restated certificate of incorporation provides that we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any business opportunity that may from time to time be presented to the Sponsors or any of their officers, directors, agents, stockholders, members, partners, affiliates and subsidiaries (other than us and our subsidiaries) and that may be a business opportunity for the Sponsors, even if the opportunity is one that we might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so. No such person will be liable to us for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such person, acting in good faith, pursues or acquires any such business opportunity, directs any such business opportunity to another person or fails to present any such business opportunity, or information regarding any such business opportunity, to us unless, in the case of any such person who is our director or officer, any such business opportunity is expressly offered to such director or officer solely in his or her capacity as our director or officer. Neither the Sponsors, nor any of their representatives has any duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us or any of our subsidiaries.

Limitations on Liability and Indemnification of Officers and Directors

        Our amended and restated certificate of incorporation will limit the liability of our directors to the fullest extent permitted by the DGCL, and our amended and restated bylaws will provide that we will indemnify them to the fullest extent permitted by such law. We expect to enter into indemnification agreements with our current directors and executive officers prior to the completion of this offering and expect to enter into a similar agreement with any new directors or executive officers.

Exclusive Jurisdiction of Certain Actions

        Our amended and restated certificate of incorporation requires, to the fullest extent permitted by law that derivative actions brought in the name of the Company, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware. Although we believe this provision benefits the Company by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.

Transfer Agent and Registrar

        The transfer agent and registrar for our common stock will be American Stock Transfer & Trust Company, LLC. Its address is 548 Briana Lane, Hudson, WI 54016.

Listing

        We have received approval to list our common stock on the New York Stock Exchange under the trading symbol "WOW."

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SHARES ELIGIBLE FOR FUTURE SALE

        Prior to this offering, there has been no public market for our common stock. Future sales of substantial amounts of our common stock in the public market, or the perception that such sales may occur, could adversely affect the prevailing market price of our common stock. No prediction can be made as to the effect, if any, future sales of shares, or the availability of shares for future sales, will have on the market price of our common stock prevailing from time to time. The sale of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of our common stock.

Sale of Restricted Shares

        Upon completion of this offering, we will have 86,321,711 shares of common stock outstanding. Of these shares of common stock, the 19,047,619 shares of common stock being sold in this offering, plus any shares sold by the selling stockholders upon exercise of the underwriters' option to purchase additional shares, will be freely tradable without restriction under the Securities Act, except for any such shares which may be acquired by an "affiliate" of ours, as that term is defined in Rule 144 promulgated under the Securities Act ("Rule 144"), which shares will be subject to the volume limitations and other restrictions of Rule 144 described below. The remaining 67,274,092 shares of common stock held by our existing stockholders upon completion of this offering will be "restricted securities," as that term is defined in Rule 144, and may be resold only after registration under the Securities Act or pursuant to an exemption from such registration, including, among others, the exemptions provided by Rule 144 and Rule 701 promulgated under the Securities Act, which rules are summarized below. Subject to certain restrictions on transfer pursuant to the Stockholders Agreement, these remaining shares of common stock held by our existing stockholders upon completion of this offering will be available for sale in the public market (after the expiration of the lock-up agreements described below) only if registered or if they qualify for an exemption from registration under Rule 144 or Rule 701 promulgated under the Securities Act, as described below.

Rule 144

        In general, under Rule 144 as currently in effect, persons who are not one of our affiliates at any time during the three months preceding a sale may sell shares of our common stock beneficially held upon the earlier of (1) the expiration of a six-month holding period, if we have been subject to the reporting requirements of the Exchange Act and have filed all required reports for at least 90 days prior to the date of the sale, or (2) a one-year holding period.

        At the expiration of the six-month holding period, a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell an unlimited number of shares of our common stock provided current public information about us is available, and a person who was one of our affiliates at any time during the three months preceding a sale would be entitled to sell within any three-month period a number of shares of common stock that does not exceed the greater of either of the following:

        At the expiration of the one-year holding period, a person who was not one of our affiliates at any time during the three months preceding a sale would be entitled to sell an unlimited number of shares

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of our common stock without restriction. A person who was one of our affiliates at any time during the three months preceding a sale would remain subject to the volume restrictions described above.

        Sales under Rule 144 by our affiliates are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

        In general and subject to certain restrictions under the Stockholders Agreement, and expiration of the applicable lock-up restrictions, under Rule 701 promulgated under the Securities Act, any of our employees, directors or officers who purchased shares from us in connection with a qualified compensatory stock or option plan or other written agreement before the effective date of this offering, or who purchased shares from us after that date upon the exercise of options granted before that date, are eligible to resell such shares in reliance upon Rule 144 beginning 90 days after the date of this prospectus. If such person is not an affiliate, the sale may be made under Rule 144 without compliance with the holding periods of Rule 144 and subject only to the manner-of-sale restrictions of Rule 144. If such a person is an affiliate, the sale may be made under Rule 144 without compliance with its one-year minimum holding period, but subject to the other Rule 144 restrictions.

Stock Plans

        We intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of our common stock issued or reserved for issuance under the 2017 Plan, which we intend to adopt in connection with this offering. The first such registration statement is expected to be filed soon after the date of this prospectus and will automatically become effective upon filing with the SEC. Accordingly, shares registered under such registration statement will be available for sale in the open market following the effective date, unless such shares are subject to vesting restrictions with us, Rule 144 restrictions applicable to our affiliates or the lock-up restrictions described below.

Lock-Up Agreements

        We, and each of our directors, officers and the holders of approximately 65,280,743 shares of our common stock have agreed, subject to certain exceptions, not to offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, whether any of these transactions are to be settled by delivery of our common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of UBS Securities LLC and Credit Suisse Securities (USA) LLC for a period of 180 days after the date of this prospectus (subject to extension in certain circumstances). For additional information, see "Underwriting." The holders of approximately 97% of our outstanding shares of common stock, before giving effect to this offering, as of May 15, 2017 have executed such lock-up agreements.

Registration Rights

        Upon completion of this offering, the holders of an aggregate of approximately 62,687,733 shares of our common stock, or their transferees, will be entitled to certain rights with respect to the registration of their shares under the Securities Act. Except for shares purchased by affiliates, registration of their shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon effectiveness of the registration, subject to the expiration of the lock-up period, with respect to certain of the shares, described under "Underwriting" in this prospectus, and to the extent such shares have been released from any repurchase option that we may hold. See "Certain Relationships and Related Party Transactions—Registration Agreement" for more information.

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CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS FOR
NON-U.S. HOLDERS

Overview

        The following is a general summary of certain U.S. federal income and estate tax consequences to non-U.S. holders, as defined below, of the ownership and disposition of shares of our common stock. This summary deals only with shares of our common stock that are purchased by a non-U.S. holder in this offering and that will be held by such non-U.S. holder as "capital assets" within the meaning of Section 1221 of the Code (generally, property held for investment).

        For purposes of the discussion regarding U.S. federal income tax consequences, a "non-U.S. holder" means a beneficial owner of shares of our common stock that, for U.S. federal income tax purposes, is not any of the following:

        If any entity or arrangement treated as a partnership for U.S. federal income tax purposes holds shares of our common stock, the tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the partner and the partnership. If you are a partner of a partnership considering an investment in shares of our common stock, you should consult your tax advisors.

        This summary is based upon provisions of the Code, applicable U.S. Treasury regulations promulgated thereunder, rulings and other administrative pronouncements and judicial decisions, all as of the date hereof. These authorities are subject to different interpretations and may be changed, perhaps retroactively, so as to result in U.S. federal income and estate tax consequences different from those summarized below. We cannot assure you that a change in law will not significantly alter the tax considerations described in this summary.

        This summary does not address all aspects of U.S. federal income and estate taxation (such as the alternative minimum tax or the unearned income Medicare contribution tax and does not address any aspects of other U.S. federal taxes (such as gift taxes) or state, local or non-U.S. taxes that may be relevant to non-U.S. holders in light of their particular circumstances. In addition, this summary does not describe the U.S. federal income tax consequences applicable to you if you are subject to special treatment under U.S. federal income tax laws (including if you are a U.S. expatriate or an entity subject to the U.S. anti-inversion rules, a bank or other financial institution, an insurance company, a tax-exempt organization, a trader, broker or dealer in securities or currencies, a regulated investment company, a real estate investment trust, a "controlled foreign corporation," a "passive foreign investment company," an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes (or an investor in such a pass-through entity), a person who acquired shares of our common stock as compensation or otherwise in connection with the performance of services, or a

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person who has acquired shares of our common stock as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment).

        We have not sought and do not expect to seek any rulings from the U.S. Internal Revenue Service (the "IRS") regarding the matters discussed below. There can be no assurance that the IRS will not take positions concerning the tax consequences of the ownership or disposition of shares of our common stock that differ from those discussed below.

        The discussion below assumes that no item of income or gain in respect of shares of our common stock at any time will be effectively connected with a U.S. trade or business conducted by a non-U.S. holder. If you are a non-U.S. holder conducting a U.S. trade or business and your income or gain in respect of shares of our common stock is effectively connected with such U.S. trade or business, you should consult your tax advisor regarding the U.S. federal income tax (including branch profits tax) consequences resulting from your investment in shares of our common stock.

         This summary is for general information only and is not intended to constitute a complete description of all U.S. federal income and estate tax consequences for non-U.S. holders relating to the ownership and disposition of shares of our common stock. If you are considering the purchase of shares of our common stock, you should consult your tax advisors concerning the particular U.S. federal income and estate tax consequences to you of the ownership and disposition of shares of our common stock, as well as the consequences to you arising under other U.S. federal tax laws and the laws of any other applicable taxing jurisdiction in light of your particular circumstances.

Dividends

        In general, cash distributions on shares of our common stock will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent any such distributions exceed both our current and our accumulated earnings and profits, they will first be treated as a return of capital reducing your tax basis in our common stock (determined on a share by share basis), but not below zero, and thereafter will be treated as gain from the sale of stock (the treatment of which is discussed below under "—Gain on Disposition of Shares of Common Stock").

        As discussed under "Dividend Policy" above, we do not currently anticipate paying any cash dividends on shares of our common stock in the foreseeable future. In the event that we do pay dividends on shares of our common stock, such dividends paid to a non-U.S. holder generally will be subject to a U.S. federal withholding tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty.

        A non-U.S. holder of shares of our common stock who wishes to claim the benefit of an applicable treaty rate (and avoid backup withholding, as discussed below) for dividends generally will be required (a) to complete IRS Form W-8BEN or W-8BEN-E (or other applicable form) and certify under penalty of perjury that such holder is not a "United States person" as defined under the Code and is eligible for treaty benefits, or (b) if shares of our common stock are held through certain non-U.S. intermediaries (including certain non-U.S. partnerships), to satisfy the relevant certification requirements of applicable U.S. Treasury regulations. This certification must be provided to us (or, if applicable, our paying agent) prior to the payment to the non-U.S. holder of any dividends, and may be required to be updated periodically.

        A non-U.S. holder of shares of our common stock eligible for a reduced rate of United States federal withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

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Gain on Disposition of Shares of Common Stock

        Subject to the discussions below of backup withholding and FATCA (as defined below), any gain realized by a non-U.S. holder on the sale or other disposition of shares of our common stock generally will not be subject to United States federal income tax, unless:

        We will be a USRPHC if at any time that the fair market value of our "United States real property interests," as defined in the Code and applicable Treasury regulations, equals or exceeds 50% of the aggregate fair market value of our worldwide real property interests and our other assets used or held for use in a trade or business. We believe that we are not, and do not anticipate becoming, a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to the fair market value of other business assets, there can be no assurance that we are not currently or will not become a USRPHC in the future. Even if we are or become a USRPHC, so long as our common stock is regularly traded on an established securities market, a non-U.S. holder will be subject to U.S. federal income tax on any gain not otherwise taxable only if such non-U.S. holder actually or constructively owned more than five percent of our outstanding common stock at some time during the applicable period. You should consult your tax advisor about the consequences that could result if we are, or become, a USRPHC.

Information Reporting and Backup Withholding

        The amount of dividends paid to each non-U.S. holder, and the tax withheld with respect to such dividends generally will be reported annually to the IRS and to each such holder, regardless of whether withholding was reduced or eliminated by an applicable tax treaty. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides or is established under the provisions of an applicable income tax treaty or agreement.

        A non-U.S. holder generally will be subject to backup withholding with respect to dividends paid to such holder unless such holder certifies under penalty of perjury (generally on an applicable IRS Form W-8) that it is not a "United States person" as defined under the Code (and the payor does not have actual knowledge or reason to know that such holder is such a United States person), or such holder otherwise establishes an exemption.

        Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale or other disposition by a non-U.S. holder of shares of our common stock within the United States or conducted through certain U.S.-related financial intermediaries unless such non-U.S. holder certifies under penalty of perjury that it is not a "United States person" as defined under the Code (and the payor does not have actual knowledge or reason to know that such holder is such a United States person), or such holder otherwise establishes an exemption.

        Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder's U.S. federal income tax liability provided the required information is timely furnished to the IRS.

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Additional Withholding Tax on Payments Made to Foreign Accounts

        Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act ("FATCA")) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, FATCA may impose a withholding tax of 30% on dividend income from our common stock and, once effective, on the gross proceeds of a sale or other disposition of our common stock, in each case, paid to a "foreign financial institution" or a "non-financial foreign entity" (each as defined in the Code), unless (i) the foreign financial institution undertakes certain diligence and reporting obligations, including providing sufficient documentation evidencing its compliance (or deemed compliance with FATCA), (ii) the non-financial foreign entity either certifies it does not have any "substantial United States owners" (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (i) above, it must enter into an agreement with the U.S. Department of Treasury requiring, among other things, that it undertake to identify accounts held by certain "specified United States persons" or "United States-owned foreign entities" (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Alternatively, foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under certain circumstances, a non-U.S. holder of our common stock might be eligible for refunds or credits of such withholding taxes, and a non-U.S. holder might be required to file a U.S. federal income tax return to claim such refunds or credits.

        Under the applicable U.S. Treasury regulations, withholding under FATCA generally applies to payments of dividends on shares of our common stock and, pursuant to recent administrative guidance, is expected to apply to payments of gross proceeds made after December 31, 2018. Non-U.S. holders should consult their tax advisors regarding the potential application of withholding under FATCA on their investment in our common stock.

U.S. Federal Estate Tax

        Shares of our common stock that are owned (or deemed to be owned) at the time of death by a non-U.S. holder (as specifically defined for U.S. federal estate tax purposes) who is an individual will be includable in such non-U.S. holder's taxable estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

         THE SUMMARY OF CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS ABOVE IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY. POTENTIAL PURCHASERS OF OUR COMMON STOCK ARE URGED TO CONSULT THEIR TAX ADVISORS TO DETERMINE THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS OF OWNING AND DISPOSING OF OUR COMMON STOCK.

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UNDERWRITING

        We are offering the shares of our common stock described in this prospectus through the underwriters named below. UBS Securities LLC and Credit Suisse Securities (USA) LLC are acting as joint book-running managers of this offering and as representatives of the underwriters. We have entered into an underwriting agreement with the representatives and the selling stockholders. Subject to the terms and conditions of the underwriting agreement, each of the underwriters has severally agreed to purchase, and we have agreed to sell to the underwriters, the number of shares of common stock listed next to its name in the following table.

Underwriters
  Number
of Shares

UBS Securities LLC

            

Credit Suisse Securities (USA) LLC

            

RBC Capital Markets, LLC

   

SunTrust Robinson Humphrey, Inc. 

   

Evercore Group L.L.C. 

   

Macquarie Capital (USA) Inc. 

   

LionTree Advisors LLC

   

Raymond James & Associates, Inc. 

   

Total

  19,047,619

        The underwriting agreement provides that the underwriters must buy all of the shares of common stock if they buy any of them. However, the underwriters are not required to pay for the shares covered by the underwriters' option to purchase additional shares as described below.

        Our common stock is offered subject to a number of conditions, including:

        We have been advised by the representatives that the underwriters intend to make a market in our common stock but that they are not obligated to do so and may discontinue making a market at any time without notice.

        In connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses electronically.

Option to Purchase Additional Shares

        The selling stockholders have granted the underwriters an option to buy up to an aggregate of 2,857,142 additional shares of our common stock. The underwriters have 30 days from the date of this prospectus to exercise this option. If the underwriters exercise this option, they will each purchase from the selling stockholders additional shares of common stock approximately in proportion to the amounts specified in the table above.

Underwriting Discount

        Shares sold by the underwriters to the public will initially be offered at the initial offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $        per share from the initial public offering price. Sales of shares made outside of the United States may be made by affiliates of the underwriters. If all the shares are not sold at the initial public offering price, the representatives may change the offering price and the other

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selling terms. Upon execution of the underwriting agreement, the underwriters will be obligated to purchase the shares at the prices and upon the terms stated therein.

        The following table shows the per share and total underwriting discount we will pay to the underwriters assuming both no exercise and full exercise of the underwriters' option to purchase up to 2,857,142 additional shares.

 
  No Exercise   Full Exercise  

Per share

  $              $             

Total

  $              $             

        We estimate that the total expenses of the offering payable by us, not including the underwriting discount, will be approximately $3.5 million.

No Sales of Similar Securities

        We, our executive officers and directors, and holders of substantially all of our common stock have entered into lock-up agreements with the underwriters. Under the lock-up agreements, subject to certain exceptions, we and each of these persons may not, without the prior written approval of UBS Securities LLC and Credit Suisse Securities (USA) LLC, offer, sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly, or hedge our common stock or securities convertible into or exchangeable or exercisable for our common stock. These restrictions will be in effect for a period of 180 days after the date of this prospectus.

        The restrictions in the preceding paragraph relating to us are subject to certain exceptions, including:

        The restrictions in the paragraph above relating to our officers and directors and holders of our common stock are subject to certain exceptions, including:

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        UBS Securities LLC and Credit Suisse Securities (USA) LLC may, at any time and in their sole discretion, release some or all the securities from these lock-up agreements. If the restrictions under the lock-up agreements are waived, shares of our common stock may become available for resale into the market, subject to applicable law, which could reduce the market price of our common stock.

Indemnification

        We have agreed to indemnify the several underwriters against certain liabilities, including certain liabilities under the Securities Act. If we are unable to provide this indemnification, we have agreed to contribute to payments the underwriters may be required to make in respect of those liabilities.

Listing

        We have received approval to have our common stock listed on the New York Stock Exchange under the symbol "WOW."

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Price Stabilization, Short Positions

        In connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price of our common stock during and after this offering, including:

    stabilizing transactions;

    short sales;

    purchases to cover positions created by short sales;

    imposition of penalty bids; and

    syndicate covering transactions.

        Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of our common stock while this offering is in progress. Stabilization transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. These transactions may also include making short sales of our common stock, which involve the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering and purchasing shares of common stock on the open market to cover short positions created by short sales. Short sales may be "covered short sales," which are short positions in an amount not greater than the underwriters' option to purchase additional shares referred to above, or may be "naked short sales," which are short positions in excess of that amount.

        The underwriters may close out any covered short position by either exercising their option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option.

        Naked short sales are short sales made in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchased in this offering.

        The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of that underwriter in stabilizing or short covering transactions.

        These stabilizing transactions, short sales, purchases to cover positions created by short sales, the imposition of penalty bids and syndicate covering transactions may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result of these activities, the price of our common stock may be higher than the price that otherwise might exist in the open market. The underwriters may carry out these transactions on the New York Stock Exchange, in the over-the-counter market or otherwise. Neither we, the selling stockholders, nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of the shares. Neither we, nor any of the underwriters make any representation that the underwriters will engage in these stabilization transactions or that any transaction, once commenced, will not be discontinued without notice.

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Determination of Offering Price

        Prior to this offering, there was no public market for our common stock. The initial public offering price will be determined by negotiation among us and the representatives of the underwriters. The principal factors to be considered in determining the initial public offering price include:

    the information set forth in this prospectus and otherwise available to the representatives;

    our history and prospects and the history and prospects for the industry in which we compete;

    our past and present financial performance;

    our prospects for future earnings and the present state of our development;

    the general condition of the securities market at the time of this offering;

    the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

    other factors deemed relevant by the underwriters and us.

        The estimated public offering price range set forth on the cover page of this preliminary prospectus is subject to change as a result of market conditions and other factors. Neither we nor the underwriters can assure investors that an active trading market will develop for our common stock or that the common stock will trade in the public market at or above the initial public offering price.

Affiliations

        The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and their affiliates may from time to time in the future engage with us and perform services for us or in the ordinary course of their business for which they will receive customary fees and expenses. In addition, an affiliate of Credit Suisse Securities (USA) LLC is the administrative agent under our existing revolving credit facility and affiliates of RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc. are lenders under the existing revolving credit facility. Furthermore, affiliates of UBS Securities LLC, Credit Suisse Securities (USA) LLC, RBC Capital Markets, LLC, SunTrust Robinson Humphrey, Inc., Macquarie Capital (USA) Inc., and Raymond James & Associates, Inc. are expected to be lenders under the New Revolving Credit Facility. In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of us. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of these securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in these securities and instruments.

Other Relationships

        Solebury Capital LLC ("Solebury"), a FINRA member, is acting as our financial advisor in connection with the offering. We expect to pay Solebury, upon the successful completion of this offering, a fee of up to 3.5% of the underwriting discounts and commissions paid by us. We have also agreed to reimburse Solebury for certain expenses incurred in connection with the engagement of up to $25,000. Solebury is not acting as an underwriter and will not sell or offer to sell any securities and will

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not identify, solicit or engage directly with potential investors. In addition, Solebury will not underwrite or purchase any of the offered securities or otherwise participate in any such undertaking.

Electronic Distribution

        A prospectus in electronic format may be made available on the Internet sites or through other online services maintained by one or more of the underwriters participating in this offering, or by their affiliates. In those cases, prospective investors may view offering terms online and, depending upon the particular underwriter, prospective investors may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on any underwriter's website and any information contained in any other website maintained by an underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.

Notice to Prospective Investors in Canada

        The securities may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

        Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.

        Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

Notice to Prospective Investors in European Economic Area

        In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State") an offer to the public of any shares which are the subject of the offering contemplated by this prospectus (the "Shares") may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State of any Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

    (a)
    to any legal entity which is a qualified investor as defined under the Prospectus Directive;

    (b)
    by the underwriters to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the underwriters for any such offer; or

    (c)
    in any other circumstances falling within Article 3(2) of the Prospectus Directive,

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provided that no such offer of Shares shall result in a requirement for the Issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

        For the purposes of this provision, the expression an "offer to the public" in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase any Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State. The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

        The EEA selling restriction is in addition to any other selling restrictions set out in this prospectus.

Notice to Prospective Investors in Australia

        This offering memorandum is not a formal disclosure document and has not been, nor will be, lodged with the Australian Securities and Investments Commission. It does not purport to contain all information that an investor or their professional advisers would expect to find in a prospectus or other disclosure document (as defined in the Corporations Act 2001 (Australia)) for the purposes of Part 6D.2 of the Corporations Act 2001 (Australia) or in a product disclosure statement for the purposes of Part 7.9 of the Corporations Act 2001 (Australia), in either case, in relation to the securities.

        The securities are not being offered in Australia to "retail clients" as defined in sections 761G and 761GA of the Corporations Act 2001 (Australia). This offering is being made in Australia solely to "wholesale clients" for the purposes of section 761G of the Corporations Act 2001 (Australia) and, as such, no prospectus, product disclosure statement or other disclosure document in relation to the securities has been, or will be, prepared.

        This offering memorandum does not constitute an offer in Australia other than to persons who do not require disclosure under Part 6D.2 of the Corporations Act 2001 (Australia) and who are wholesale clients for the purposes of section 761G of the Corporations Act 2001 (Australia). By submitting an application for our securities, you represent and warrant to us that you are a person who does not require disclosure under Part 6D.2 and who is a wholesale client for the purposes of section 761G of the Corporations Act 2001 (Australia). If any recipient of this offering memorandum is not a wholesale client, no offer of, or invitation to apply for, our securities shall be deemed to be made to such recipient and no applications for our securities will be accepted from such recipient. Any offer to a recipient in Australia, and any agreement arising from acceptance of such offer, is personal and may only be accepted by the recipient. In addition, by applying for our securities you undertake to us that, for a period of 12 months from the date of issue of the securities, you will not transfer any interest in the securities to any person in Australia other than to a person who does not require disclosure under Part 6D.2 and who is a wholesale client.

Notice to Prospective Investors in Hong Kong

        The contents of this prospectus have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice. Please note that (i) our securities may not be offered or sold in Hong Kong, by means of this prospectus or any document other than to "professional investors" within the meaning of Part I of Schedule 1 of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) (SFO) and any rules made thereunder, or in other

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circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong) (CO) or which do not constitute an offer or invitation to the public for the purpose of the CO or the SFO, and (ii) no advertisement, invitation or document relating to our securities may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere) which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the securities which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the SFO and any rules made thereunder.

Notice to Prospective Investors in Japan

        Our securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and our securities will not be offered or sold, directly or indirectly, in Japan, or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan, or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

Notice to Prospective Investors in Singapore

        This document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of our securities may not be circulated or distributed, nor may our securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

        Where our securities are subscribed or purchased under Section 275 by a relevant person which is:

    (a)
    a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

    (b)
    a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

      securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired our securities pursuant to an offer made under Section 275 except:

      (1)
      to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

      (2)
      where no consideration is or will be given for the transfer;

      (3)
      where the transfer is by operation of law; or

      (4)
      as specified in Section 276(7) of the SFA.

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Notice to Prospective Investors In Switzerland

        The Prospectus does not constitute an issue prospectus pursuant to Article 652a or Article 1156 of the Swiss Code of Obligations ("CO") and the shares will not be listed on the SIX Swiss Exchange. Therefore, the Prospectus may not comply with the disclosure standards of the CO and/or the listing rules (including any prospectus schemes) of the SIX Swiss Exchange. Accordingly, the shares may not be offered to the public in or from Switzerland, but only to a selected and limited circle of investors, which do not subscribe to the shares with a view to distribution.

Notice to Prospective Investors in United Kingdom

        This prospectus is only being distributed to and is only directed at: (1) persons who are outside the United Kingdom; (2) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (3) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons falling within (1)-(3) together being referred to as "relevant persons"). The shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such shares will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this prospectus or any of its contents.

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LEGAL MATTERS

        Kirkland & Ellis LLP, New York, New York will pass upon the validity of the common stock offered hereby on our behalf. The underwriters are represented by Davis Polk & Wardwell LLP, New York, New York.


EXPERTS

        The combined consolidated financial statements of WideOpenWest, Inc. and subsidiaries and affiliates as of December 31, 2016 and 2015 and for each of the three years in the period ended December 31, 2016, included in this prospectus, have been so included in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, appearing elsewhere herein, given on the authority of said firm as experts in auditing and accounting.


WHERE YOU CAN FIND MORE INFORMATION

        We have filed with the SEC a registration statement on Form S-1, including exhibits and schedules, under the Securities Act with respect to the shares of our common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us and the common stock offered hereby, reference is made to the registration statement and the exhibits and schedules filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement.

        A copy of the registration statement and the exhibits filed therewith may be inspected without charge at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is http://www.sec.gov. Such information is also available free of charge through our website at www.wowway.com/ . To receive copies of public records not posted to the SEC's website at prescribed rates, you may complete an online form at www.sec.gov , send a fax to (202) 772-9337 or submit a written request to the SEC, Office of FOIA/PA Operations, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information. Please note that our website address is provided as an inactive textual reference only. The information contained on, or that can be accessed through, our website is not part of this prospectus and is therefore not incorporated by reference.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 
  Page

Audited Consolidated Financial Statements

 
 

Report of BDO USA, LLP, an Independent Registered Public Accounting Firm

 
F-2

Combined Consolidated Balance Sheets as of December 31, 2016 and 2015

 
F-3

Combined Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014

 
F-4

Combined Consolidated Statements of Changes in Stockholder's Deficit at December 31, 2016, 2015 and 2014

 
F-5

Combined Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014

 
F-6

Notes to the Combined Consolidated Financial Statements for the years ended December 31, 2016, 2015 and 2014

 
F-7

Unaudited Combined Condensed Consolidated Financial Statements

 
 

Combined Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016

 
F-37

Combined Condensed Consolidated Statements of Operations for the three months ended March 31, 2017 and 2016

 
F-38

Combined Condensed Consolidated Statements of Changes in Stockholder's Deficit for the three months ended March 31, 2017

 
F-39

Combined Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016

 
F-40

Notes to the Combined Condensed Consolidated Financial Statements for the three months ended March 31, 2017

 
F-41

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Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholder
WideOpenWest, Inc.
Englewood, Colorado

        We have audited the accompanying combined consolidated balance sheets of WideOpenWest, Inc. and Subsidiaries and Affiliates as of December 31, 2016 and 2015 and the related combined consolidated statements of operations, changes in stockholder's deficit, and cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the combined consolidated financial statements referred to above present fairly, in all material respects, the financial position of WideOpenWest, Inc. and Subsidiaries and Affiliates at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO USA, LLP

Atlanta, Georgia
March 23, 2017

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Combined Consolidated Balance Sheets

 
  December 31,  
 
  2016   2015  
 
  (in millions)
 

Assets

             

Current assets

             

Cash and cash equivalents

  $ 30.8   $ 66.6  

Accounts receivable—trade, net of allowance for doubtful accounts of $9.4 and $6.6, respectively

    87.2     82.6  

Accounts receivable—other

    0.2     6.9  

Prepaid expenses and other

    11.3     15.3  

Total current assets

    129.5     171.4  

Plant, property and equipment, net (note 6)

    995.1     865.3  

Franchise operating rights (note 7)

    1,066.6     1,048.5  

Goodwill (note 7)

    568.0     561.4  

Intangible assets subject to amortization, net (note 8)

    7.6     18.1  

Investments (note 10)

    0.9     16.6  

Other noncurrent assets

    3.1     3.4  

Total assets

  $ 2,770.8   $ 2,684.7  

Liabilities and stockholder's deficit

             

Current liabilities

             

Accounts payable—trade

  $ 21.0   $ 17.7  

Accrued interest

    47.3     65.3  

Accrued liabilities and other (note 11)

    109.8     114.5  

Current portion of debt and capital lease obligations (note 12 and 13)

    22.7     20.6  

Current portion of fair value of derivative instruments (notes 15 and 16)

        2.3  

Current portion of unearned service revenue

    50.2     50.4  

Total current liabilities

    251.0     270.8  

Long term debt and capital lease obligations—less current portion and debt issuance costs (notes 12 and 13)

    2,848.5     2,861.6  

Deferred income taxes, net (note 17)

    370.2     406.5  

Unearned service revenue

    14.5     10.8  

Other noncurrent liabilities

    4.6     1.0  

Total liabilities

    3,488.8     3,550.7  

Commitments and contingencies (note 20)

             

Common stock, $0.01 par value, 1,000 and 5,000 issued and outstanding, respectively

   
   
 

Stockholder's deficit (note 18)

    (58.1 )   (179.8 )

Accumulated deficit

    (659.9 )   (686.2 )

Total stockholder's deficit

    (718.0 )   (866.0 )

Total liabilities and stockholder's deficit

  $ 2,770.8   $ 2,684.7  

   

The accompanying notes are an integral part of these combined consolidated financial statements.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Combined Consolidated Statements of Operations

 
  Year ended December 31,  
 
  2016   2015   2014  
 
  (in millions)
 

Revenue

  $ 1,237.0   $ 1,217.1   $ 1,264.3  

Costs and expenses:

                   

Operating (excluding depreciation and amortization)

    668.3     678.6     737.0  

Selling, general and administrative

    116.4     110.6     135.8  

Depreciation and amortization

    207.0     221.1     251.3  

Management fee to related party (note 21)

    1.7     1.9     1.7  

    993.4     1,012.2     1,125.8  

Income from operations

    243.6     204.9     138.5  

Other income (expense):

                   

Interest expense

    (211.1 )   (226.0 )   (237.0 )

Realized and unrealized gain on derivative instruments (note 16)

    2.3     5.6     4.1  

Gain on sale of assets (note 5)

            52.9  

Loss on early extinguishment of debt (note 9)

    (38.0 )   (22.9 )    

Other income (expense), net

    2.2     (0.4 )   3.4  

Loss before provision for income tax

    (1.0 )   (38.8 )   (38.1 )

Income tax (expense) benefit, net (note 17)

    27.3     (9.9 )   10.8  

Net income (loss)

  $ 26.3   $ (48.7 ) $ (27.3 )

   

The accompanying notes are an integral part of these combined consolidated financial statements.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Combined Consolidated Statements of Changes in Stockholder's Deficit

 
  Common Stock/ Units    
   
   
 
 
  Common
Stock
  Common
Stock
Affiliate
Corporations
  Management
Units
Class C(1)
  Management
Units
Class D(1)
  Stockholder's
Deficit
  Accumulated
Deficit
  Total
Stockholder's
Deficit
 
 
  (in millions, except Stock and Unit amounts)
 

Balances at January 1, 2014

    1,000     5,000     403,342       $ (176.8 ) $ (610.2 ) $ (787.0 )

Management Unit grants repurchases, net

            6,801         (1.9 )       (1.9 )

Net loss

                        (27.3 )   (27.3 )

Balances at December 31, 2014

    1,000     5,000     410,143       $ (178.7 ) $ (637.5 ) $ (816.2 )

Management Unit grants repurchases, net

            (20,748 )       (0.4 )       (0.4 )

Management Units converted to Parent units

            (275,309 )                

Cancelled unvested Units

            (114,086 )                

Merger of Affiliate Corporations

        (1,000 )                    

Other

                    (0.7 )       (0.7 )

Net loss

                        (48.7 )   (48.7 )

Balances at December 31, 2015

    1,000     4,000           $ (179.8 ) $ (686.2 ) $ (866.0 )

Contribution from Parent(2)

                    123.0         123.0  

Management Units granted, net

                201,696              

Distribution to Parent

                    (2.2 )       (2.2 )

Non-cash compensation expense (note 19)

                    1.1         1.1  

Merger of Affiliate Corporations

        (4,000 )                    

Other

                    (0.2 )       (0.2 )

Net income

                        26.3     26.3  

Balances at December 31, 2016

    1,000             201,696   $ (58.1 ) $ (659.9 ) $ (718.0 )

(1)
See note 18.

(2)
On January 12, 2016, June 29, 2016 and December 13, 2016, Parent contributed $25.0 million, $25.0 million and $73.0 million, respectively.

   

The accompanying notes are an integral part of these combined consolidated financial statements.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Combined Consolidated Statements of Cash Flows

 
  Year ended December 31,  
 
  2016   2015   2014  
 
  (in millions)
 

Cash flows from operating activities:

                   

Net income (loss)

  $ 26.3   $ (48.7 ) $ (27.3 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

                   

Depreciation and amortization

    207.0     221.1     251.3  

Realized and unrealized gain on derivative instruments (notes 15 and 16)            

    (2.3 )   (5.6 )   (4.1 )

Deferred income taxes (note 17)

    (36.3 )   4.4     (17.4 )

Provision for doubtful accounts

    21.4     24.9     24.1  

Gain on sale of assets

            (52.9 )

Amortization of debt issuance costs and premium, net

    7.6     12.3     15.6  

Gain on sale of investment

    (2.2 )        

Loss on early extinguishment of debt (note 9)

    7.4     22.9      

Premium from debt issuance

            13.0  

Non-cash compensation

    1.1          

Other non-cash items

    (0.2 )   (0.6 )   (2.2 )

Changes in operating assets and liabilities, excluding the impact of acquisitions:

                   

Receivables and other operating assets

    (12.6 )   (26.3 )   (35.3 )

Payables and accruals

    (26.0 )   3.8     36.7  

Net cash provided by operating activities

  $ 191.2   $ 208.2   $ 201.5  

Cash flows from investing activities:

                   

Capital expenditures

  $ (287.5 ) $ (231.9 ) $ (251.9 )

Anne Arundel Broadband majority interest purchase, net of cash acquired (note 5)

            (5.1 )

Newnan, Georgia asset purchase, net of cash received (note 4)

    (54.3 )        

Proceeds from South Dakota systems asset sale (note 5)

            262.0  

Sale of investment

    17.7          

Other investing activities

    2.7     (0.6 )   0.6  

Net cash provided by (used in) investing activities

  $ (321.4 ) $ (232.5 ) $ 5.6  

Cash flows from financing activities:

                   

Proceeds from issuance of debt (note 12)

  $ 2,505.1   $ 1,410.4   $ 193.2  

Payments on debt and capital lease obligations

    (2,529.6 )   (1,581.6 )   (151.4 )

Distribution to parent (note 21)

    (2.2 )        

Contribution from parent (note 21)

    123.0          

Payment of debt issuance costs (note 9)

    (1.8 )   (0.4 )    

Repurchase of management units

        (0.4 )   (1.9 )

Other

    (0.1 )   (1.0 )    

Net cash provided by (used in) financing activities

  $ 94.4   $ (173.0 ) $ 39.9  

Increase (decrease) in cash and cash equivalents

    (35.8 )   (197.3 )   247.0  

Cash and cash equivalents, beginning of period

    66.6     263.9     16.9  

Cash and cash equivalents, end of period

  $ 30.8   $ 66.6   $ 263.9  

Supplemental disclosures of cash flow information:

                   

Cash paid during the periods for interest

  $ 222.6   $ 215.3   $ 217.1  

Cash paid during the periods for income taxes

  $ 8.1   $ 5.0   $  

Non-cash financing activities:

                   

Changes in non-cash capital expenditure accruals

  $ 11.0   $ (5.7 ) $ 2.6  

Assets acquired under capital lease obligations

  $   $ 0.1   $ 7.5  

   

The accompanying notes are an integral part of these combined consolidated financial statements.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements

1. Organization

        WideOpenWest, Inc. ("WOW!" or the "Company") was organized in Delaware in July 2012 as WideOpenWest Kite, Inc. WideOpenWest Kite Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017. WOW! is wholly owned by Racecar Acquisition, LLC ("Racecar Acquisition"), which is a wholly owned subsidiary of WideOpenWest Holdings, LLC (the "Parent"). In the following context, the terms we, us, WOW!, or the Company may refer, as the context requires, to WOW! or, collectively, WOW! and its subsidiaries.

        On April 1, 2016, the Company consummated a restructuring (the "Restructuring") whereby WideOpenWest Finance, LLC ("WOW! Finance") became a wholly owned subsidiary of WOW!. Previously, WOW! Finance was owned by WOW!, WideOpenWest Illinois, Inc., WideOpenWest Ohio, Inc. and Sigecom, Inc. (collectively, the "Members", or WOW! and "Affiliates"). Prior to the restructuring, the Members were wholly owned subsidiaries of Racecar Acquisition.

        As a result of the Restructuring, the Affiliates merged with and into WOW!, WOW! became the sole subsidiary of Racecar Acquisition and WOW! Finance became a wholly owned subsidiary of WOW!.

        The Company is a fully integrated provider of high-speed data ("HSD"), cable television ("Video"), and digital telephony ("Telephony") services. The Company serves customers in twenty Midwestern and Southeastern markets in the United States. The Company manages and operates its Midwestern broadband cable systems in Detroit and Lansing, Michigan; Chicago, Illinois; Cleveland and Columbus, Ohio; Evansville, Indiana; Baltimore, Maryland and Lawrence, Kansas. The Southeastern systems are located in Augusta, Columbus, Newnan and West Point, Georgia; Charleston, South Carolina; Dothan, Auburn, Huntsville and Montgomery, Alabama; Knoxville, Tennessee; and Panama City and Pinellas County, Florida.

2. Summary of Significant Accounting Policies

Principles of Combination and Consolidation and Basis of Presentation

        Prior to the restructuring, the Members were all under common control. The financial statements presented herein include the consolidated accounts of WOW! and its subsidiaries and the combined accounts of its Affiliates. All significant intercompany accounts and transactions have been eliminated in consolidation and combination. As a result, the combined consolidated financial statements of WOW! reflect all transactions of the wholly owned subsidiaries of Parent and Racecar Acquisition.

        Certain employees of WOW! participate in equity plans administered by Parent. Because the management units from the equity plan are issued from Parents' ownership structure, the management units' value directly correlates to the results of WOW!, as the primary asset of Parent is its investment in WOW!. The management units for the equity plan have been "pushed down" to the Company, as the management units have been utilized as equity-based compensation for WOW! management. All of the management units discussed herein are legally Parent's.

Use of Estimates

        The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These accounting principles require management to make assumptions and estimates that affect the reported amounts and disclosures of assets and liabilities, derivative financial instruments and disclosure of contingent assets

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

and liabilities at the date of the financial statements and the reported amounts and disclosures of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, due to the inherent uncertainties in making estimates, actual results could differ from those estimates.

Cash and Cash Equivalents

        Cash equivalents represent short-term investments consisting of money market funds that are carried at cost, which approximates fair value. The Company considers all short-term investments with an original maturity of three months or less at the date of purchase to be cash equivalents.

Bad Debt

        Bad debt expense and the allowance for doubtful accounts are based on historical trends. The Company's policy to reserve for potential bad debts is based on the aging of the individual receivables. The Company manages credit risk by disconnecting services to customers who are delinquent, generally after sixty days of delinquency. The individual receivables are written-off after all reasonable efforts to collect the funds have been made. Actual write-offs may differ from the amounts reserved.

        The change in the allowance for doubtful accounts consists of the following for the years ended December 31 (in millions):

 
  2016   2015  

Balance at beginning of year

  $ 6.6   $ 11.5  

Provision charged to expense

    21.4     24.9  

Accounts written off

    (20.8 )   (24.1 )

Change in unreturned equipment reserves

    1.6     (5.3 )

Other

    0.6     (0.4 )

Balance at end of year

  $ 9.4   $ 6.6  

Plant, Property and Equipment

        Plant, property and equipment are recorded at cost and include costs associated with the construction of cable transmission and distribution facilities and new service installations at the customer location. Capitalized costs include materials, labor, and certain indirect costs attributable to the capitalization activity. Maintenance and repairs are expensed as incurred. Upon sale or retirement of an asset, the cost and related depreciation are removed from the related accounts and resulting gains or losses are reflected in operating results. We make judgments regarding the installation and construction activities to be capitalized. We capitalize direct labor associated with capitalizable activities and indirect cost using standards developed from operational data, including the proportionate time to perform a new installation relative to the total installation activities and an evaluation of the nature of the indirect costs incurred to support capitalizable activities. Judgment is required to determine the extent to which indirect costs incurred related to capitalizable activities. Indirect costs include (i) employee benefits and payroll taxes associated with capitalized direct labor, (ii) direct variable costs of installation and construction vehicle costs, (iii) the direct variable costs of support personnel directly

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

involved in assisting with installation activities, such as dispatchers and (iv) other indirect costs directly attributable to capitalizable activities.

        The Company has evaluated certain of its lease agreements relating to fleet vehicles and determined the leases qualify as capital leases.

        Plant, property and equipment are depreciated over the estimated useful life upon being placed into service. Depreciation of plant, property and equipment is provided on a straight-line method, over the following estimated useful lives:

Asset Category
  Estimated Useful
Lives (Years)

Office and technical equipment

  3 - 10

Computer equipment and software

  3

Customer premise equipment

  5

Vehicles

  5

Headend equipment

  7

Distribution facilities

  10

Building and leasehold improvements

  5 - 20

        Leasehold improvements are depreciated over the shorter of the estimated useful lives or lease terms.

Intangible Assets and Goodwill

        Intangible assets consist primarily of acquired franchise operating rights, franchise related customer relationships and goodwill. Franchise operating rights represent the value attributable to agreements with local franchising authorities, which allow access to homes in the public right of way. The Company's franchise operating rights were acquired through business combinations. The Company does not amortize franchise operating rights as it has determined that they have an indefinite life. Costs incurred in negotiating and renewing franchise operating agreements are expensed as incurred. Franchise related customer relationships represent the value to the Company of the benefit of acquiring the existing cable subscriber base and are amortized over the estimated life of the subscriber base (four years) on a straight-line basis, which is shorter than the economic useful life, which approximates an accelerated method. Goodwill represents the excess purchase price over the fair value of the identifiable net assets acquired in business combinations.

Asset Impairments

    Long-lived Assets

        The Company evaluates the recoverability of its long-lived assets whenever events or substantive changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is based on the undiscounted cash flows generated by the underlying asset groups, including estimated future operating results, trends or other determinants of fair value. If the total of the expected future undiscounted cash flows were less than the carrying amount of the asset group, the Company would recognize an impairment charge to the extent the carrying amount of the asset group exceeds its

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

estimated fair value. The Company had no triggering events or impairment of its long-lived assets in any of the periods presented.

    Franchise Operating Rights

        The Company evaluates the recoverability of its franchise operating rights at least annually on October 1, or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. The Company may first choose to assess qualitative factors to determine whether it is more likely than not that the fair value of a franchise operating right is less than its carrying amount. The Company evaluates the franchise operating rights for impairment by comparing the carrying value of the intangible asset to its estimated fair value. Any excess of the carrying value over the fair value would be expensed as an impairment loss.

        The Company calculates the fair value of franchise operating rights using the multi-period excess earnings method, an income approach, which calculates the value of an intangible asset by discounting its future cash flows. The fair value is determined based on estimated discrete discounted future cash flows attributable to each franchise operating right intangible asset using assumptions consistent with internal forecasts. Assumptions key in estimating fair value under this method include, but are not limited to, revenue and subscriber growth rates (less anticipated customer churn), operating expenditures, capital expenditures (including any build out), market share achieved, contributory asset charge rates, tax rates and discount rate. The discount rate used in the model represents a weighted average cost of capital and the perceived risk associated with an intangible asset such as our franchise operating rights.

        There were no impairments of franchise operating rights in any of the periods presented as the fair values of indefinite lived intangible assets computed using the methodology described above were in excess of their carrying values.

    Goodwill

        The Company assesses the recoverability of its goodwill at least annually on October 1, or more frequently whenever events or substantive changes in circumstances indicate that the asset might be impaired. The Company may first choose to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first and second steps of the goodwill impairment test are unnecessary. The Company may also choose to by-pass this assessment and proceed directly to the first step of the goodwill impairment test.

        In the first step of assessing goodwill for impairment, the Company assesses the recoverability for each reporting unit, which are represented by geographical operations of cable systems managed by the Company. The Company utilizes a discounted cash flow analysis to estimate the fair value of each reporting unit and compares such value to the carrying amount of the reporting unit. In the event that the carrying amount exceeds the fair value, the Company would be required to estimate the fair value of the assets and liabilities of the reporting unit as if the unit were acquired in a business combination, thereby revaluing goodwill. Any excess of the carrying value of goodwill over the revalued goodwill would be expensed as an impairment loss.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

        Significant judgment by management is required to determine estimates and assumptions used in the valuation of plant, property and equipment, intangible assets and goodwill. Through December 31, 2016, the Company has not recognized an impairment of these items.

Debt Issuance Costs

        Debt issuance costs incurred by the Company are capitalized and are amortized over the life of the related debt using the effective interest rate method and are included with long-term debt in the accompanying combined consolidated balance sheets.

Other Noncurrent Assets

        Other noncurrent assets are comprised primarily of long-term prepaid software costs, prepaid franchise fees, and prepaid site leases. All prepaids are recognized as operating expenses over the period of usage.

Fair Value of Financial Instruments

        The carrying amounts reported in the combined consolidated balance sheet for cash and cash equivalents as well as derivative instruments are carried at fair value. The carrying amounts reported in the combined consolidated balance sheet for accounts receivable and accounts payable approximate fair value due to their short term maturities. The fair value of long-term debt is based on the debt's variable rate of interest and the Company's own credit risk and risk of nonperformance, as required by the authoritative guidance.

        Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of trade receivables and cash and cash equivalents. The Company places its cash and cash equivalents with high credit quality financial institutions. The counterparties to derivative transactions are major financial institutions. The Company does not enter into master netting arrangements. The Company periodically assesses the creditworthiness of the institutions with which it invests and counterparties to derivative transactions. The Company does, however, maintain invested balances in excess of federally insured limits.

Programming Costs and Deferred Credits

        Programming is acquired for distribution to subscribers, generally pursuant to multi-year license agreements, with rates typically based on the number of subscribers that receive the programming. These programming costs are included in operating expenses in the month the programming is distributed.

        Deferred credits consist primarily of incentives received or receivable from cable networks for license of their programming. These incentive payments are deferred and recognized over the term of the related programming agreements as a reduction to programming costs in operating expenses.

Asset Retirement Obligations

        The Company accounts for its asset retirement obligations in accordance with the authoritative guidance which requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the fair value of the liability can be reasonably estimated.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

        Certain of the Company's franchise agreements and leases contain provisions requiring the Company to restore facilities or remove equipment in the event that the franchise or lease agreement is not renewed. The Company expects to continually renew its franchise agreements. Accordingly, the possibility is remote that the Company would be required to incur significant restoration or removal costs related to these franchise agreements in the foreseeable future. An estimated liability, which could be significant, would be recorded in the unlikely event a franchise agreement containing such a provision were no longer expected to be renewed.

        An estimate of the obligations related to the removal provisions contained in the Company's lease agreements has been made and recorded in the combined consolidated financial statements; however, the amount is not material.

Revenue Recognition

        Charges for HSD, Video and Telephony services are billed in advance. Revenue for equipment rental, advertising, Video on Demand ("VOD") and pay-per-view programming is recognized as the service is provided and generally billed in arrears based upon monthly service charges or fees per event in the period that the services are provided. Amounts billed in excess of recognized revenue are recorded as unearned service revenue. Installation revenue is recognized in the period the installation services are provided to the extent of direct selling costs. Any remaining amounts are deferred and recognized over the estimated average period that the subscribers are expected to remain connected to the cable system. The Company also leases to third parties some of its fiber network. Upfront fees for these lease agreements are recorded as unearned revenue and recognized as revenue over the term of the lease.

        Under the terms of the Company's non-exclusive franchise agreements, the Company is generally required to pay up to 5% of its gross revenues derived from providing video (but not HSD or Telephony) to the local franchise authority. The Company normally passes these fees through to its video subscribers. Franchise fees collected and paid are reported as revenues and operating expenses, respectively. Revenue from advertising sales is recognized when the commercial announcements are broadcast.

        The Company's trade receivables are subject to credit risk, as customer deposits are generally not required. The Company's credit risk is limited due to the large number of customers, individually small balances and short payment terms. We manage credit risk by screening applicants through the use of internal customer information, identification verification tools and credit bureau data. If a customer account is delinquent, various measures are used to collect amounts owed, including termination of the customer's service.

Advertising Costs

        The cost of advertising is expensed as incurred and is included in selling, general and administrative expenses in the accompanying combined consolidated statements of operations. Advertising expense during the years ended December 31, 2016, 2015 and 2014 was $22.9 million, $20.4 million and $19.6 million, respectively.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Income Taxes

        The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        As a result of the Restructuring, the Affiliates merged with and into WOW!, WOW! became the sole subsidiary of Racecar Acquisition and WOW! Finance became a wholly owned subsidiary of WOW!.

        As a result of the Restructuring, WOW! Finance became a single member LLC for federal income tax purposes. The Restructuring is treated as a change in tax status related to WOW! Finance, since a single member LLC is required to record current and deferred income taxes reflecting the results of its operations. We do not anticipate that the Restructuring will have any significant impact on future operating cash flows, however, as WOW! has net operating loss carryforwards that would significantly reduce any required prospective tax payments.

Derivative Financial Instruments

        The Company used derivative financial instruments to manage its exposure to fluctuations in interest rates by entering into interest rate exchange agreements, such as interest rate swaps and interest rate caps. All derivatives, whether designated as a hedge or not, are required to be recorded on the combined consolidated balance sheet at fair value. If the derivative is not designated as a hedge, changes in the fair value of the derivative are recognized in earnings. None of the derivative instruments in effect during the period were designated as hedges for financial reporting purposes.

Share-based Compensation

        The Company's share-based compensation consists of awards of management incentive units. Compensation costs associated with these awards are based on the estimated fair value at the date of grant and are recognized over the period in which any related services are provided or when it is probable any related performance condition will be met and distributions are declared. The Company estimates forfeiture related to these awards based on historical data. The Company recorded $1.1 million of compensation expense during the year ended December 31, 2016. Compensation expense was not significant for the years ended December 31, 2015 and 2014.

Segments

        The Company's operations are managed on the basis of geographic operating segments. The Company has evaluated the criteria for aggregation of the operating segments and believes it meets each of the respective criteria set forth. The Company delivers similar products and services within each of its operations. Each geographic service area utilizes similar means for delivering the programming of the Company's services; has similarity in the type or class of customer receiving the products and services; distributes the Company's services over a unified network; and operates within a consistent regulatory environment. In addition, each of the operating segment results have similar economic characteristics. In light of the Company's similar services, means for delivery, similarity in

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

type of customers, the use of a unified network and other considerations across its geographic operating structure, management has determined that the Company has one reportable segment, broadband services.

Recent Accounting Pronouncements

        In August 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-15 to topic 230, Statement of Cash Flows, making changes to the classification of certain cash receipts and cash payments in order to reduce diversity in presentation. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The update addresses eight specific cash flow issues, of which only one is applicable to our financial statements. The Company does not believe that the adoption of this pronouncement will have a material impact on its combined consolidated financial position, results of operations or cash flows.

        In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09") which is intended to simplify certain aspects of the accounting for share-based payments to employees. The guidance in ASU 2016-09 requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled rather than recording excess tax benefits or deficiencies in additional paid-in capital. The guidance in ASU 2016-09 also allows an employer to repurchase more of an employee's shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. For public companies, ASU 2016-09 is effective for interim and annual periods beginning after December 15, 2016, and requires a modified retrospective approach to adoption. Early adoption is permitted. The Company does not believe that the adoption of this pronouncement will have a material impact on its combined consolidated financial position, results of operations or cash flows.

        In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company will adopt this guidance beginning with its first quarter ending March 31, 2019. The Company is in the process of evaluating the future impact of ASU 2016-02 on its combined consolidated financial position, results of operations or cash flows.

        In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)". ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity is required to follow five steps which are

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

comprised of (a) identifying the contract(s) with a customer; (b) identifying the performance obligations in the contract; (c) determining the transaction price; (d) allocating the transaction price to the performance obligations in the contract and (e) recognizing revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until January 1, 2018.

        The Company has completed a comprehensive analysis of its revenue streams and contractual arrangements to identify the effects of ASC 606 and is in the process of finalizing new accounting and reporting policies, processes, and internal controls related to the adoption of the new revenue recognition standard. Under our current accounting policies, the Company recognizes revenue related to installation activities upfront to the extent of direct selling costs, which generally results in recognition of revenue when the installation related activities have been provided to the customer. Under the new revenue recognition standard, the majority of the Company's installation related activities are not considered to be separate performance obligations and non-refundable upfront fees related to installations must be assessed to determine whether they provide the customer with a material right. As a result of the Company's analysis performed, we expect to recognize installation revenue (i) for month-to-month service contracts over the period which the customer is expected to benefit from the ability to avoid paying an additional fee upon renewal and (ii) for fixed term service contracts (e.g., 12 months to 24 months) ratably over the term of the contract. In addition, the Company will be required to capitalize costs associated with obtaining and fulfilling contracts with our customers, including sales commissions, and will amortize these costs over the expected life of the customer. The Company's installation revenue and sales commission expense represent approximately 2% of total revenue and expense, respectively, and any changes resulting from adoption of the new pronouncement are not expected to have a material impact to the financial statements. The Company is continuing to review and evaluate other matters which are expected to have a less significant impact that may result from adoption of the standard.

        ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2018. The Company has not yet decided which implementation method it will adopt.

        In March 2016, the FASB issued ASU 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) ("ASU 2016-08"), which amends the principal-versus-agent implementation guidance and illustrations in ASC 606. The FASB issued ASU 2016-08 in response to concerns identified by stakeholders, including those related to determining the appropriate unit of account under the revenue standard's principal-versus-agent guidance and applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard's control principle. ASU 2016-08 has the same effective date as ASU 2014-09 and requires adopting ASU 2016-08 by using the same transition method used to adopt ASU 2014-09. The Company does not believe this will have a material impact on the Company's combined consolidated financial position, results of operations or cash flows.

    Recently Adopted Accounting Pronouncements

        In April 2015, the FASB issued ASU 2015-03, simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt discounts. The

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

ASU is effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The ASU requires retrospective application to all prior periods presented in the financial statements. The adoption of this pronouncement has been reflected in the combined consolidated balance sheets. The Company has adjusted the accompanying December 31, 2015 combined consolidated balance sheet by decreasing long term debt by $35.4 million. See further disclosure in Note 12—Long-Term Debt and Capital Leases.

        In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2015-17"), which requires that all deferred tax liabilities and assets be classified as noncurrent amounts on the balance sheet. ASU 2015-17 will be effective for interim and annuals periods beginning after December 15, 2016 and may be applied prospectively or retrospectively. Early adoption of the standard is permitted. The Company early adopted this standard during the first quarter of 2016 and has applied retrospective treatment. The adoption of this standard did not have a material effect on the Company's results of operation, financial condition or cash flows. Prior periods have been retrospectively adjusted.

3. Crestview Transaction

        On December 18, 2015, funds managed by Crestview Advisors, L.L.C. ("Crestview"), a private equity firm based in New York, and Parent consummated a transaction whereby Crestview Partners III GP, L.P. became the beneficial owner of approximately 35% of Parent. Under terms of the agreement (the "Crestview Purchase Agreement"), Crestview's funds purchased units held by Avista Capital Partners ("Avista") and other unitholders, and made a $125.0 million primary investment in newly-issued units. Crestview has extensive experience in the telecommunications industry and the Company believes that this investment will help it capitalize on future growth opportunities.

        On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in Parent.

        As of December 31, 2016, $123.0 million of proceeds from these transactions have been contributed to the Company while the remaining $20.1 million, net of accrued and paid transaction expenses, have been recorded to Parent's balance sheet and have not been pushed down or reflected in the Company's combined consolidated financial statements.

4. Acquisitions

    NuLink Acquisition

        On September 9, 2016, the Company consummated its Asset Purchase Agreement to acquire substantially all of the operating assets of HC Cable Opco, LLC, d/b/a NuLink, a privately-held company based in Newnan, Georgia. The purchase price of $54.3 million is subject to normal and customary purchase price adjustments and was paid in cash. The results of Nulink's results of operations since the purchase date have been included in the Company's combined consolidated statement of operations and the purchase assets and liabilities have been included in the Company's combined consolidated balance sheets. The preliminary purchase allocation included in the Company's combined consolidated balance sheets is subject to adjustments. The Company is still in the process of finalizing the valuation of certain intangible assets.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

4. Acquisitions (Continued)

    Anne Arundel Broadband Investment

        On May 1, 2014, the Company increased its 5% ownership interest in Anne Arundel Broadband, LLC ("AAB") to a 75% ownership interest through a purchase of additional equity in AAB for approximately $5.5 million, including cash acquired. The results of AAB have been included in the combined consolidated financial statements beginning May 1, 2014. During the quarter ended September 30, 2015, the Company increased its 75% ownership interest in AAB to a 100% ownership interest through a purchase of additional equity in AAB for approximately $2.6 million.

5. Asset Sales

    Assets Held for Sale Lawrence, Kansas System

        During the quarter ended September 30, 2016, the Company's Board of Directors approved a plan to actively market the sale of its Lawrence, Kansas system. As a result of this plan, the Company concluded that as of September 30, 2016, these assets and liabilities met the criteria to be classified as assets held for sale. See Note 22—Subsequent Events for further details on the consummation of the Asset Purchase Agreement between Midcontinent Communications ("MidCo") and the Company. As of December 31, 2016, the Lawrence, Kansas system had $174.5 million in total assets (net of intercompany balance) and $3.9 million in total liabilities (net of intercompany balance) and were included in the Company's combined consolidated balance sheets.

    Sale of South Dakota Systems

        On June 12, 2014, the Company and Clarity Telecom ("Clarity") entered into an agreement (the "Asset Purchase Agreement") under which Clarity would acquire the Company's Rapid City and Sioux Falls, South Dakota Systems (the "South Dakota Systems"). On September 30, 2014, the Company and Clarity consummated the asset sale for gross proceeds of approximately $262.0 million in cash, subject to certain adjustments set forth in the Asset Purchase Agreement. As a result of the sale, the Company recorded a gain totaling $52.9 million.

6. Plant, Property and Equipment

        Plant, property and equipment consist of the following:

 
  December 31,
2016
  December 31,
2015
 
 
  (in millions)
 

Distribution facilities

  $ 1,336.4   $ 1,121.4  

Customer premise equipment

    376.9     368.6  

Head-end equipment

    299.9     271.2  

Telephony infrastructure

    123.8     115.5  

Computer equipment and software

    95.4     81.8  

Vehicles

    32.1     29.6  

Buildings and leasehold improvements

    44.9     44.3  

Office and technical equipment

    36.2     34.2  

Land

    6.7     6.7  

Construction in progress (including material inventory and other)

    110.5     93.6  

Total plant, property and equipment

    2,462.8     2,166.9  

Less accumulated depreciation

    (1,467.7 )   (1,301.6 )

  $ 995.1   $ 865.3  

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

6. Plant, Property and Equipment (Continued)

        Depreciation expense for the years ended December 31, 2016, 2015 and 2014 was $193.4 million, $195.9 million, and $215.9 million, respectively. Included in depreciation expense were write-offs and sales of customer premises equipment of $0.8 million, $0.5 million, and $0.9 million for the years ended December 31, 2016, 2015 and 2014, respectively.

7. Franchise Operating Rights & Goodwill

        Changes in the carrying amounts of our franchise operating rights and goodwill during 2016 and 2015 are set forth below:

 
  January 1,
2016
  Acquisitions   Sale   December 31,
2016
 
 
  (in millions)
 

Franchise operating rights

  $ 1,048.5   $ 18.1   $   $ 1,066.6  

Goodwill

    561.4     6.6         568.0  

  $ 1,609.9   $ 24.7   $   $ 1,634.6  

 

 
  January 1,
2015
  Acquisitions   Sale   December 31,
2015
 
 
  (in millions)
 

Franchise operating rights

  $ 1,048.5   $   $   $ 1,048.5  

Goodwill

    561.4             561.4  

  $ 1,609.9   $   $   $ 1,609.9  

8. Intangible Assets Subject to Amortization

        Intangible assets subject to amortization consist primarily of customer relationships and changes in the carrying amounts during 2016 and 2015 are set forth below:

 
  January 1,
2016
  Acquisitions   Sale   Amortization   December 31,
2016
 
 
  (in millions)
 

Customer relationships

  $ 12.0   $ 2.8   $   $ (11.2 ) $ 3.6  

Other

    6.1     0.3         (2.4 )   4.0  

  $ 18.1   $ 3.1   $   $ (13.6 ) $ 7.6  

 

 
  January 1,
2015
  Acquisitions   Sale   Amortization   December 31,
2015
 
 
  (in millions)
 

Customer relationships

  $ 32.9   $   $   $ (20.9 ) $ 12.0  

Other

    9.7     0.7         (4.3 )   6.1  

  $ 42.6   $ 0.7   $   $ (25.2 ) $ 18.1  

        Amortization expense is included in depreciation and amortization expense in the accompanying combined consolidated statements of operations. Amortization expense for years ended December 31, 2016, 2015 and 2014 was $13.6 million, $25.2 million and $34.5 million, respectively.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

8. Intangible Assets Subject to Amortization (Continued)

        Scheduled amortization of the Company's intangible assets as of December 31, 2016 for the next five years is as follows (in millions):

2017

  $ 2.4  

2018

    2.2  

2019

    1.6  

2020

    0.9  

2021

    0.2  

Thereafter

    0.3  

  $ 7.6  

9. Debt Issuance Costs, Net

        Debt issuance costs, net, which relate to the Company's debt and credit facilities in place, consist of the following:

 
  December 31,
2016
  December 31,
2015
 
 
  (in millions)
 

Debt issuance costs

  $ 41.3   $ 60.5  

Less accumulated amortization

    (18.4 )   (25.1 )

  $ 22.9   $ 35.4  

        As discussed in note 12, during 2016 and 2015, the Company entered into certain debt agreements resulting in the following debt issuance costs being capitalized.

 
  December 31,
2016
  December 31,
2015
 
 
  (in millions)
 

Senior Secured Credit Facility

  $ 1.8   $ 0.4  

        In connection with the refinancing, the Company recorded $38.0 million, $22.9 million and $nil million of losses on debt extinguishments for the years ended December 31, 2016, 2015 and 2014, respectively. The majority of the losses related to the write-off of prior capitalized debt issue costs related to the extinguished debt and costs associated with these financings. Amortization of debt issuance costs is included in interest expense in the combined consolidated statements of operations.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

10. Investments

        In conjunction with the acquisition of Knology, Inc, the Company acquired investments and equity ownership in its associated companies which consisted of the following:

 
  December 31,
2016
  December 31,
2015
 
 
  (in millions)
 

Rio Holdings, Inc. 

  $ 0.9   $ 0.9  

Tower Cloud, Inc. 

        15.7  

Total investments

  $ 0.9   $ 16.6  

        Rio Holdings, Inc. ("Rio Holdings") owns 24.7% class A general partnership units in Grande Investment, L.P., which through a holding company owns 100% of Grande Communications Networks, LLC. The Company's investment in Rio Holdings is accounted for under the cost method of accounting, adjusted for impairment write-downs, because the Company owns less than a 20% interest in Rio Holdings.

        The Company, through its wholly owned subsidiaries, owned approximately 33,620,177 shares, or 9.6%, of the series A and B preferred stock of Tower Cloud, Inc. ("Tower Cloud"). The Company sold its investment in Tower Cloud for approximately $17.9 million and recorded a gain on the sale of $2.2 million during the year ended December 31, 2016. The Company previously accounted for the investment using the cost method.

11. Accrued Liabilities and Other

        Accrued liabilities and other consist of the following:

 
  December 31,
2016
  December 31,
2015
 
 
  (in millions)
 

Programming costs

  $ 39.9   $ 38.8  

Construction

    17.4     9.9  

Payroll and employee benefits

    16.4     19.2  

Franchise, copyright and revenue sharing fees

    13.2     13.1  

Property, income, sales and use taxes

    8.1     17.6  

Utility pole rentals

    3.7     4.5  

Reduction in work force

    0.2     0.4  

Legal and professional fees

    0.5     0.7  

Other accrued liabilities

    10.4     10.3  

  $ 109.8   $ 114.5  

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

12. Long-Term Debt and Capital Lease Obligations

        The following table summarizes the Company's debt and capital lease obligations:

 
  December 31, 2016   December 31,
2015
 
 
  Available
borrowing
capacity
  Weighted
average
interest rate(3)
  Outstanding
balance
  Outstanding
balance
 
 
  (in millions)
 

Long-term debt:

                         

Term B Loans(1)

  $     4.56 % $ 2,048.3   $ 1,400.8  

Term B-1 Loans

                383.4  

Revolving Credit facility(2)

    182.7     4.03 %   10.0      

Senior Notes(4)

        10.25 %   830.9     833.5  

Senior Subordinated Notes, net of discounts

                292.5  

Total long-term debt

  $ 182.7     6.18 %   2,889.2     2,910.2  

Capital lease obligations

                4.9     7.4  

Total long-term debt and capital lease obligations

                2,894.1     2,917.6  

Debt issuance costs, net(5)

                (22.9 )   (35.4 )

Sub-total

                2,871.2     2,882.2  

Less current portion

                (22.7 )   (20.6 )

Long-term portion

              $ 2,848.5   $ 2,861.6  

(1)
At December 31, 2016, includes $11.5 million of net discounts.

(2)
Available borrowing capacity at December 31, 2016 represents $200.0 million of total availability less outstanding letters of credit of $7.3 million and $10.0 million in borrowings outstanding under the Revolving Credit Facility as of December 31, 2016. Letters of credit are used in the ordinary course of business and are released when the respective contractual obligations have been fulfilled by the Company.

(3)
Represents the weighted average effective interest rate in effect at December 31, 2016 for all borrowings outstanding pursuant to each debt instrument including the applicable margin.

(4)
At December 31, 2016, includes $5.9 million of net premium.

(5)
At December 31, 2016, debt issuance costs include $13.5 million related to Term B Loans, $7.4 million related to Senior Notes and $2.0 million related to our Revolving Credit Facility.

    Term B Loans Refinancing

        On August 19, 2016, the Company entered into a sixth amendment ("Sixth Amendment") to its Credit Agreement, dated as of July 17, 2012, as amended ("Credit Agreement") among the Company and the other parties thereto. Capitalized terms used herein without definition shall have the same meanings as set forth in the Credit Agreement.

        The Sixth Amendment, among other provisions, provides for the addition of a new $2.065 billion seven year Term B Loan which bears interest, at the Company's option, at LIBOR plus 3.50% or ABR

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

12. Long-Term Debt and Capital Lease Obligations (Continued)

plus 2.50% and includes a 1.00% LIBOR floor. The new Term B Loan has a maturity date of August 19, 2023, unless the earlier maturity dates set forth below are triggered under the following circumstances: The Term B Loan will mature on April 15, 2019 if (i) any of the Company's existing outstanding Senior Notes are outstanding on April 15, 2019, or (ii) any future indebtedness with a final maturity date prior to the date that is 91 days after August 19, 2023 is incurred to refinance the Company's existing Senior Notes. The Term B Loan will mature on July 15, 2019 if (i) any of the Company's existing Senior Subordinated Notes are outstanding on July 15, 2019, or (ii) any indebtedness with a final maturity prior to the date that is 91 days after August 19, 2023 is incurred to refinance the Company's existing Senior Subordinated Notes.

        Proceeds from the issuance of the new Term B Loans were used to repay in full the existing $1.825 billion Term B Loan, which had a maturity date of April 15, 2019 and which bore interest at the same rates described above. The Company used the remaining $240.0 million in proceeds to fund the Company's acquisition of NuLink and to redeem a portion of the Company's 13.38% Senior Subordinated Notes. The Company recorded a loss on extinguishment of debt of $10.5 million, primarily representing the expensing of third party arranger fees and the unamortized debt issuance costs related to a portion of the former Term B Loans.

    Senior Subordinated Notes pay down and retirement

        On July 15, 2016, the Company redeemed $46.9 million in principal amounts outstanding under its 13.38% Senior Subordinated Notes. In addition to the principal redemption, Company paid a call premium of $3.1 million and accrued interest on the notes of $19.7 million.

        On September 15, 2016, the Company redeemed an additional $159.1 million of outstanding principal of our 13.38% Senior Subordinated Notes. In addition to the principal redemption, the Company paid $10.7 million in call premium and $3.5 million in accrued interest.

        On December 18, 2016, the Company retired the 13.38% Senior Subordinated Notes early. The Company paid $89.0 million in outstanding principal, $5.0 million in accrued interest and $6.0 million in prepayment penalties. At December 31, 2016, the Company had no outstanding Senior Subordinated Notes.

    Refinancing of Term B Loans and payoff of Term B-1 Loans

        On May 11, 2016, the Company entered into a fifth amendment (the "Fifth Amendment") to its Credit Agreement, dated as of July 17, 2012, as amended on April 1, 2013, November 27, 2013, May 21, 2015 and July 1, 2015 (the "Original Credit Agreement") among the Company and the other parties thereto.

        The Fifth Amendment, among other provisions, provided for the addition of an incremental $432.5 million in new Term B Loans, having a maturity date in April 2019 and which bore interest, at the Company's option, at LIBOR plus 3.50% or ABR plus 2.50% and included a 1.00% LIBOR floor. Proceeds from the issuance of the new Term B Loans were used to repay all remaining $382.5 million outstanding principal under the Company's Term B-1 Loans which had a maturity date of July 2017 and which bore interest, at the Company's option, at LIBOR plus 3.00% or ABR plus 2.00% and which included a 0.75% LIBOR floor. The Company recorded a loss on extinguishment of debt of

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

12. Long-Term Debt and Capital Lease Obligations (Continued)

$2.5 million, primarily representing the expensing of the unamortized debt issuance costs related to a portion of the former Term B-1 Loans.

    Revolver Extension

        On July 1, 2015, the Company entered into a fourth amendment ("Fourth Amendment") to the Original Credit Agreement among the Company and the other parties thereto. On August 19, 2016, the Company entered into a sixth amendment (the "Sixth Amendment") to the Original Credit Agreement among the Company and the other parties thereto.

        Under the Original Credit Agreement, the Company had $200.0 million of borrowings available under its revolving credit facility (the "Revolver"), which was to mature on July 17, 2017. Under the Fourth Amendment and the Sixth Amendment, the maturity date for $180.0 million of the $200.0 million in available borrowings under the Revolver was extended until July 1, 2020, subject to the following: (a) on January 1, 2019, if any indebtedness incurred to refinance the term loans outstanding prior to the effectiveness of the Sixth Amendment is outstanding and has a maturity date prior to September 30, 2020, the Revolver will instead mature on January 1, 2019, and (b) on April 15, 2019, if (i) the Company has Senior Unsecured Notes outstanding or (ii) any indebtedness (other than indebtedness incurred under the Credit Agreement) incurred to refinance the Senior Unsecured Notes is outstanding and has a maturity date prior to November 28, 2023, the Revolver will instead mature on April 15, 2019.

        In addition, in the event the Company has outstanding borrowings under the Revolver in excess of $180.0 million as of July 17, 2017, the Company will be required to pay down such borrowings to the extent of such excess.

    Refinancing of Term B and B-1 Loans

        On May 21, 2015, the Company entered into a third amendment (the "Third Amendment") to its Credit Agreement, dated as of July 17, 2012, as amended on April 1, 2013 and as further amended on November 27, 2013 among the Company and the other parties thereto.

        The Third Amendment, among other provisions, provided for a refinancing of the Credit Agreement, resulting in $1,411.4 million in new Term B Loans, which bore interest, at the Company's option, at LIBOR plus 3.50% or ABR plus 2.50% and included a 1% LIBOR floor. The new Term B Loans replaced the $1,560.4 million in outstanding Term B Loans which were previously priced, at the Company's option, at LIBOR plus 3.75% or ABR plus 2.75%. The proceeds from the refinancing were used to pay outstanding principal under the Company's current Term B Loans. In connection with the Third Amendment, the Company made a prepayment totaling $150.0 million, applied ratably, to the Company's outstanding Term B Loans and outstanding Term B-1 Loans. Proceeds from the sale of the Company's South Dakota Systems were used in connection with the prepayment. In addition, the Third Amendment provided for the ability to refinance the Company's Senior Subordinated Notes with proceeds from the issuance of Senior Notes. The Company recorded a loss on extinguishment of debt of $22.9 million, primarily representing the expensing of the unamortized debt issuance costs related to a portion of the former Term B Loans.

        The obligations of the Company under the Credit Agreement are guaranteed by the Affiliates and its subsidiaries and are secured on a first priority basis by substantially all of the tangible and intangible

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

12. Long-Term Debt and Capital Lease Obligations (Continued)

assets of the Company and the guarantors, subject to certain exceptions. The Credit Amendment contains affirmative and negative covenants that the Company believes are usual and customary for a senior secured credit agreement. The negative covenants include, among other things, limitations on indebtedness, liens, sale of assets, investments, dividends, subordinated debt payments and amendments, sale leasebacks and transactions with the Company's affiliates. The Credit Amendment also requires the Company to comply with a maximum senior secured leverage ratio. The Company was in compliance with all covenants at December 31, 2016.

        On November 27, 2013, the Company entered into a second amendment (the "Second Amendment") to the Credit Agreement, dated as of July 17, 2012, as amended on April 1, 2013 (the "Credit Agreement") among the Company, the guarantors thereto, the lenders party thereto, and the other parties thereto.

        The Second Amendment provided for the refinancing of the Credit Agreement, resulting in $425.0 million in new Term B-1 Loans, which bore interest, at the Company's option, at LIBOR plus 3.00% or adjusted base rate ("ABR") plus 2.00%. The new Term B-1 Loans included a 0.75% LIBOR floor. The new Term B-1 Loans replaced $398.0 million in outstanding Term B-1 Loans which were previously priced, at the Company's option, at LIBOR plus 3.25% or ABR plus 2.25% and which previously included a 1.00% LIBOR floor. The Company utilized the excess proceeds from the new Term B-1 Loans to repay existing, outstanding borrowings on its revolving credit facility and to pay fees and expenses associated with the refinancing. The Company recorded a loss on extinguishment of debt of $0.8 million, primarily representing the expensing of debt issuance costs related to a portion of the former Term B-1 Loans.

    Additional 10.25% Senior Notes

        On April 1, 2014, the Company issued $100.0 million aggregate principal amount of additional 10.25% Senior Notes, due 2019, (the "Additional Notes") in a private offering conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). The Additional Notes were issued at 113.0% plus interest deemed to have accrued from January 15, 2014. The Company used the net proceeds of the offering to repay the borrowings outstanding under its revolving credit facility, for general corporate purposes, and to pay certain fees and expenses relating to the offering.

        The Additional Notes were issued under the indenture governing the Company's existing $725.0 million Senior Notes, due 2019, issued on July 17, 2012. The Additional Notes are treated as a single series with the existing Senior Notes and have the same terms as those of the Senior Notes. The Company agreed to file an exchange offer for the Additional Notes in a registration statement (the "Exchange Offer") with the SEC no later than 270 days from April 1, 2014. The Company filed the registration statement with the SEC on June 18, 2014 and the registration statement became effective on June 30, 2014. The Company completed the Exchange Offer on July 31, 2014.

    Long-Term Debt Extinguishment

        As noted above, the Company recorded a loss on extinguishment of debt of $38.0 million and of $22.9 million during the years ended December 31, 2016 and 2015, respectively. The loss on extinguishment of debt primarily represents the expensing of debt issuance costs and third party fees associated with the refinancing and extinguishment of debt.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

12. Long-Term Debt and Capital Lease Obligations (Continued)

        Amortization of debt issue costs and accretion of debt discount, which are both included in interest expense in the accompanying combined consolidated statements of operations, for the three years ended December 31, 2016, 2015 and 2014 are as follows (in millions):

 
  December 31,  
 
  2016   2015   2014  

Amortization of deferred financing fees

  $ 8.7   $ 14.3   $ 18.1  

Accretion of debt premium

    (2.5 )   (2.6 )   (2.0 )

Accretion of debt discount

    1.4     0.6     0.7  

        Maturities of long-term debt, excluding capital lease obligations, as of December 31, 2016 are as follows (in millions):

 
  Long-term
Debt
 

Year ended December 31, 2017

  $ 30.7  

Year ended December 31, 2018

    20.7  

Year ended December 31, 2019

    851.6  

Year ended December 31, 2020

    20.7  

Year ended December 31, 2021

    20.7  

Thereafter

    1,944.8  

  $ 2,889.2  

13. Operating and Capital Leases

        The Company leases office and warehouse space under both cancelable and non-cancelable operating leases. Rental expense under operating lease agreements during the years ended December 31, 2016, 2015 and 2014 was $8.3 million, $8.2 million and $7.6 million, respectively. The Company expects that in the normal course of business, operating leases that expire generally will be renewed or replaced by similar leases.

        At December 31, 2016 and 2015, the amount of property and equipment, net, recorded under capital leases was $4.9 million and $7.4 million, respectively (note 6). This amount primarily relates to certain video equipment and vehicles. Depreciation of assets under capital lease is included in depreciation and amortization in our combined consolidated statements of operations.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

13. Operating and Capital Leases (Continued)

        As of December 31, 2016, future capital and operating lease commitments are as follows (in millions):

 
  Capital
Leases
  Operating
Leases
 

Year ended December 31, 2017

  $ 2.2   $ 7.7  

Year ended December 31, 2018

    1.4     7.4  

Year ended December 31, 2019

    0.9     4.5  

Year ended December 31, 2020

    0.2     3.1  

Year ended December 31, 2021

    0.2     2.6  

Thereafter

        3.5  

Total minimum lease payments

  $ 4.9   $ 28.8  

Less imputed interest

    (0.3 )      

Present value of minimum capital lease payments

    4.6        

Less current portion

    (2.0 )      

Long-term capital lease obligations

  $ 2.6        

        The Company also rents utility poles used in its operations. Generally, pole rentals are cancellable on short notice, but the Company anticipates that such rentals will recur. Rent expense for pole rental attachments was $6.7 million, $8.0 million and $7.8 million for the years ended December 31, 2016, 2015 and 2014, respectively.

14. Reduction in Workforce

        On December 3, 2014, the Company committed to a workforce reduction plan whereby the Company eliminated approximately 275 employees across all levels and geographic regions. The company implemented this plan to compete more efficiently and better position itself for future growth. One-time termination costs, resulting from the reduction in work force totaled $6.4 million and have been recorded in selling, general and administrative expenses in the combined consolidated statement of operations for the year ended December 31, 2014.

15. Derivative Instruments

        The Company's outstanding Senior Secured Credit Facility balances bear interest at variable rates, which, if left unmanaged, could expose the Company to potentially adverse changes in interest rates. The Company has historically entered into various interest rate swaps and caps that effectively convert the variable interest rate component (excluding margin) to a fixed rate (excluding margin) on the required portion of the Company's outstanding debt. As of December 31, 2016, the interest rate swaps and the interest rate caps have expired.

16. Fair Value Measurements

        As of December 31, 2016 and 2015, the fair values of cash and cash equivalents, receivables, unearned revenue, prepaid and other, trade payables, accrued interest, accrued liabilities, short-term borrowings and the current installments of long-term debt approximate carrying values due to the

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

16. Fair Value Measurements (Continued)

short-term nature of these instruments. For assets and liabilities with a long-term nature, we determine fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. The Company applies the following hierarchy in determining fair value:

    Level 1, defined as observable inputs being quoted prices in active markets for identical assets;

    Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

    Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions based on the best information available.

        A summary of our liabilities measured at fair values that are included in our combined consolidated balance sheets are as follows (by respective level of fair value hierarchy):

 
  Fair Value at December 31, 2016  
 
  Total   Level 1   Level 2   Level 3  
 
  (in millions)
 

Liabilities:

                         

Derivative instruments(1)

  $   $   $   $  

  $   $   $   $  

 

 
  Fair Value at December 31, 2015  
 
  Total   Level 1   Level 2   Level 3  
 
  (in millions)
 

Liabilities:

                         

Derivative instruments(1)(2)

  $ 2.3   $   $ 2.3   $  

  $ 2.3   $   $ 2.3   $  

(1)
The fair value measurements of our interest rate swaps were determined using cash flow valuation models. The inputs to the cash flow models consist of, or are derived from, observable data for substantially the full term of the swaps. This observable data includes interest and swap rates, yield curves and credit ratings, which are retrieved from available market data. The valuations are then adjusted for the Company's own nonperformance risk as well as the counterparty's as required by the provisions of the authoritative guidance using a discounted cash flow technique that accounts for the duration of the interest rate swaps and the Company's as well as the counterparty's risk profile. Accordingly, the valuations of assets and liabilities related to the derivative instruments fall under Level 2 of the authoritative guidance fair value hierarchy.

(2)
The fair value of the interest rate caps were calculated using a cash flow valuation model. The main inputs were obtained from quoted market prices, the LIBOR interest rate and the projected three months LIBOR. The observable market quotes were then input into the valuation and discounted to reflect the time value of cash.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

16. Fair Value Measurements (Continued)

        Accordingly, the valuations of assets and liabilities related to the derivative instruments fall under Level 2 of the authoritative guidance fair value hierarchy. There were no transfers into or out of Level 1, 2 or 3 during the years ended December 31, 2016 and 2015.

        The estimated fair value of the Company's long-term debt (note 12) which includes debt subject to the effects of interest rate risk, was based on dealer quotes considering current market rates and was approximately $2,971.1 million, not including debt discount and premium, compared to carrying value of $2,894.8 million, not including debt discount and premium, as of December 31, 2016 and approximately $2,744.0 million, not including debt discount and premium, compared to a carrying value of $2,904.3 million, not including debt discount and premium, as of December 31, 2015.

        The sensitivity to changes in the unobservable inputs and their impact on the fair value measurement of long-term debt can be significant. The significant unobservable inputs for the senior notes are risk-free interest rates and credit spread assumptions. The risk-free interest rate is negatively correlated to the fair value measure. An increase (decrease) in risk-free interest rates will decrease (increase) the fair value measure. The credit spread is negatively correlated to the fair value measure. An increase (decrease) in the credit spread will decrease (increase) the fair value measure.

17. Income Taxes

        The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        As a result of the Restructuring, WOW! Finance became a single member LLC for federal income tax purposes. The Restructuring is treated as a change in tax status related to WOW! Finance, since a single member LLC is required to record current and deferred income taxes reflecting the results of its operations.

        The components of our deferred tax assets and deferred tax liabilities as of December 31, 2016 and December 31, 2015 are presented in the table below:

 
  2016   2015  

Non-current deferred income tax assets (liabilities):

             

Allowances and other reserves

  $ 11.0   $ 1.6  

Net operating loss carryforwards

    290.4     308.7  

Deferred revenue

    3.6     (0.4 )

Depreciation and amortization

    (181.9 )   (69.9 )

Franchise operating rights

    (352.7 )   (280.2 )

Investment marked to market

    5.2     3.2  

AMT credit

    5.3     1.3  

GAAP/Tax basis difference in investment in partnerships

        (103.9 )

Other

    13.2     1.0  

Valuation Allowance

    (164.3 )   (267.9 )

Total net deferred tax liabilities

  $ (370.2 ) $ (406.5 )

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

17. Income Taxes (Continued)

        The Company assesses the available positive and negative evidence to estimate whether sufficient taxable income will be generated to permit the utilization of existing deferred tax assets. On the basis of this evaluation, as of December 31, 2016, a valuation allowance of $164.3 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The valuation allowance is based on the Company's existing positive and negative evidence. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased based on the Company's future operating results.

        The income tax expense (benefit) from continuing operations consisted of the following for the years ended December 31, 2016, 2015 and 2014:

 
  2016   2015   2014  

Current tax expense

                   

Federal

  $ 0.5   $ 5.1   $ 6.2  

State

    8.5     0.4     0.4  

Total Current

    9.0     5.5     6.6  

Deferred tax provision (benefit)

                   

Federal

    (54.3 )   4.0     (15.7 )

State

    18.0     0.4     (1.7 )

Total Deferred

    (36.3 )   4.4     (17.4 )

Income tax expense (benefit), net

  $ (27.3 ) $ 9.9   $ (10.8 )

        A reconciliation of the income tax provision computed at statutory tax rates to the income tax provision for the years ended December 31, 2016, 2015 and 2014 are as follows:

 
  2016   2015   2014  

Statutory Federal income taxes

  $ (0.4 ) $ (13.6 ) $ (13.3 )

State income taxes

    0.9     7.1     1.7  

Sale of South Dakota Systems

            14.9  

Uncertain Tax Positions

    17.7          

Tax Status Change

    57.7          

Other

    0.4         (0.5 )

Change in valuation allowance

    (103.6 )   16.4     (13.6 )

Income tax expense (benefit), net

  $ (27.3 ) $ 9.9   $ (10.8 )

        The Company reported total income tax (benefit) expense of $(27.3) million, $9.9 million and ($10.8) million during the fiscal years ended December 31, 2016, 2015 and 2014, respectively. The change in tax status related to the Restructuring resulted in a deferred tax expense of $57.7 million during the fiscal year ended December 31, 2016. The $57.7 million consisted of $138.9 million in additional deferred tax liabilities that were required as a result of the change in tax status, $14.1 million in additional deferred tax liabilities that were recorded due to state income tax rate impacts and a deferred tax benefit of $95.3 million related to the removal of existing deferred tax liabilities attributable to the Company's investment in C corporation subsidiaries. In addition, as a result of the

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

17. Income Taxes (Continued)

Company's change in tax status, the Company recorded a deferred tax benefit of $103.6 million due to a reversal of a portion of its existing valuation allowance.

        The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. For federal tax purposes, the Company's 2013 through 2016 tax years remain open for examination by the tax authorities under the normal three year statute of limitations. Generally, for state tax purposes, the Company's 2013 through 2016 tax years remain open for examination by the tax authorities under a three year statute of limitations. Should the Company utilize any of its U.S. or state loss carryforwards, their carryforward losses, which date back to 1995, would be subject to examination.

        At December 31, 2016, the Company had available federal net operating loss carryforwards of approximately $833.8 million that expire between 2023 and 2036. Approximately $146.0 million of this net operating loss carryforward is subject to an annual utilization limitation under Internal Revenue Code ("IRC") Section 382 due to one or more changes in ownership of Knology, Inc. ("Knology") as of the date of the Company's acquisition of Knology in 2012. The Company has analyzed the potential Section 382 limitation on its net operating loss carryforwards and determined that, although $146.0 million of this carryforward relating to Knology is subject to an annual Section 382 limitation, based on the fair market value of Knology at the time of the Company's acquisition of Knology and Knology's net unrealized built-in gain ("NUBIG") position, the NUBIG has resulted in a significant increase in the Company's annual Section 382 limitation. The NUBIG is determined based on the difference between the fair market value of Knology's assets and Knology's tax basis as of the ownership change date. Because of the existence of the NUBIG, the annual limitation imposed by Section 382 was significantly increased each year during the five-year period beginning on the date of the Section 382 ownership change (the "recognition period"). The increased annual limitation arising from the NUBIG is available on a cumulative basis during and after the recognition period following the Section 382 ownership change to offset taxable income. Accordingly, the Company expects that the Section 382 limitation relating to the $146.0 million of available net operating loss carryforwards will not result in any significant impacts on the Company's ability to utilize its net operating loss carryforwards to offset future taxable income nor will have significant impact on future operating cash flows.

        The Company also had various state net operating loss carryforwards totaling approximately $646.4 million. Unless utilized, the state carryforwards expire from 2018 to 2036. Of this amount, approximately $166.3 million is subject to an annual limitation due to an ownership change of the Company, as previously noted.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

17. Income Taxes (Continued)

        The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:

 
  Year ended
December 31,
 
 
  2016   2015   2014  
 
  (in millions)
 

Unrecognized tax benefits—January 1st

  $ 0.5   $ 0.5   $ 0.5  

Gross increases—tax positions in prior period

    19.6          

Gross decreases—tax positions in prior period

             

Gross increases—tax positions in current period

    8.7          

Settlements

    (0.6 )        

Lapse of statute of limitations

             

Unrecognized tax benefits—December 31st

  $ 28.2   $ 0.5   $ 0.5  

        As of December 31, 2016, the Company recorded gross unrecognized tax benefits of $28.2 million, all of which, if recognized, would affect the Company's effective tax rate. Interest and penalties related to income tax liabilities, if incurred, are included in income tax expense in the combined consolidated statement of operations. The Company has accrued gross interest and penalties of $0.4 million. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues are addressed in the Company's tax audits in a manner not consistent with management's expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

        Unrecognized tax benefits consist primarily of tax positions related to issues associated with the acquisition of Knology and certain state income tax matters. Depending on the resolution with certain state taxing authorities that is expected to occur within the next twelve months, there could be an adjustment to the Company's unrecognized tax benefits.

        The Company is not currently under examination for U.S. federal income tax purposes, but does have various open tax controversy matters with various state taxing authorities.

18. Stockholder's Deficit and Employee Units

        On December 18, 2015, Parent consummated the transactions contemplated by the Crestview Purchase Agreement, including amending and restating the operating agreement of Parent and the sale of approximately 35% in the aggregate of Parent Units and Management Incentive Units ("Class C Units") to Crestview. The Fifth Amended and Restated Operating Agreement provides that (a) each Class C, Class C-1, Class C-2, Class C-3, Class C-4, Class C-5, Class C-6, Class C-7 and Class C-8 common unit that was purchased by Crestview was converted into a certain number of Parent's units based on a conversion ratio set forth in the Fifth A&R Operating Agreement, (b) each vested Class C, Class C-1, Class C-2, Class C-3, Class C-4, Class C-5, Class C-6, Class C-7 and Class C-8 common unit not purchased by Crestview was converted into a certain number of Parent's Class B common units based on a conversion ratio set forth in the Fifth A&R Operating Agreement and (c) each unvested Class C, Class C-1, Class C-2, Class C-3, Class C-4, Class C-5, Class C-6, Class C-7 and Class C-8 common unit was automatically cancelled and forfeited.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

18. Stockholder's Deficit and Employee Units (Continued)

        As of December 31, 2016, the Company had 1,000 authorized shares of WOW! common stock issued and outstanding and 295,667 Class D Units authorized for issuance with 201,696 Class D Units outstanding.

        During the year ended December 31, 2014, the Company offered to buy back vested Class C Series units from former employees of the Company. The former employees had the option to sell their units at a price set by the Company. The Company repurchased 19,694 of such units.

    Profit Interest Plan

        On February 3, 2016, the Parent adopted a new Profit Interest Plan (the "2016 Profit Interest Plan") pursuant to which the Board of Parent may grant 295,667 Management Incentive Units ("Incentive Units"), or approximately 8% of the total outstanding units of Parent, excluding Incentive Units, to employees, managers, officers, directors, and consultants of the Company or any of its subsidiaries. In general, if Incentive Units under the 2016 Profit Interest Plan for any reason are cancelled, forfeited, expired or terminated, such Incentive Units will be available for the further grant of awards under the 2016 Profit Interest Plan.

        Incentive Units granted under the 2016 Profit Interests Plan are intended to constitute a "profits interest" in the Parent for tax purposes. Generally, these Incentive Units are subject to a combination of time, performance, and market-based vesting conditions. Upon vesting, the award recipient receives a Class D unit in the Parent. Such Class D units represent a right to a fractional portion of the profits and distributions of Parent in excess of a "floor amount" determined in accordance with the Operating Agreement. The Class D units are in a secondary position to the other outstanding classes of units in the Parent, in that in any event in which the equity is valued and paid out, holders of the Class D units are only paid if an amount at least equal to the applicable floor amount is first allocated to all of the outstanding classes of units under the Operating Agreement.

        Additionally, on July 18, 2016, the Company adopted a Director Appreciation Rights Plan ("2016 Director Plan"), in which 10% of the aggregate value of the 2016 Profit Interest Plan has been reserved for the 2016 Director Plan. The participants of the 2016 Director Plan are granted non-voting Bonus Units which vest ratably, 25% each anniversary date from grant date and fully vest four years from grant date. At no time will the participants own any Units of the Company but will have rights to participate in the Bonus Pool upon a Liquidity event based on vesting. The Bonus Pool shall be determined by the Administrator of the Plan at each Liquidity Event. Upon a Participant's termination of employment all vested and unvested Bonus Units are forfeited.

    2016 Executive Officer Grants

        On May 31, 2016, the Board of Parent granted 195,997 Incentive Units to various executive officers and members of the Board of Parent and its subsidiaries. Grants to Executive Officers will occur going forward as new members of the executive team are hired, promoted or if the management get authorization from the Board to issue more units.

        The 97,998 of Incentive Units granted (the "Time Vesting Units") vest ratably at 25% per year beginning on December 18, 2016 and assuming the award recipient continues to be employed by the Parent or its subsidiaries. Vesting of the Time Vesting Units shall be accelerated upon a Liquidity Event as defined in the respective grant agreements, subject to achieving certain performance targets.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

18. Stockholder's Deficit and Employee Units (Continued)

The aggregate grant date fair value of the Time Vesting Units was $6.3 million, which will be recognized over the requisite service period of approximately four years.

        The remaining 97,999 of the Incentive Units granted (the "Performance Vesting Units") vest upon the occurrence of a Liquidity Event as defined in the respective grant agreements, subject to achieving certain performance targets upon the Liquidity Event. The aggregate grant date fair value of the Performance Vesting Units granted was $4.3 million, which will be recognized upon the occurrence of said Liquidity Event.

        The Company granted an additional 19,524 Incentive Units for newly hired executive officers or employees that were promoted to the executive level after the May 13, 2016 grant. Of these Incentive Units granted 9,762 were Time Vesting Units and 9,762 were Performance Vesting Units.

        The Company used a market approach which derives value form a recent transaction which involved the Company's equity. Based on this market approach the Company used an option pricing method ("OPM") due to the complexity of its capital structure. The OPM back solve was then constructed, where the total equity value is a dependent variable that is necessary to reconcile to the recent transaction event that included equity. Based on this methodology the Company determined that the grant date fair value of the Time Vesting Units was $77.10 per unit and $83.72 per units for the May grants and October grants, respectively. These values were utilized for purposes of compensation expense. The grant date fair value of the Performance Vesting Units, due to the speculative nature of the vesting conditions, are not included in the Company's compensation expense, rather the Company expects to record such expense when, as, and if such Performance Vesting Units vest.

        The Company recognized $1.1 million of non-cash compensation expense during the year ended December 31, 2016. Non-cash compensation expense for the years ended December 31, 2015 and 2014 was not material. Non-cash compensation is reflected in selling, general and administrative expenses in the Company's combined consolidated statements of operations. This expense represents the Time Vesting Units over the requisite service period. As of December 31, 2016, total unrecognized compensation expense related to outstanding Incentive Units is $5.8 million and is expected to be recognized over a weighted-average period of 3.4 years.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

18. Stockholder's Deficit and Employee Units (Continued)

        The following table summarizes the activity in the Management Units during the three years ended December 31, 2016:

 
  Class C No
Floor
Amount
  Class C-1
$112.19
Floor
Amount
  Class C-2
$113.32
Floor
Amount
  Class C-3
$208.88
Floor
Amount
  Class C-4
$342.00
Floor
Amount
  Class C-5
$342.00
Floor
Amount
  Class C-6
$373.41
Floor
Amount
  Class C-7
$374.68
Floor
Amount
  Class C-8
$374.68
Floor
Amount
  Class D
Units
  Total  
 
   
   
  Number of Management Units
 

Outstanding at January 1, 2014

    151,077     37,235     17,180     7,480     31,795     20,600     18,655     119,320             403,342  

Granted

                                18,013     25,000         43,013  

Repurchased

    (6,885 )   (10,145 )   (835 )   (60 )   (340 )       (405 )   (1,024 )           (19,694 )

Forfeited

                    (186 )       (110 )   (16,222 )           (16,518 )

Outstanding at December 31, 2014

    144,192     27,090     16,345     7,420     31,269     20,600     18,140     120,087     25,000         410,143  

Granted

                            600         17,775         18,375  

Repurchased

    (1,290 )   (1,220 )   (975 )   (580 )   (152 )       (135 )   (3,462 )   (200 )       (8,014 )

Forfeited unvested

            (410 )   (405 )   (2,535 )       (3,652 )   (23,357 )   (750 )       (31,109 )

Sold pursuant to Crestview Purchase Agreement

    (35,288 )   (6,309 )   (3,598 )   (1,449 )   (4,958 )   (4,450 )   (1,817 )   (7,298 )   (824 )       (65,991 )

Convert to B Units

    (107,614 )   (19,386 )   (10,892 )   (4,796 )   (16,243 )   (13,351 )   (6,426 )   (27,589 )   (3,021 )       (209,318 )

Cancelled unvested

        (175 )   (470 )   (190 )   (7,381 )   (2,799 )   (6,710 )   (58,381 )   (37,980 )       (114,086 )

Outstanding at December 31, 2015

                                             

Granted

                                        215,521     215,521  

Forfeited unvested

                                        (13,825 )   (13,825 )

Outstanding at December 31, 2016

                                        201,696     201,696  

Vested at December 31, 2016

                                        23,726     23,726  

Unvested at December 31, 2016

                                        177,970     177,970  

Total

                                        201,696     201,696  

(1)
In connection with the Crestview Purchase Agreement and the adoption of the Fifth A&R LLC Agreement, (a) each Class C, Class C-1, Class C-2, Class C-3, Class C-4, Class C-5, Class C-6, Class C-7 and Class C-8 common unit that was purchased by Crestview was converted into a certain number of Parent's Class A common units based on a conversion ratio set forth in the Fifth A&R Operating Agreement, (b) each vested Class C, Class C-1, Class C-2, Class C-3, Class C-4, Class C-5, Class C-6, Class C-7 and Class C-8 common unit not purchased by Crestview was converted into a certain number of Parent's Class B common units based on a conversion ratio set forth in the Fifth A&R Operating Agreement and (c) each unvested Class C, Class C-1, Class C-2, Class C-3, Class C-4, Class C-5, Class C-6, Class C-7 and Class C-8 common unit was automatically cancelled and forfeited.

19. Employee Benefits

    401(k) Savings Plan

        The Company has adopted a defined contribution retirement plan which complies with Section 401(k) of the Internal Revenue Code. Substantially all employees are eligible to participate in the plan. The Company matches 25% of each participant's voluntary contributions subject to a limit of the first 4% of the participant's compensation. Company matching contributions vest 25% annually over a four-year period. During the years ended December 31, 2016, 2015 and 2014, the Company recorded $0.4 million, $0.8 million and $0.9 million, respectively, of expense related to the Company's matching contributions to the 401(k) plan.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

19. Employee Benefits (Continued)

    Deferred Compensation Plan

        In July 2007, the Company implemented a deferred compensation plan. Under this plan, certain members of management and other highly compensated employees may elect to defer a portion of their annual compensation, subject to certain percentage limitations. The assets and liabilities of the plan are consolidated within the Company's financial statements. The assets of the plan are specifically designated as available to the Company solely for the purpose of paying benefits under the Company's deferred compensation plan. However, in the event the Company became insolvent, the investments would be available to all unsecured general creditors. The deferred compensation liability relates to obligations due to participants under the plan.

        The assets from the participant deferrals are invested by the Company, through a life insurance investment vehicle, in mutual funds and money market funds. The deferred compensation liability represents accumulated net participant deferrals and earnings thereon based on participant investment elections. The assets and liabilities are recorded at fair value, and any adjustments to the fair value are recorded in the combined consolidated statements of operations. The assets and liabilities of the plan are included in the accompanying combined consolidated balance sheets as follows:

 
  December 31,  
 
  2016   2015  
 
  (in millions)
 

Prepaid expenses and other (current assets)

  $ 1.8   $ 2.8  

Accrued liabilities and other (current liabilities)

  $ 1.8   $ 2.8  

20. Commitments and Contingencies

    Programming Contracts

        In the normal course of business, the Company enters into numerous contracts to purchase programming content for which the payment obligations are fully contingent on the number of subscribers to whom it provides the content. The terms of the contracts typically have annual rate increases and expire through 2018. The Company's programming expenses will continue to increase, more so to the extent the Company grows its Video subscriber base. Programming expenses are included in operating expenses in the accompanying combined consolidated statements of operations.

    Legal and Other Contingencies

        The Company is party to various legal proceedings (including individual, class and putative class actions) arising in the normal course of its business covering a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, programming, taxes, fees and surcharges, consumer protection, trademark and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers.

        In accordance with GAAP, the Company accrues an expense for pending litigation when it determines that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Legal defense costs are expensed as incurred. The Company is monitoring its pending litigation for the purpose of adjusting its accruals and revising its disclosures accordingly, in accordance with GAAP, when required. Litigation is, however, subject to uncertainty, and the outcome of any

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Consolidated Financial Statements (Continued)

20. Commitments and Contingencies (Continued)

particular matter is not predictable. The Company will vigorously defend its interest for pending litigation, and as of this date, the Company believes that the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which it is entitled, will not have a material adverse effect on the combined consolidated financial position, results of operations, or our cash flows.

21. Related Party Transactions

        The Company pays a quarterly management fee plus travel and miscellaneous expenses, if any, to Avista and Crestview. Such management fee is $0.4 million per quarter. The management fees and expenses paid by the Company for the years ended December 31, 2016, 2015 and 2014 amounted to $1.7 million, $1.9 million and $1.7 million, respectively.

        During the year ended December 31, 2016, the Company made distributions to its Parent in the amount of $2.2 million, for payments on behalf of its Parent, for costs incurred for the Crestview Purchase Agreement. On December 18, 2015, Crestview and Parent consummated a transaction whereby Crestview Partners III GP, L.P. became the beneficial owner of approximately 35% of Parent.

        On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in Parent.

        As of December 31, 2016, $123.0 million of proceeds from these transactions have been contributed to the Company while the remaining $20.1 million, net of accrued and paid transaction expenses, have been recorded to Parent's balance sheet and have not been pushed down or reflected in our combined consolidated financial statements.

22. Subsequent Events

    Partial Redemption of 10.25% Senior Notes

        On March 20, 2017, the Company redeemed $95.1 million of outstanding principal of our 10.25% Senior Notes. In addition to the principal redemption, we paid accrued interest of $1.7 million and prepayment penalties of $4.9 million. The Company has $729.9 million in principal outstanding after this redemption.

    Sale of Lawrence, Kansas System

        On January 12, 2017, the Company and MidCo consummated (the "Asset Purchase Agreement") under which MidCo acquired the Company's Lawrence, Kansas system for gross proceeds of approximately $215.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. The Company and MidCo also entered into a transition services agreement under which the Company will provide certain services to MidCo on a transitional basis. Charges for the transition services generally allow the Company to fully recover all allowed costs and allocated expenses incurred in connection with providing these services, generally without profit.

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Combined Condensed Consolidated Balance Sheets

(unaudited)

 
  March 31,
2017
  December 31,
2016
 
 
  (in millions)
 

Assets

             

Current assets:

             

Cash and cash equivalents

  $ 86.5   $ 30.8  

Accounts receivable—trade, net of allowance for doubtful accounts of $5.0 and $9.4, respectively

    72.1     87.2  

Accounts receivable—other

    0.9     0.2  

Prepaid expenses and other

    14.1     11.3  

Total current assets

    173.6     129.5  

Plant, property and equipment, net (note 3)

    990.0     995.1  

Franchise operating rights

    966.5     1,066.6  

Goodwill

    517.5     568.0  

Intangible assets subject to amortization, net

    7.0     7.6  

Investments

        0.9  

Other noncurrent assets

    7.0     3.1  

Total assets

  $ 2,661.6   $ 2,770.8  

Liabilities and Stockholder's Deficit

             

Current liabilities:

             

Accounts payable—trade

  $ 23.2   $ 21.0  

Accrued interest

    24.1     47.3  

Accrued liabilities and other (note 5)

    92.1     109.8  

Current portion of debt and capital lease obligations (note 6)

    22.3     22.7  

Current portion of unearned service revenue

    45.6     50.2  

Total current liabilities

    207.3     251.0  

Long-term debt and capital lease obligations—less current portion and debt issuance costs (note 6)

    2,739.2     2,848.5  

Deferred income taxes, net (note 9)

    337.6     370.2  

Unearned service revenue

    14.7     14.5  

Other noncurrent liabilities

    8.0     4.6  

Total liabilities

    3,306.8     3,488.8  

Commitments and contingencies (note 10)

             

Common stock, $0.01 par value, 1,000 issued and outstanding

         

Stockholder's deficit

    (57.7 )   (58.1 )

Accumulated deficit

    (587.5 )   (659.9 )

Total stockholder's deficit

    (645.2 )   (718.0 )

Total liabilities and stockholder's deficit

  $ 2,661.6   $ 2,770.8  

   

The accompanying notes are an integral part of these combined condensed
consolidated financial statements.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Combined Condensed Consolidated Statements of Operations

(unaudited)

 
  Three months
ended
March 31,
 
 
  2017   2016  
 
  (in millions)
 

Revenue

  $ 300.0   $ 302.3  

Costs and expenses:

             

Operating (excluding depreciation and amortization)

    159.8     164.5  

Selling, general and administrative

    30.3     26.0  

Depreciation and amortization

    50.3     52.5  

Management fee to related party (note 11)

    0.5     0.4  

    240.9     243.4  

Income from operations

    59.1     58.9  

Other income (expense):

             

Interest expense

    (45.7 )   (54.2 )

Loss on early extinguishment of debt (note 6)

    (5.0 )    

Gain on sale of assets (note 4)

    38.7      

Realized and unrealized gain on derivative instruments

        1.1  

Other income, net

    1.4      

Income before provision for income taxes

    48.5     5.8  

Income tax benefit (expense) (note 9)

    23.9     (1.5 )

Net income

  $ 72.4   $ 4.3  

   

The accompanying notes are an integral part of these combined condensed
consolidated financial statements.

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Combined Condensed Consolidated Statement of Changes in Stockholder's Deficit

for the three months ended March 31, 2017

(unaudited)

 
  Common Stock/ Units    
   
   
 
 
  Common
Stock
  Common
Stock
Affiliate
Corporations
  Management
Units
Class C
  Management
Units
Class D
  Stockholder's
Deficit
  Accumulated
Deficit
  Total
Stockholder's
Deficit
 
 
  (in millions, except Stock and Unit amounts)
 

Balances at December 31, 2016

    1,000             201,696   $ (58.1 ) $ (659.9 ) $ (718.0 )

Contribution from Parent

                    8.8         8.8  

Repurchase management units

                      (8.8 )       (8.8 )

Distribution to Parent

                    (0.1 )       (0.1 )

Non-cash compensation expense

                    0.5         0.5  

Other

                             

Net income

                        72.4     72.4  

Balances at March 31, 2017

    1,000             201,696   $ (57.7 ) $ (587.5 ) $ (645.2 )

   

The accompanying notes are an integral part of these combined condensed
consolidated financial statements.

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Combined Condensed Consolidated Statements of Cash Flows

(unaudited)

 
  Three months
ended March 31,
 
 
  2017   2016  
 
  (in millions)
 

Cash flows from operating activities:

             

Net income

  $ 72.4   $ 4.3  

Adjustments to reconcile net income to net cash provided by operating activities:

             

Depreciation and amortization

    50.3     52.5  

Realized and unrealized gain on derivative instruments

        (1.1 )

Provision for doubtful accounts

    4.2     4.6  

Deferred income taxes

    (32.6 )   1.3  

Gain on asset sale (note 4)

    (38.7 )    

Amortization of debt issuance costs, premium and discount, net

    1.2     2.4  

Non-cash compensation expense

    0.5      

Loss on early extinguishment of debt

    0.2      

Other non-cash items

    0.3      

Changes in operating assets and liabilities:

             

Receivables and other operating assets

    0.7     (2.1 )

Payables and accruals

    (27.7 )   (35.7 )

Net cash flows provided by operating activities

    30.8     26.2  

Cash flows from investing activities:

             

Capital expenditures

    (79.2 )   (63.6 )

Proceeds from asset sale (note 4)

    213.0      

Other investing activities

    2.0     0.1  

Net cash flows provided by (used in) investing activities

    135.8     (63.5 )

Cash flows from financing activities :

             

Payments on debt and capital lease obligations

    (110.8 )   (5.4 )

Contribution from Parent

    8.8     25.0  

Repurchase of management units

    (8.8 )    

Distribution to Parent

    (0.1 )    

Net cash flows (used in) provided by financing activities

    (110.9 )   19.6  

Increase (decrease) in cash and cash equivalents

    55.7     (17.7 )

Cash and cash equivalents, beginning of period

    30.8     66.6  

Cash and cash equivalents, end of period

  $ 86.5   $ 48.9  

Supplemental disclosures of cash flow information:

             

Cash paid during the periods for interest

  $ 65.9   $ 83.3  

Cash paid during the periods for income taxes

  $ 1.2   $  

Non-cash financing activities:

             

Changes in non-cash capital expenditure accruals

  $ (12.7 ) $ (3.0 )

   

The accompanying notes are an integral part of these combined condensed
consolidated financial statements.

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements

March 31, 2017

(unaudited)

Note 1. General Information

        WideOpenWest, Inc. ("WOW!" or the "Company") was organized in Delaware in July 2012 as WideOpenWest Kite, Inc. WideOpenWest Kite Inc. subsequently changed its name to WideOpenWest, Inc. in March 2017. WOW! is wholly owned by Racecar Acquisition, LLC ("Racecar Acquisition"), which is a wholly owned subsidiary of WideOpenWest Holdings, LLC (the "Parent"). In the following context, the terms we, us, WOW!, or the Company may refer, as the context requires, to WOW! or, collectively, WOW! and its subsidiaries.

        The Company is a fully integrated provider of high-speed data ("HSD"), cable television ("Video"), and digital telephony ("Telephony") services. The Company serves customers in nineteen Midwestern and Southeastern markets in the United States. The Company manages and operates its Midwestern broadband cable systems in Detroit and Lansing, Michigan; Chicago, Illinois; Cleveland and Columbus, Ohio; Evansville, Indiana; and Baltimore, Maryland. The Southeastern systems are located in Augusta, Columbus, Newnan and West Point, Georgia; Charleston, South Carolina; Dothan, Auburn, Huntsville and Montgomery, Alabama; Knoxville, Tennessee; and Panama City and Pinellas County, Florida.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

        Prior to the restructuring, the Members were all under common control. The financial statements presented herein include the consolidated accounts of WOW! and its subsidiaries and the combined accounts of its Affiliates. All significant intercompany accounts and transactions have been eliminated in consolidation and combination. As a result, the unaudited combined condensed consolidated financial statements of WOW! reflect all transactions of the wholly owned subsidiaries of Parent and Racecar Acquisition.

        Certain employees of WOW! participate in equity plans administered by Parent. Because the management units from the equity plan are issued from Parent's ownership structure, the management units' value directly correlates to the results of WOW!, as the primary asset of Parent is its investment in WOW!. The management units for the equity plan have been "pushed down" to the Company, as the management units have been utilized as equity-based compensation for WOW! management. All of the management units discussed herein are legally Parent's.

        The unaudited combined condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information required by GAAP or Securities and Exchange Commission ("SEC") rules and regulations for complete financial statements. The year-end condensed consolidated balance sheet was derived from audited financial statements. In the opinion of management, all normally recurring adjustments considered necessary for the fair presentation of the financial statements have been included, and the financial statements present fairly the financial position and results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results expected for the full year or any future period.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 2. Summary of Significant Accounting Policies (Continued)

Use of Estimates

        The accompanying unaudited combined condensed consolidated financial statements have been prepared in accordance with GAAP. These accounting principles require management to make assumptions and estimates that affect the reported amounts and disclosures of assets and liabilities, derivative financial instruments and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts and disclosures of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, due to the inherent uncertainties in making estimates, actual results could differ from those estimates.

Recently Issued Accounting Standards

        In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-04 , Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates the requirement to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under the amendments in the new ASU, goodwill impairment testing will be performed by comparing the fair value of the reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The new standard is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for annual or interim goodwill impairment testing performed after January 1, 2017. The Company is currently evaluating the impact of adopting this guidance.

        In August 2016, the FASB issued ASU No. 2016-15 to Topic 230 ("ASU 2016-15"), Statement of Cash Flows , making changes to the classification of certain cash receipts and cash payments in order to reduce diversity in presentation. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The update addresses eight specific cash flow issues, of which only one is applicable to the condensed consolidated financial statements. The Company does not believe that the adoption of this pronouncement will have a material impact on its combined condensed consolidated financial position, results of operations and cash flows.

        In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company will adopt this guidance beginning with its first quarter ending March 31, 2019. The Company is in the process of evaluating the future

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 2. Summary of Significant Accounting Policies (Continued)

impact of ASU 2016-02 on its combined condensed consolidated financial position, results of operations and cash flows.

        In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" (ASU 2014-09"). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of the guidance in Accounting Standards Codification Topic 606 ("ASC 606") is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity is required to follow five steps which are comprised of (a) identifying the contract(s) with a customer; (b) identifying the performance obligations in the contract; (c) determining the transaction price; (d) allocating the transaction price to the performance obligations in the contract and (e) recognizing revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year until January 1, 2018.

        The Company has completed a comprehensive analysis of its revenue streams and contractual arrangements to identify the effects of ASC 606 and is in the process of finalizing new accounting and reporting policies, processes, and internal controls related to the adoption of the new revenue recognition standard. Under current accounting policies, the Company recognizes revenue related to installation activities upfront to the extent of direct selling costs, which generally results in recognition of revenue when the installation related activities have been provided to the customer. Under the new revenue recognition standard, the majority of the Company's installation related activities are not considered to be separate performance obligations and non-refundable upfront fees related to installations must be assessed to determine whether they provide the customer with a material right. As a result of the Company's analysis performed, the Company expects to recognize installation revenue (i) for month-to-month service contracts over the period which the customer is expected to benefit from the ability to avoid paying an additional fee upon renewal and (ii) for fixed term service contracts (e.g., 12 months to 24 months) ratably over the term of the contract. In addition, the Company will be required to capitalize costs associated with obtaining contracts with customers, including sales commissions, and will amortize the costs over the expected life of the customer. The Company's installation revenue and sales commission expense represent approximately 2% of total revenue and expense, respectively, and any changes resulting from adoption of the new pronouncement are not expected to have a material impact to the combined condensed consolidated financial statements. The Company is continuing to review and evaluate other matters which are similarly expected not to have a material impact.

        ASU 2014-09 may be adopted by applying the provisions of the new standard on a retrospective basis to the periods included in the financial statements or on a modified retrospective basis which would result in the recognition of a cumulative effect of adopting ASU 2014-09 in the first quarter of 2018. The Company has not yet decided which implementation method it will adopt.

        In March 2016, the FASB issued ASU 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) ("ASU 2016-08"), which amends the principal-versus-agent implementation

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 2. Summary of Significant Accounting Policies (Continued)

guidance and illustrations in ASC Topic 606. The FASB issued ASU 2016-08 in response to concerns identified by stakeholders, including those related to determining the appropriate unit of account under the revenue standard's principal-versus-agent guidance and applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard's control principle. ASU 2016-08 has the same effective date as ASU 2014-09 and requires adopting ASU 2016-08 by using the same transition method used to adopt ASU 2014-09. The Company does not believe adoption of the pronouncement this will have a material impact on the Company's combined condensed consolidated results of operation, financial condition or cash flows.

    Recently Adopted Accounting Pronouncements

        In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09") which is intended to simplify certain aspects of the accounting for share-based payments to employees. The guidance in ASU 2016-09 requires all income tax effects of awards to be recognized in the statement of operations when the awards vest or are settled rather than recording excess tax benefits or deficiencies in additional paid-in capital. The guidance in ASU 2016-09 also allows an employer to repurchase more of an employee's shares than it could under prior guidance for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. For public companies, ASU 2016-09 is effective for interim and annual periods beginning after December 15, 2016, and requires a modified retrospective approach to adoption. Early adoption is permitted. The adoption of this pronouncement did not have a material impact on the Company's combined condensed consolidated financial position, results of operations and cash flows.

        In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2015-17"), which requires that all deferred tax liabilities and assets be classified as noncurrent amounts on the balance sheet. ASU 2015-17 will be effective for interim and annual periods beginning after December 15, 2016 and may be applied prospectively or retrospectively. Early adoption of the standard is permitted. The Company early adopted this standard during the first quarter of 2016 and has applied prospective treatment. The adoption of this pronouncement did not have a material impact on the Company's combined condensed consolidated financial position, results of operations and cash flows.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 3. Plant, Property and Equipment

        Plant, property and equipment consisted of the following:

 
  March 31,
2017
  December 31,
2016
 
 
  (in millions)
 

Distribution facilities

  $ 1,412.8   $ 1,336.4  

Customer premise equipment

    370.8     376.9  

Head-end equipment

    296.6     299.9  

Telephony infrastructure

    123.7     123.8  

Computer equipment and software

    96.2     95.4  

Vehicles

    31.5     32.1  

Buildings and leasehold improvements

    43.2     44.9  

Office and technical equipment

    31.8     36.2  

Land

    6.2     6.7  

Construction in progress (including material inventory and other)

    59.3     110.5  

Total plant, property and equipment

    2,472.1     2,462.8  

Less accumulated depreciation

    (1,482.1 )   (1,467.7 )

  $ 990.0   $ 995.1  

        Depreciation expense for the three months ended March 31, 2017 and 2016 was $49.7 million and $46.7 million, respectively. Included in depreciation expense were gains on sales of plant, property and equipment totaling $0.3 million and $0.2 million for the three months ended March 31, 2017 and 2016, respectively.

Note 4. Sale of Lawrence, Kansas System

        On January 12, 2017, the Company and Midcontinent Communications ("MidCo") consummated the Asset Purchase Agreement under which MidCo acquired the Company's Lawrence, Kansas system for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. As a result of this Asset Purchase Agreement, the Company recorded a gain on sale of $38.7 million, subject to certain normal and customary purchase price adjustments set forth in the agreement. The Company and MidCo also entered into a transition services agreement under which the Company will provide certain services to MidCo on a transitional basis. Charges for the transition services generally allow the Company to fully recover all allowed costs and allocated expenses incurred in connection with providing these services, generally without profit.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 5. Accrued Liabilities and Other

        Accrued liabilities and other consist of the following:

 
  March 31,
2017
  December 31,
2016
 
 
  (in millions)
 

Programming costs

  $ 39.6   $ 39.9  

Franchise, copyright and revenue sharing fees

    11.3     13.2  

Payroll and employee benefits

    7.6     16.4  

Construction

    2.7     17.4  

Property, income, sales and use taxes

    12.6     8.1  

Utility pole rentals

    3.9     3.7  

Legal and professional fees

    1.1     0.5  

Other accrued liabilities

    13.3     10.6  

  $ 92.1   $ 109.8  

Note 6. Long-Term Debt and Capital Leases

        The following table summarizes the Company's long-term debt and capital leases:

 
  March 31, 2017   December 31,
2016
 
 
  Available
borrowing
capacity
  Weighted
average
interest rate(1)
  Outstanding
balance
  Outstanding
balance
 
 
  (in millions)
 

Long-term debt:

                         

Term B Loans (2)

  $     4.55 % $ 2,043.6   $ 2,048.3  

Revolving Credit Facility (3)

    192.5     3.75 %       10.0  

Senior Notes (4)

        10.25 %   734.6     830.9  

Total long-term debt

  $ 192.5     6.14 %   2,778.2     2,889.2  

Capital lease obligations

                4.0     4.9  

Total long-term debt and capital lease obligations

                2,782.2     2,894.1  

Less debt issuance costs, net (5)

                (20.7 )   (22.9 )

Sub-total

                2,761.5     2,871.2  

Less current portion

                (22.3 )   (22.7 )

Long-term portion

              $ 2,739.2   $ 2,848.5  

(1)
Represents the weighted average effective interest rate in effect at March 31, 2017 for all borrowings outstanding pursuant to each debt instrument including the applicable margin.

(2)
At March 31, 2017, includes $11.1 million of net discounts.

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 6. Long-Term Debt and Capital Leases (Continued)

(3)
Available borrowing capacity at March 31, 2017 represents $200.0 million of total availability less outstanding letters of credit of $7.5 million. Letters of credit are used in the ordinary course of business and are released when the respective contractual obligations have been fulfilled by the Company.

(4)
At March 31, 2017, includes $4.7 million of net premium.

(5)
At March 31, 2017, debt issuance costs include $13.0 million related to Term B Loans, $5.9 million related to Senior Notes and $1.8 million related Revolving Credit facility.

Partial Redemption of 10.25% Senior Notes

        On March 20, 2017, the Company utilized cash on hand to redeem $95.1 million of outstanding principal of our 10.25% Senior Notes. In addition to the partial principal redemption, the Company paid accrued interest on the 10.25% Senior Notes of $1.7 million and a call premium of $4.9 million. The Company recorded a loss on early extinguishment of debt of $5.0 million, primarily representing the cash call premium paid.

Retirement of 13.38% Senior Subordinated Notes

        During the years ended December 31, 2016 and 2015, the Company made three redemption payments to early retire its 13.38% Senior Subordinated Notes. The final redemption payment was made on December 18, 2016.

Term B Loans Refinancing

        On August 19, 2016, the Company entered into a sixth amendment ("Sixth Amendment") to its Credit Agreement, dated as of July 17, 2012, as amended ("Credit Agreement") among the Company and the other parties thereto. Capitalized terms used herein without definition shall have the same meanings as set forth in the Credit Agreement.

        The Sixth Amendment, among other provisions, provides for the addition of a new $2.065 billion seven year Term B Loan which bears interest, at the Company's option, at LIBOR plus 3.50% or ABR plus 2.50% and includes a 1.00% LIBOR floor. The new Term B Loan has a maturity date of August 19, 2023, unless the earlier maturity dates set forth below are triggered under the following circumstances: The Term B Loan will mature on April 15, 2019 if (i) any of the Company's existing outstanding Senior Notes are outstanding on April 15, 2019, or (ii) any future indebtedness with a final maturity date prior to the date that is 91 days after August 19, 2023 is incurred to refinance the Company's existing Senior Notes. The Term B Loan will mature on July 15, 2019 if (i) any of the Company's existing Senior Subordinated Notes are outstanding on July 15, 2019, or (ii) any indebtedness with a final maturity prior to the date that is 91 days after August 19, 2023 is incurred to refinance the Company's existing Senior Subordinated Notes.

        Proceeds from the issuance of the new Term B Loans were used to repay in full the existing $1.825 billion Term B Loan, which had a maturity date of April 15, 2019 and which bore interest at the same rates described above. The Company used the remaining $240.0 million in proceeds to fund the

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Table of Contents


WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 6. Long-Term Debt and Capital Leases (Continued)

Company's acquisition of HC Cable Opco, LLC ("NuLink") and to redeem a portion of the Company's 13.38% Senior Subordinated Notes. The Company recorded a loss on extinguishment of debt of $10.5 million during the year ended December 31, 2016, primarily representing the expensing of third party arranger fees and the write off of unamortized debt issuance costs related to a portion of the former Term B Loans.

Refinancing of Term B Loans and payoff of Term B-1 Loans

        On May 11, 2016, the Company entered into a fifth amendment ("Fifth Amendment") to its Credit Agreement, dated as of July 17, 2012, as amended on April 1, 2013, November 27, 2013, May 21, 2015 and July 1, 2015 ("Original Credit Agreement") among the Company and the other parties thereto.

        The Fifth Amendment, among other provisions, provided for the addition of an incremental $432.5 million in new Term B Loans, having a maturity date in April 2019 and which bore interest, at the Company's option, at LIBOR plus 3.50% or ABR plus 2.50% and included a 1.00% LIBOR floor. Proceeds from the issuance of the new Term B Loans were used to repay all remaining $382.5 million outstanding principal under the Company's Term B-1 Loans which had a maturity date of July 2017 and which bore interest, at the Company's option, at LIBOR plus 3.00% or ABR plus 2.00% and which included a 0.75% LIBOR floor. The Company recorded a loss on extinguishment of debt of $2.5 million, primarily representing the write off of the unamortized debt issuance costs related to a portion of the former Term B-1 Loans.

Revolver Extension

        On July 1, 2015, the Company entered into a fourth amendment ("Fourth Amendment") to the Original Credit Agreement among the Company and the other parties thereto. On August 19, 2016, the Company entered into a sixth amendment (the "Sixth Amendment") to the Original Credit Agreement among the Company and the other parties thereto.

        Under the Original Credit Agreement, the Company had $200.0 million of borrowings available under its revolving credit facility (the "Revolver"), which was to mature on July 17, 2017. Under the Fourth Amendment and the Sixth Amendment, the maturity date for $180.0 million of the $200.0 million in available borrowings under the Revolver was extended until July 1, 2020, subject to the following: (a) on January 1, 2019, if any indebtedness incurred to refinance the term loans outstanding prior to the effectiveness of the Sixth Amendment is outstanding and has a maturity date prior to September 30, 2020, the Revolver will instead mature on January 1, 2019, and (b) on April 15, 2019, if (i) the Company has Senior Unsecured Notes outstanding or (ii) any indebtedness (other than indebtedness incurred under the Credit Agreement) incurred to refinance the Senior Unsecured Notes is outstanding and has a maturity date prior to November 28, 2023, the Revolver will instead mature on April 15, 2019.

        In addition, in the event the Company has outstanding borrowings under the Revolver in excess of $180.0 million as of July 17, 2017, the Company will be required to pay down such borrowings to the extent of such excess.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 7. Financial Information for Subsidiary Guarantors

        The subsidiary guarantors of the Notes are wholly owned, directly or indirectly, by WOW and have, jointly and severally, fully and unconditionally guaranteed, to each holder of the Notes, the full and prompt performance of WOW's and the co-issuer's obligations under the Notes and the indenture governing the Notes, including the payment of principal and interest on the Notes. WOW has no independent assets or operations, and there are no significant restrictions on the ability of its consolidated subsidiaries to transfer funds to WOW in the form of cash dividends, loans or advances. Based on these facts, and in accordance with SEC Regulation S-X Rule 3-10, "Financial statements of guarantors and issuers of guaranteed securities registered or being registered," WOW is not required to provide condensed consolidating financial information for the subsidiary guarantors.

        The indenture governing the Notes contains covenants that, among other things, limit WOW's ability, and the ability of WOW's restricted subsidiaries, to incur additional indebtedness, create liens, pay dividends on, redeem or repurchase WOW's capital stock, make investments or repay subordinated indebtedness, engage in sale-leaseback transactions, enter into transactions with affiliates, sell assets, create restrictions on dividends and other payments to WOW from its subsidiaries, issue or sell stock of subsidiaries, and engage in mergers and consolidations. All of the covenants are subject to a number of important qualifications and exceptions under the indenture.

Note 8. Fair Value Measurements

        The fair values of cash and cash equivalents, receivables, trade payables, short-term borrowings and the current portions of long-term debt approximate carrying values due to the short-term nature of these instruments. For assets and liabilities with a long-term nature, the Company determines fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Market or observable inputs are the preferred source of values, followed by unobservable inputs or assumptions based on hypothetical transactions in the absence of market inputs. The Company applies the following hierarchy in determining fair value:

    Level 1, defined as observable inputs being quoted prices in active markets for identical assets;

    Level 2, defined as observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

    Level 3, defined as unobservable inputs for which little or no market data exists, consistent with reasonably available assumptions made by other participants therefore requiring assumptions based on the best information available.

        The estimated fair value of the Company's long-term debt, which includes debt subject to the effects of interest rate risk, was based on dealer quotes considering current market rates and was approximately $2,821.4 million, not including debt issuance costs, discount and premium, compared to carrying value of $2,784.5 million, not including debt issuance costs, discount and premium as of March 31, 2017 and, therefore, is categorized as a Level 1 within the fair value hierarchy.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 9. Income Taxes

        The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statements in the period of enactment.

        The Company assesses the available positive and negative evidence to estimate whether sufficient taxable income will be generated to permit the utilization of existing deferred tax assets. On the basis of this evaluation, as of March 31, 2017, a valuation allowance of $126.5 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The valuation allowance is based on the Company's existing positive and negative evidence. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased based on the Company's future operating results.

        The Company reported total income tax benefit (expense) of $23.9 million and $(1.5) million during the quarters ended March 31, 2017 and 2016, respectively. On January 12, 2017, the Company and MidCo consummated the asset purchase agreement pursuant to which MidCo acquired the Company's Lawrence, Kansas system for net proceeds of approximately $213.0 million in cash, subject to certain normal and customary purchase price adjustments set forth in the agreement. As a result of the sale, the Company has recorded $11.3 million of income tax expense. In addition, a deferred income tax benefit of $37.8 million was recognized as a result in the change of valuation allowance.

        The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. For federal tax purposes, the Company's 2013 through 2016 tax years remain open for examination by the tax authorities under the normal three year statute of limitations. Generally, for state tax purposes, the Company's 2013 through 2016 tax years remain open for examination by the tax authorities under a three year statute of limitations. Should the Company utilize any of its U.S. or state loss carryforwards, their carryforward losses, which date back to 1995, would be subject to examination.

        As of March 31, 2017, the Company recorded gross unrecognized tax benefits of $30.9 million, all of which, if recognized, would affect the Company's effective tax rate. Interest and penalties related to income tax liabilities, if incurred, are included in income tax benefit (expense) in the combined condensed consolidated statement of operations. The Company has accrued gross interest and penalties of $0.4 million. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues are addressed in the Company's tax audits in a manner not consistent with management's expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

        Unrecognized tax benefits consist primarily of tax positions related to issues associated with the acquisition of Knology, Inc. Depending on the resolution with certain state taxing authorities that is expected to occur within the next twelve months, there could be an adjustment to the Company's unrecognized tax benefits and certain state tax matters.

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 9. Income Taxes (Continued)

        The Company is not currently under examination for U.S. federal income tax purposes, but does have various open tax controversy matters with various state taxing authorities.

Note 10. Commitments and Contingencies

        The Company is party to various legal proceedings (including individual, class and putative class actions) arising in the normal course of its business covering a wide range of matters and types of claims including, but not limited to, general contracts, billing disputes, rights of access, programming, taxes, fees and surcharges, consumer protection, trademark and patent infringement, employment, regulatory, tort, claims of competitors and disputes with other carriers.

        In accordance with GAAP, WOW accrues an expense for pending litigation when it determines that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Legal defense costs are expensed as incurred. None of the Company's existing accruals for pending matters is material. WOW regularly monitors its pending litigation for the purpose of adjusting its accruals and revising its disclosures accordingly, in accordance with GAAP, when required. Litigation is, however, subject to uncertainty, and the outcome of any particular matter is not predictable. The Company vigorously defends its interests in pending litigation, and as of this date, WOW believes that the ultimate resolution of all such matters, after considering insurance coverage or other indemnities to which it is entitled, will not have a material adverse effect on its condensed consolidated financial position, results of operations, or cash flows.

Note 11. Related Party Transactions

        The Company pays a quarterly management fee of $0.4 million plus travel and miscellaneous expenses, if any, to Avista Capital Partners ("Avista") and Crestview Advisors L.L.C. ("Crestview"), majority owners of the Company's Parent. The management fee paid by the Company for the three months ended March 31, 2017 and 2016 amounted to $0.5 million and $0.4 million, respectively.

        On December 18, 2015, Crestview, a private equity firm based in New York, and Parent consummated a transaction whereby Crestview Partners III GP, L.P. became the beneficial owner of approximately 35% of Parent. Under terms of the agreement, Crestview's funds purchased units held by Avista and other unitholders, and made a primary investment of $125.0 million in newly issued units of Parent.

        On April 29, 2016, funds managed by Avista and Crestview made an additional $40.0 million investment in newly-issued membership units in Parent.

        As of March 31, 2017, $131.7 million of proceeds from these transactions have been contributed to the Company while the remaining $11.4 million, net of accrued and paid transaction expenses, have been recorded to our Parent's balance sheet and have not been pushed down or reflected in the Company's condensed consolidated financial statements.

        During the three months ended March 31, 2017, the Company's Parent bought back vested Class A and Class B units from former employees of the Company. The former employees had the option to sell their units at a price set by the Company's Parent. The Company's Parent made such

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WideOpenWest, Inc. and Subsidiaries and Affiliates

Notes to the Combined Condensed Consolidated Financial Statements (Continued)

March 31, 2017

(unaudited)

Note 11. Related Party Transactions (Continued)

cash payments to repurchase these units from its bank account. Since the Parent's primary assets are its investment in the Company, the Parent's ownership structure has been "pushed down" to the Company. The cash proceeds used to repurchase such units have been contributed down to the Company and reflected as such. The Company repurchased 23,083 of Class A units and 13,515 of Class B units for $8.8 million.

        As of March 31, 2017 and December 31, 2016, the receivable balance from the Parent and Members amounted to $0.3 million and $0.3 million, respectively.

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GRAPHIC


Table of Contents

 

Until                  , 2017 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the dealers' obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

19,047,619 Shares

LOGO

WideOpenWest, Inc.

Common Stock

UBS Investment Bank
Credit Suisse
RBC Capital Markets
SunTrust Robinson Humphrey
Evercore ISI
Macquarie Capital
LionTree
Raymond James



PROSPECTUS



                , 2017


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INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution.

        The following table sets forth all costs and expenses, other than the underwriting discounts and commissions payable by us, in connection with the offer and sale of the securities being registered. All amounts shown are estimates except for the SEC registration fee and the Financial Industry Regulatory Authority, Inc. ("FINRA") filing fee.

 
  Amount  

SEC registration fee

  $ 55,852  

FINRA filing fee

    60,500  

Listing fee

     

Printing expenses

    350,000  

Accounting fees and expenses

    550,000  

Legal fees and expenses

    1,500,000  

Blue Sky fees and expenses

    5,000  

Transfer Agent and Registrar fees and expenses

    6,450  

Miscellaneous expenses

    972,198  

Total

  $ 3,500,000  

Item 14.    Indemnification of Officers and Directors.

        Section 102(b)(7) of the DGCL allows a corporation to provide in its certificate of incorporation that a director of the corporation will not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached the duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our amended and restated certificate of incorporation will provide for this limitation of liability.

        Section 145 of the DGCL ("Section 145"), provides that a Delaware corporation may indemnify any person who was, is or is threatened to be made, party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred.

        Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his or her status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.

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        Our amended and restated certificate of incorporation will provide that we must indemnify our directors and officers to the fullest extent authorized by the DGCL and must also pay expenses incurred in defending any such proceeding in advance of its final disposition upon delivery of an undertaking, by or on behalf of an indemnified person, to repay all amounts so advanced if it should be determined ultimately that such person is not entitled to be indemnified under this section or otherwise.

        We intend to enter into indemnification agreements with each of our current directors and officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

        The indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our amended and restated certificate of incorporation, our amended and restated bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

        We maintain standard policies of insurance that provide coverage (1) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act and (2) to us with respect to indemnification payments that we may make to such directors and officers.

        The proposed form of underwriting agreement to be filed as Exhibit 1.1 to this Registration Statement provides for indemnification to our directors and officers by the underwriters against certain liabilities.

Item 15.    Recent Sales of Unregistered Securities

        None.

Item 16.    Exhibits

(1)
Exhibits

        The exhibit index attached hereto is incorporated herein by reference.

(2)
Financial Statement Schedules

        No financial statement schedules are provided because the information called for is not required or is shown in the financial statements or the notes thereto.

Item 17.    Undertakings

        The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

        Insofar as indemnification for liabilities arising under the Securities Act, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction, the question whether such

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indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        The undersigned registrant hereby further undertakes that:

    (1)
    For purposes of determining any liability under the Securities Act, as amended, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

    (2)
    For the purpose of determining any liability under the Securities Act, as amended, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Englewood, State of Colorado, on May 15, 2017.

    WideOpenWest, Inc.

 

 

By:

 

/s/ STEVEN COCHRAN

        Name:   Steven Cochran
        Title:   Chief Executive Officer

        Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated and on the date indicated below:

Name
 
Title
 
Date

 

 

 

 

 

 

 
/s/ STEVEN COCHRAN

Steven Cochran
  Chief Executive Officer and Director (Principal Executive Officer)   May 15, 2017

/s/ RICHARD E. FISH, JR.

Richard E. Fish, Jr.

 

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

 

May 15, 2017

*

David Burgstahler

 

Director

 

May 15, 2017

*

Brian Cassidy

 

Director

 

May 15, 2017

*

Daniel Kilpatrick

 

Director

 

May 15, 2017

*

Jeffrey Marcus

 

Director

 

May 15, 2017

*

Phil Seskin

 

Director

 

May 15, 2017

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Name
 
Title
 
Date

 

 

 

 

 

 

 
*

Joshua Tamaroff
  Director   May 15, 2017

*By:

 

/s/ RICHARD E. FISH, JR.

Richard E. Fish, Jr.
Attorney-in-Fact

 

 

 

 

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EXHIBIT INDEX

Exhibit
No.
  Description
  1.1   Form of Underwriting Agreement.*
        
  3.1   Form of Amended and Restated Certificate of Incorporation of WideOpenWest, Inc.
        
  3.2   Form of Amended and Restated Bylaws of WideOpenWest, Inc.
        
  4.2   Senior Note Indenture, dated as of July 17, 2012, by and among WideOpenWest Finance, LLC, WideOpenWest Capital Corp., the guarantors specified therein, and Wilmington Trust, National Association, as trustee and collateral agent (incorporated by reference to Exhibit 4.1 to WideOpenWest Finance, LLC's Registration Statement on Form S-4, File No. 333-187850, filed on April 10, 2013).
        
  4.3   Senior Subordinated Note Indenture, dated as of July 17, 2012, by and among WideOpenWest Finance, LLC, WideOpenWest Capital Corp., the guarantors specified therein, and Wilmington Trust, National Association, as trustee and collateral agent (incorporated by reference to Exhibit 4.3 to WideOpenWest Finance, LLC's Registration Statement on Form S-4, File No. 333-187850, filed on April 10, 2013).
        
  5.1   Opinion of Kirkland & Ellis LLP.
        
  10.1   Credit Agreement, dated as of July 17, 2012, among WideOpenWest Finance, LLC, Racecar Acquisition, LLC, WideOpenWest Cleveland, Inc., WideOpenWest Illinois, Inc., WideOpenWest Networks, Inc., WideOpenWest Ohio, Inc., WOW Sigecom, Inc., WideOpenWest Kite Inc., the lending institutions from time to time parties thereto and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent (incorporated by reference to Exhibit 10.1 to WideOpenWest Finance, LLC's Registration Statement on Form S-4, File No. 333-187850, filed on April 10, 2013).
        
  10.2   First Amendment to Credit Agreement, dated as of April 1, 2013, by and between WideOpenWest Finance, LLC and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent (incorporated by reference to Exhibit 10.11 to WideOpenWest Finance, LLC's Registration Statement on Form S-4, File No. 333-187850, filed on April 10, 2013).
        
  10.3   Second Amendment to Credit Agreement, dated as of April 1, 2013, by and between WideOpenWest Finance, LLC and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent (incorporated by reference to Exhibit 10.6 to WideOpenWest Finance, LLC's Annual Report on Form 10-K, File No. 333-187850, filed on March 17, 2014).
        
  10.4   Third Amendment to Credit Agreement, dated as of May 21, 2015, by and between WideOpenWest Finance, LLC, Credit Suisse AG, Cayman Islands Branch, as Administrative Agent, and Credit Suisse Securities (USA) LLC, as the Third Amendment Lead Arranger (incorporated by reference to Exhibit 10.1 to WideOpenWest Finance, LLC's Current Report on Form 8-K, File No. 333-187850, filed on May 26, 2015).
        
  10.5   Fourth Amendment to Credit Agreement, dated July 1, 2015, by and among WideOpenWest Finance, LLC, Credit Suisse AG, Cayman Islands Branch, as Administrative Agent, and Credit Suisse Securities (USA) LLC, as the Third Amendment Lead Arranger (incorporated by reference to Exhibit 10.1 to WideOpenWest Finance, LLC's Current Report on Form 8-K, File No. 333-187850, filed on July 6, 2015).
 
   

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Exhibit
No.
  Description
  10.6   Fifth Amendment to Credit Agreement, dated May 11, 2016, by and among WideOpenWest Finance, LLC and Credit Suisse AG, as Administrative Agent (incorporated by reference to Exhibit 10.1 to WideOpenWest Finance, LLC's Current Report on Form 8-K, File No. 333-187850).
        
  10.7   Sixth Amendment to Credit Agreement, dated August 19, 2016, by and among WideOpenWest Finance, LLC and Credit Suisse AG, as Administrative Agent (incorporated by reference to Exhibit 10.1 to WideOpenWest Finance, LLC's Quarterly Report on Form 10-Q, File No. 333-187850).
        
  10.8 + Letter Agreement of Employment, dated as of May 15, 2017, by and between WideOpenWest, Inc. and Cathy Kuo.
        
  10.9 + Letter Agreement of Employment, dated as of May 15, 2017, by and between WideOpenWest, Inc. and Craig Martin.
        
  10.10 + Letter Agreement of Employment, dated as of May 15, 2017, by and between WideOpenWest, Inc. and Cash Hagen.
        
  10.11 + Letter Agreement of Employment, dated as of May 15, 2017, by and between WideOpenWest, Inc. and Richard E. Fish, Jr.
        
  10.12 + Employment Agreement, dated as of May 15, 2017, by and among WideOpenWest, Inc. and Steven Cochran.
        
  10.13 + Letter Agreement of Employment, dated as of May 15, 2017, by and between WideOpenWest, Inc. and Scott Russell.
        
  10.14   Form of WideOpenWest, Inc. Directors & Officers Indemnification Agreement.
        
  10.15   Form of WideOpenWest, Inc. 2017 Omnibus Incentive Plan.
        
  10.16   Form of Restricted Stock Agreement Pursuant to the WideOpenWest, Inc. 2017 Omnibus Incentive Plan.
        
  10.17   Form of Restricted Stock Unit Agreement Pursuant to the WideOpenWest, Inc. 2017 Omnibus Incentive Plan.
        
  10.18   Form of Incentive Stock Option Agreement Pursuant to the WideOpenWest, Inc. 2017 Omnibus Incentive Plan.
        
  10.19   Form of Nonqualified Stock Option Plan Pursuant to the WideOpenWest, Inc. 2017 Omnibus Incentive Plan.
        
  10.20   Form of WideOpenWest, Inc. Stockholders' Agreement.
        
  10.21   Form of WideOpenWest, Inc. Registration Rights Agreement.
        
  21.1   List of Subsidiaries.
        
  23.1   Consent of BDO USA, LLP.
        
  23.2   Consent of Kirkland & Ellis LLP (included in Exhibit 5.1).
        
  24.1   Power of Attorney (previously included on the signature pages to this Registration Statement).

+
Management Contract or Compensatory Plan or Arrangement.

*
To be filed by amendment.

II-7




Exhibit 3.1

 

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

WIDEOPENWEST, INC.,

 

a Delaware corporation

 

WideOpenWest Inc., a Delaware corporation (the “Corporation”), hereby certifies as follows:

 

1.             The name of the Corporation is WideOpenWest, Inc. The date of filing of the Corporation’s original Certificate of Incorporation was June 22, 2012. The Corporation was originally incorporated under the name WideOpenWest Kite, Inc. The Corporation was renamed to WideOpenWest, Inc. on March 15, 2017.

 

2.             The Amended and Restated Certificate of Incorporation attached hereto as Exhibit A, which restates, integrates and further amends the provisions of the existing Certificate of Incorporation of the Corporation, as heretofore amended, has been duly adopted by the Corporation’s Board of Directors and the stockholders in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, with the adoption of the Corporation’s stockholders having been given by written consent in lieu of a meeting thereof in accordance with Section 228 of the General Corporation Law of the State of Delaware.

 

IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by Richard E. Fish, Jr., its Chief Financial Officer, this [•] day of [•], 2017.

 

 

By:

 

 

Name:

Richard E. Fish, Jr.

 

Title:

Chief Financial Officer

 



EXHIBIT A

 

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

WIDEOPENWEST, INC.

 

ARTICLE ONE

 

The name of this corporation is WideOpenWest, Inc. (the “Corporation”).

 

ARTICLE TWO

 

The registered office of this Corporation in the State of Delaware is located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, Delaware 19808. The name of its registered agent at such address is Corporation Service Company.

 

ARTICLE THREE

 

The purpose of this Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “Delaware General Corporation Law”).

 

ARTICLE FOUR

 

Section 1               Authorized Shares . The total number of shares of all classes of capital stock that the Corporation has authority to issue is 800,000,000 shares, consisting of:

 

(a)           100,000,000 shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”); and

 

(b)           700,000,000 shares of Common Stock, par value $0.01 per share (the “Common Stock”).

 

The Preferred Stock and the Common Stock shall have the rights, preferences and limitations set forth below.

 

Section 2               Preferred Stock . Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (the “Board of Directors”) is authorized, to provide by resolution or resolutions from time to time for the issuance, out of the authorized but unissued shares of Preferred Stock, of all or any of the shares of Preferred Stock in one or more series, and to establish the number of shares to be included in each such series, and to fix the voting powers (full, limited or no voting powers), designations, powers, preferences, and relative, participating, optional or other rights, if any, and any qualifications, limitations or restrictions thereof, or such series, including, without limitation, that any such series may be (i) subject to redemption at such time or times and at such price or prices, (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of capital stock, (iii) entitled to such rights upon

 

2



 

the liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation or (iv) convertible into, or exchangeable for, shares of any other class or classes of capital stock, or of any other series of the same class of capital stock, of the Corporation at such price or prices or at such rates and with such adjustments; all as may be stated in such resolution or resolutions, which resolution or resolutions shall be set forth on a certificate of designations filed with the Secretary of State of the State of Delaware in accordance with the Delaware General Corporation Law. Except as otherwise provided in this Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), no vote of the holders of Preferred Stock or Common Stock shall be a prerequisite to the designation or issuance of any shares of any series of Preferred Stock authorized by and complying with the conditions of this Certificate of Incorporation. Notwithstanding the provisions of Section 242(b)(2) of the Delaware General Corporation Law, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of the Corporation entitled to vote, without the separate vote of the holders of the Preferred Stock as a class. Subject to Section 1 of this ARTICLE FOUR, the Board of Directors is also expressly authorized to increase or decrease the number of shares of any series of Preferred Stock subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. Unless otherwise expressly provided in the certificate of designations in respect of any series of Preferred Stock, in case the number of shares of such series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

 

Section 3               Common Stock .

 

(a)           Voting Rights. Except as otherwise provided by the Delaware General Corporation Law or this Certificate of Incorporation and subject to the rights of holders of Preferred Stock, all of the voting power of the stockholders of the Corporation shall be vested in the holders of the Common Stock, and each holder of Common Stock shall have one vote for each share held by such holder on all matters voted upon by the stockholders of the Corporation. Notwithstanding any other provision of this Certificate of Incorporation to the contrary, the holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designation in respect of any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separate or together as a class with the holders of one or more such other series, to vote thereon pursuant to this Certificate of Incorporation or the Delaware General Corporation Law.

 

(b)           Dividends. Subject to the rights of the holders of any series of Preferred Stock, and to the other provisions of this Certificate of Incorporation, holders of Common Stock shall be entitled to receive equally, on a per share basis, such dividends and other distributions in cash, securities or other property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor.

 

(c)           Liquidation Rights. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, after payment or provision

 

3



 

for payment of the Corporation’s debts and subject to the rights of the holders of shares of any series of Preferred Stock upon such dissolution, liquidation or winding up, the remaining net assets of the Corporation shall be distributed among holders of shares of Common Stock equally on a per share basis. A merger or consolidation of the Corporation with or into any other corporation or entity, or a sale, lease, exchange, conveyance or other disposition of all or any part of the assets of the Corporation shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation within the meaning of this Section 3(c).

 

(d)           Conversion Rights. The Common Stock shall not be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same class of the Corporation’s capital stock.

 

(e)           Preemptive Rights. No holder of shares of Common Stock shall be entitled to preemptive or subscription rights pursuant to this Certificate of Incorporation.

 

Section 4               Split of Common Stock. Upon this Certificate of Incorporation becoming effective in accordance with the Delaware General Corporation Law (the “ Effective Time ”) each share of Common Stock issued and outstanding or held in treasury immediately prior to the Effective Time, if any, shall, automatically and without any action on the part of the respective holders thereof, be reclassified as and converted into 67,274.092 shares of Common Stock and any stock certificate that, immediately prior to the Effective Time, represented one share of Common Stock shall, from and after the Effective Time, represent 67,274.092 shares of Common Stock.

 

ARTICLE FIVE

 

The Corporation shall have perpetual existence.

 

ARTICLE SIX

 

Section 1               Board of Directors, Number . Unless otherwise provided by this Certificate of Incorporation or the Delaware General Corporation Law, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. Subject to any rights of the holders of Preferred Stock to elect additional directors under specified circumstances, the number of directors which shall constitute the Board of Directors shall be fixed from time to time by resolution adopted by the Board of Directors.

 

Section 2               Classification of Directors . Subject to any rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the directors of the Corporation shall be divided into three classes as nearly equal in size as is practicable, designated Class I, Class II and Class III. The term of office of the initial Class I directors shall expire at the first annual meeting of stockholders occurring after the initial public offering, the term of office of the initial Class II directors shall expire at the second annual meeting of stockholders occurring after the initial public offering, and the term of office of the initial Class III directors shall expire at the third annual meeting of stockholders occurring after the initial public offering. At each annual meeting after the first annual meeting of stockholders occurring after the initial public offering, each director elected to the class of directors expiring at such annual meeting shall be elected to hold office until the third succeeding annual meeting and until his or her successor shall have been duly elected and qualified, or until his or her earlier death,

 

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resignation, removal or retirement. If the number of directors divided into classes as set forth herein is hereafter changed, any newly created directorship(s) or decrease in the number of directors shall be so apportioned among the classes as to make all classes as nearly equal in number as practicable. No decrease in the number of directors shall shorten the term of any incumbent director. Elections of directors need not be by written ballot unless the bylaws of the Corporation (as the same may be amended and/or restated from time to time, the “Bylaws”) shall so provide. The Board of Directors is authorized to assign members of the Board of Directors already in office to their respective classes.

 

Section 3               Newly-Created Directorships and Vacancies . Subject to the rights of the holders of any series of Preferred Stock, any newly created directorships resulting from any increase in the number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or any other cause shall be filled exclusively by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by the sole remaining director, and shall not be filled by stockholders. A director elected to fill a vacancy or a newly created directorship shall be elected for the unexpired term of his or her predecessor in office, and a director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor is duly elected and qualified, or his or her earlier death, resignation, removal or retirement.

 

Section 4               Removal of Directors . Subject to the rights of the holders of any series of Preferred Stock, (i) prior to the Trigger Date (as defined below), any director may be removed from office at any time with or without cause, at a meeting called for that purpose, by the affirmative vote of the holders of at least a majority of the voting power of all outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class and (ii) after the Trigger Date, any director may be removed from office at any time but only with cause, at a meeting called for that purpose, by the affirmative vote of the holders of at least 75% of the voting power of all outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class.

 

Section 5               Rights of Holders of Preferred Stock . Notwithstanding the provisions of this ARTICLE SIX, whenever the holders of one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately or together by series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorship shall be governed by the rights of such Preferred Stock as set forth in the certificate of designations or certificates of designations governing such series.

 

Section 6               No Cumulative Voting . Except as may otherwise be set forth in the resolution or resolutions of the Board of Directors providing the issue of one or more series of Preferred Stock, and then only with respect to such series of Preferred Stock, cumulative voting in the election of directors is specifically denied.

 

ARTICLE SEVEN

 

Section 1               Limitation of Liability .

 

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(a)           To the fullest extent permitted by the Delaware General Corporation Law as it now exists or may hereafter be amended, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the Delaware General Corporation Law is amended hereafter to permit the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

 

(b)           Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring at or prior to the time of such repeal or modification.

 

ARTICLE EIGHT

 

Section 1               No Action by Written Consent . From and after the first date (the “Trigger Date”) on which investment funds affiliated with Avista Capital Partners and Crestview Partners and their respective successors and Affiliates (collectively, the “Sponsors”), together cease collectively to beneficially own (directly or indirectly) more than fifty percent (50%) of the outstanding shares of Common Stock, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. “Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person; the term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and “controlled” and “controlling” have meanings correlative to the foregoing. “Person” means an individual, any general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of such entity. For the purpose of this Certificate of Incorporation, “beneficial ownership” shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.

 

Section 2               Annual Meetings of Stockholders . Except as otherwise expressly provided by law, the annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held at such date, time and place, if any, as shall be determined exclusively by resolution of the Board of Directors in its sole and absolute discretion. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders at any meeting of stockholders shall be given in the manner provided in the Bylaws.

 

Section 3               Special Meetings of Stockholders . Subject to any special rights of the holders of any series of Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation shall be called exclusively (i) by or at the direction of the Board of Directors pursuant to a written resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies or (ii) prior to

 

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the Trigger Date, by the Secretary of the Corporation at the request of the holders of fifty percent (50%) or more of the outstanding shares of Common Stock, and shall not be called by stockholders. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

 

ARTICLE NINE

 

Section 1               Certificate of Incorporation . The Corporation reserves the right at any time from time to time to alter, amend, repeal or change any provision contained in this Certificate of Incorporation, and to adopt any other provision authorized by the Delaware General Corporation Law, in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. Notwithstanding anything to the contrary contained in this Certificate of Incorporation or the Bylaws, and notwithstanding that a lesser percentage or vote may be permitted from time to time by applicable law, no provision of ARTICLE SIX, ARTICLE SEVEN, ARTICLE EIGHT, this ARTICLE NINE, ARTICLE TEN, ARTICLE ELEVEN and ARTICLE TWELVE may be altered, amended or repealed in any respect, nor may any provision of this Certificate of Incorporation or of the Bylaws inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate of Incorporation or otherwise required by law, (i) prior to the Trigger Date, such alteration, amendment, repeal or adoption is approved by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class and (ii) from and after the Trigger Date, such alteration, amendment, repeal or adoption is approved at a meeting of the stockholders called for that purpose by the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

Section 2               Bylaws . In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to adopt, alter, amend or repeal the Bylaws without any action on the part of the stockholders. Any adoption, alteration, amendment or repeal of the Bylaws by the Board of Directors shall require the approval of a majority of the Board of Directors then in office, provided a quorum is otherwise present. Any Bylaws adopted or amended by the Board of Directors, and any powers conferred thereby, may be amended, altered or repealed by the stockholders. In addition to any other vote otherwise required by law or this Certificate of Incorporation, from and after the Trigger Date, with respect to the adoption, alteration, amendment or repeal of the Bylaws by the stockholders, the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote with respect thereto, voting together as a single class, shall be required to adopt, alter, amend or repeal the Bylaws.

 

ARTICLE TEN

 

The Corporation expressly elects not to be governed by Section 203 of the Delaware General Corporation Law.

 

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ARTICLE ELEVEN

 

Section 1               Scope . The provisions of this ARTICLE ELEVEN are set forth to define, to the extent permitted by applicable law, the duties of Exempted Persons (as defined below) to the Corporation with respect to certain classes or categories of business opportunities. “Exempted Persons” means the Sponsors and their respective Affiliates (other than the Corporation and its subsidiaries) and all of their respective partners, principals, directors, officers, members, managers and employees, including any of the foregoing who serve as officers or directors of the Corporation.

 

Section 2               Competition and Allocation of Corporate Opportunities . To the fullest extent permitted by law, the Exempted Persons shall not have any fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Corporation or any of its subsidiaries. To the fullest extent permitted by applicable law, the Corporation, on behalf of itself and its subsidiaries, renounces any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to the Exempted Persons, even if the opportunity is one that the Corporation or its subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and each such Exempted Person shall have no duty to communicate or offer such business opportunity to the Corporation and, to the fullest extent permitted by applicable law, shall not be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such Exempted Person pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or its subsidiaries.

 

Section 3               Certain Matters Deemed Not Corporate Opportunities . In addition to and notwithstanding the foregoing provisions of this ARTICLE ELEVEN, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity that the Corporation is not financially or legally able or contractually permitted to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.

 

Section 4               Amendment of this Article . To the fullest extent permitted by law, no amendment or repeal of this ARTICLE ELEVEN in accordance with the provisions of Section 1 of ARTICLE ELEVEN shall apply to or have any effect on the liability or alleged liability of any Exempted Person for or with respect to any activities or opportunities of which such Exempted Person becomes aware prior to such amendment or repeal. This ARTICLE ELEVEN shall not limit or eliminate any protections or defenses otherwise available to, or any rights to indemnification or advancement of expenses of, any director or officer of the Corporation under this Certificate of Incorporation, the Bylaws, any agreement between the Corporation and such officer or director, or any applicable law.

 

Section 5               Deemed Notice . Any person or entity purchasing, holding or otherwise acquiring any interest in any shares of the Corporation shall be deemed to have notice of and to have consented to the provisions of this ARTICLE ELEVEN.

 

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ARTICLE TWELVE

 

Unless this Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation arising pursuant to any provision of the Delaware General Corporation Law or (iv) any action asserting a claim against the Corporation governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation (including, without limitation, shares of Common Stock) shall be deemed to have notice of and to have consented to the provisions of this ARTICLE TWELVE.

 

ARTICLE THIRTEEN

 

If any provision (or any part thereof) of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any section of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Certificate of Incorporation (including, without limitation, any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by law.

 

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Exhibit 3.2

 

AMENDED AND RESTATED

 

BYLAWS

 

OF

 

WIDEOPENWEST, INC.

 

A Delaware corporation

 

(Adopted as of [•], 2017)

 

ARTICLE I
OFFICES

 

Section 1.                                            Registered Office . The address of the registered office of WideOpenWest, Inc. (the “Corporation”) in the State of Delaware, and the name of the Corporation’s registered agent at such address, shall be as set forth in the Amended and Restated Certificate of Incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”).

 

Section 2.                                            Other Offices . The Corporation may have an office or offices other than said registered office at such place or places, either within or outside the State of Delaware, as the Board of Directors shall from time to time determine or the business of the Corporation may from time to time require.

 

Section 3.                                            Books and Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be maintained on any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.

 

ARTICLE II
MEETINGS OF STOCKHOLDERS

 

Section 1.                                            Place of Meetings . All meetings of stockholders shall be held at such place, if any, as may be designated from time to time by the Board of Directors. The Board of Directors may designate such place of meeting, either within or outside the State of Delaware. In the absence of such designation, meetings of stockholders shall be held at the principal executive office of the Corporation. The Board of Directors may, in its sole discretion, determine that a meeting shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a) of the General Corporation Law of the State of Delaware.

 

Section 2.                                            Annual Meeting . An annual meeting of the stockholders shall be held on such date and at such time as is specified by the Board of Directors. At the annual meeting, stockholders shall elect directors and transact such other business as may be properly brought

 



 

before the annual meeting pursuant to Section 11 of ARTICLE II hereof. The Board of Directors may postpone, reschedule or cancel any previously scheduled annual meeting of the stockholders.

 

Section 3.                                            Special Meetings . Special meetings of the stockholders may only be called in the manner provided in the Certificate of Incorporation. Business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the Corporation’s notice of the meeting given by or at the direction of the Board of Directors or by the Secretary (solely to the extent and in the manner provided by the Certificate of Incorporation). The Board of Directors may postpone, reschedule or cancel any previously scheduled special meeting of stockholders.

 

Section 4.                                            Notice .

 

(a)                                  Timing; Contents . Whenever stockholders are required or permitted to take action at a meeting, written notice of each annual and special meeting of stockholders stating the date, time and place, if any, of the meeting, the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different than the record date for stockholders entitled to notice of the meeting) and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given by or at the direction of the Board of Directors or by the Secretary (solely to the extent and in the manner provided by the Certificate of Incorporation), to each stockholder of record entitled to vote thereat not less than ten (10) nor more than sixty (60) days before the date of the meeting except as otherwise required by law.

 

(b)                                  Form of Notice . All such notices shall be delivered in writing, in person or by a form of electronic transmission if receipt thereof has been consented to by the stockholder to whom the notice is given. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the Corporation, or, if a stockholder shall have filed with the Secretary of the Corporation a written request that notices to such stockholder be mailed to some other address, then directed to such stockholder at such other address. If given by facsimile telecommunication, such notice shall be deemed given when directed to a number at which the stockholder has consented to receive notice by facsimile. Subject to the limitations of Section 4(d) of this ARTICLE II, if given by electronic transmission, such notice shall be deemed given: (i) by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (ii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (x) such posting and (y) the giving of such separate notice by United States mail or facsimile transmission; and (iv) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the Secretary or an Assistant Secretary of the Corporation, the transfer agent of the Corporation or any other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

(c)                                   Waiver of Notice . Whenever notice is required to be given under any provisions of the General Corporation Law of the State of Delaware, the Certificate of

 

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Incorporation or these Bylaws, a written waiver thereof, signed by the stockholder entitled to notice, or a waiver by electronic transmission by the person or entity entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting of stockholders of the Corporation need be specified in any waiver of notice of such meeting. Attendance of a stockholder of the Corporation at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of the meeting shall be bound by the proceedings of the meeting in all respects as if due notice thereof had been given.

 

(d)                                  Notice by Electronic Delivery . Without limiting the manner by which notice otherwise may be given effectively to stockholders of the Corporation pursuant to the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws, any notice to stockholders of the Corporation given by the Corporation under any provision of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder of the Corporation to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed revoked if: (i) the Corporation is unable to deliver by electronic transmission two (2) consecutive notices of meetings or of other business given by the Corporation in accordance with such consent; and (ii) such inability becomes known to the Secretary or an Assistant Secretary of the Corporation or to the transfer agent or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. For purposes of these Bylaws, except as otherwise limited by applicable law, the term “electronic transmission” means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

 

Section 5.                                            List of Stockholders . The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Nothing contained in this section shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting or (b) during ordinary business hours, at the principal place of business of the Corporation. In the event the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

 

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If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this section or to vote in person or by proxy at any meeting of stockholders.

 

Section 6.                                            Quorum . Except as otherwise provided by the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws, the holders of a majority in voting power of the shares of capital stock of the Corporation issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy at the meeting, shall constitute a quorum for the transaction of business at all meetings of the stockholders; it being understood that to the extent the Board of Directors issues or grants any shares that are subject to vesting or forfeiture and restrict or eliminate voting rights with respect to such shares until such vesting criteria is satisfied or such forfeiture provisions lapse, any such unvested shares shall not be considered to have the power to vote at a meeting of stockholders. If a quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Where a separate vote by a class or classes or series is required by law or by the Certificate of Incorporation, the holders of a majority in voting power of the shares of such class or classes or series of capital stock issued and outstanding and entitled to vote on such matter, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on the matter. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided , however, that the foregoing shall not limit the right of the Corporation or any subsidiary of the Corporation to vote stock, including, but not limited to, its own stock, held by it in a fiduciary capacity. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.

 

Section 7.                                            Adjourned Meetings . Any meeting of stockholders, annual or special, may be adjourned from time to time to any other time and to any other place by the chairman of the meeting, at any time in advance of the meeting or at the meeting, or by the stockholders present or represented at the meeting and entitled to vote thereon, although less than a quorum. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 213(a) of the General Corporation Law of the State of Delaware, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

 

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Section 8.                                            Vote Required . When a quorum is present at any meeting of stockholders, the affirmative vote of the holders of a majority in voting power of the shares of capital stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall decide any question brought before the meeting (other than the election of directors), unless by express provisions of an applicable law or regulation applicable to the Corporation or its securities or of the rules or regulations of any stock exchange applicable to the Corporation or of the Certificate of Incorporation or of these Bylaws a different vote is required, in which case such express provision shall govern and control the decision of such question. Where a separate vote by a class or classes or series of capital stock is required by law or by the Certificate of Incorporation, the affirmative vote of the majority of shares of such class, classes or series present in person or represented by proxy at the meeting shall be the act of such class, classes or series. Unless otherwise provided by the Certificate of Incorporation, directors shall be elected by a plurality of the votes cast by the holders of record of capital stock entitled to vote in the election of such directors. No vote of the stockholders need be taken by written ballot or by electronic transmission unless otherwise required by law. Any vote not required to be taken by written ballot or by electronic transmission may be conducted in any manner approved by the Board of Directors prior to the meeting at which such vote is taken.

 

Section 9.                                            Voting Rights . Except as otherwise provided by the General Corporation Law of the State of Delaware or the Certificate of Incorporation (including any certificate of designation in respect of any series of preferred stock), each holder of record of capital stock shall at every meeting of the stockholders be entitled to one vote for each share of capital stock held by such stockholder on the record date for voting for such meeting.

 

Section 10.                                     Proxies . Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy executed or transmitted in a manner permitted by applicable law, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting or voting in person or by filing with the Secretary of the Corporation either an instrument in writing revoking the proxy or another duly executed proxy bearing a later date. At each meeting of stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the Secretary or a person designated by the Secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular.

 

Section 11.                                     Business Brought Before a Meeting of the Stockholders .

 

(A) Annual Meetings.

 

(1) At an annual meeting of the stockholders, only such nominations of persons for election to the Board of Directors shall be considered and such other business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, nominations and other business must be a proper matter for stockholder

 

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action under Delaware law and must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors or a duly authorized committee thereof, (b) brought before the meeting by or at the direction of the Board of Directors or a duly authorized committee thereof or (c) otherwise properly brought before the meeting by a stockholder who (i) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in paragraph (A) of this Section 11 of ARTICLE II is delivered to the Secretary of the Corporation and on the record date for the determination of stockholders entitled to vote at the annual meeting of stockholders, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in paragraph (A) of this Section 11 of ARTICLE II. For nominations or other business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing and in proper form to the Secretary of the Corporation even if such matter is already the subject of any notice to the stockholders or public announcement from the Board of Directors. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting (provided, however, that in the event that there was no annual meeting in the prior year or the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation). In no event shall any adjournment, deferral or postponement of an annual meeting or the public announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Notwithstanding anything in this paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors at an annual meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by paragraph (A) of this Section 11 of ARTICLE II shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

 

(2) A stockholder’s notice providing for the nomination of a person or persons for election as a director or directors of the Corporation shall set forth (a) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (and for purposes of clauses (ii) through (ix) below, including any interests described therein held by any affiliates or associates (each within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”) for purposes of these Bylaws) of such stockholder or beneficial owner or by any member of such stockholder’s or beneficial owner’s immediate family sharing the same household or Stockholder Associated Person (as defined below), in each case as of the date of such stockholder’s notice, which information shall be confirmed or

 

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updated, if necessary, by such stockholder and beneficial owner (x) not later than ten (10) days after the record date for the notice of the meeting to disclose such ownership as of the record date for the notice of the meeting, and (y) not later than eight (8) business days before the meeting or any adjournment or postponement thereof to disclose such ownership as of the date that is ten (10) business days before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement)) (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) (provided that a person shall in all events be deemed to beneficially own any shares of any class or series and number of shares of capital stock of the Corporation as to which such person has a right to acquire beneficial ownership at any time in the future) and owned of record by such stockholder or beneficial owner, (iii) the class or series, if any, and number of options, warrants, puts, calls, convertible securities, stock appreciation rights, or similar rights, obligations or commitments with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares or other securities of the Corporation or with a value derived in whole or in part from the value of any class or series of shares or other securities of the Corporation, whether or not such instrument, right, obligation or commitment shall be subject to settlement in the underlying class or series of shares or other securities of the Corporation (each a “Derivative Security”), which are, directly or indirectly, beneficially owned by such stockholder or beneficial owner or Stockholder Associated Person (as defined below), (iv) any agreement, arrangement, understanding, or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such stockholder or beneficial owner or any Stockholder Associated Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of capital stock or other securities of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such stockholder or beneficial owner or any Stockholder Associated Person with respect to any class or series of capital stock or other securities of the Corporation, or that provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of any class or series or capital stock or other securities of the Corporation, (v) a description of any other direct or indirect opportunity to profit or share in any profit (including any performance-based fees) derived from any increase or decrease in the value of shares or other securities of the Corporation, (vi) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or beneficial owner or any Stockholder Associated Person has a right to vote any shares or other securities of the Corporation, (vii) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or such beneficial owner or such Stockholder Associated Person that are separated or separable from the underlying shares of the Corporation, (viii) any proportionate interest in shares of the Corporation or Derivative Securities held, directly or indirectly, by a general or limited partnership in which such stockholder or beneficial owner or Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, if any, (ix) a description of all agreements, arrangements, and understandings between such stockholder or beneficial owner or Stockholder Associated Person and any other person(s) (including their name(s)) in connection with or related to the ownership or voting of

 

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capital stock of the Corporation or Derivative Securities, (x) any other information relating to such stockholder or beneficial owner or Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (xi) a statement as to whether either such stockholder or beneficial owner or Stockholder Associated Person intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to elect such stockholder’s nominees and/or otherwise to solicit proxies from the stockholders in support of such nomination and (xii) a representation that the stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination, and (b) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in an election contest (even if an election contest is not involved) pursuant to the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (ii) a description of all direct and indirect compensation and other material agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder or beneficial owner or Stockholder Associated Person, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant, (iii) a completed and signed questionnaire regarding the background and qualifications of such person to serve as a director, a copy of which may be obtained upon request to the Secretary of the Corporation, (iv) all information with respect to such person that would be required to be set forth in a stockholder’s notice pursuant to this Section 11 of ARTICLE II if such person were a stockholder or beneficial owner, on whose behalf the nomination was made, submitting a notice providing for the nomination of a person or persons for election as a director or directors of the Corporation in accordance with this Section 11 of ARTICLE II and (v) such additional information that the Corporation may reasonably request to determine the eligibility or qualifications of such person to serve as a director or an independent director of the Corporation, or that could be material to a reasonable stockholder’s understanding of the qualifications and/or independence, or lack thereof, of such nominee as a director. For purposes of these Bylaws, a “Stockholder Associated Person” of any stockholder means (i) any “affiliate” or “associate” (as those terms are defined in Rule 12b-2 under the Exchange Act) of such stockholder, (ii) any beneficial owner of any stock or other securities of the Corporation owned of record or beneficially by such stockholder, (iii) any person directly or indirectly controlling, controlled by or under common control with any such Stockholder Associated Person referred to in clause (i) or (ii) above and (iv) any person acting in concert in respect of any matter involving the Corporation or its securities with either such stockholder or any beneficial owner of any stock or

 

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other securities of the Corporation owned of record or beneficially by such stockholder. Notwithstanding anything this Section 11 of ARTICLE II to the contrary, the requirements of this Section 11 of ARTICLE II shall not apply to the exercise by Avista Capital Partners (“Avista”) and Crestview Partners (“Crestview”) of its right to designate persons for nomination for election to the Board of Directors pursuant to the stockholders agreement to which it is a party with the Corporation.

 

(3) A stockholder’s notice regarding business proposed to be brought before a meeting of stockholders other than the nomination of persons for election to the Board of Directors shall set forth (a) as to the stockholder giving notice and the beneficial owner or Stockholder Associated Person, if any, on whose behalf the proposal is made, the information called for by clauses (a)(i) through (a)(ix) of the immediately preceding paragraph (2) (including any interests described therein held by any affiliates or associates of such stockholder or beneficial owner or by any member of such stockholder’s or beneficial owner’s immediate family sharing the same household, in each case as of the date of such stockholder’s notice, which information shall be confirmed or updated, if necessary, by such stockholder and beneficial owner (x) not later than ten (10) days after the record date for the notice of the meeting to disclose such ownership as of the record date for the notice of the meeting, and (y) not later than eight (8) business days before the meeting or any adjournment or postponement thereof to disclose such ownership as of the date that is ten (10) business days before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement)), (b) a brief description of (i) the business desired to be brought before such meeting, including the text of any resolution proposed for consideration by the stockholders, (ii) the reasons for conducting such business at the meeting and (iii) any material interest of such stockholder or beneficial owner or Stockholder Associated Person in such business, including a description of all agreements, arrangements and understandings between such stockholder or beneficial owner or Stockholder Associated Person and any other person(s) (including the name(s) of such other person(s)) in connection with or related to the proposal of such business by the stockholder, (c) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the proposal is made, (i) a statement as to whether either such stockholder or beneficial owner or Stockholder Associated Person intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to approve the proposal and/or otherwise to solicit proxies from stockholders in support of such proposal and (ii) any other information relating to such stockholder or beneficial owner or Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (d) if the matter such stockholder proposes to bring before any meeting of stockholders involves an amendment to the Corporation’s Bylaws, the specific wording of such proposed amendment, (e) a representation that the stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business and (f) such additional information that the Corporation may reasonably request regarding such stockholder or beneficial owner or Stockholder Associated Person, if any, and/or the business that such stockholder proposes to bring before the meeting. The foregoing notice requirements shall be deemed satisfied by a stockholder if the

 

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stockholder has notified the Corporation of his or her intention to present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.

 

(B) Special Meetings of Stockholders. Special meetings of the stockholders of the Corporation may be called only in the manner set forth in the Certificate of Incorporation. Only such business shall be conducted at a special meeting of stockholders as is a proper matter for stockholder action under Delaware law and as shall have been brought before the meeting pursuant to the Corporation’s notice of the special meeting given by or at the direction of the Board or by the Secretary (solely to the extent and in the manner provided by the Certificate of Incorporation). The notice of such special meeting shall include the purpose for which the meeting is called. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or by the Secretary (solely to the extent and in the manner provided by the Certificate of Incorporation) or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (a) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in paragraph (B) of this Section 11 of ARTICLE II is delivered to the Corporation’s Secretary and on the record date for the determination of stockholders entitled to vote at the special meeting, (b) is entitled to vote at the meeting and upon such election and (c) complies with the notice procedures set forth in subparagraph (2) of paragraph (A) of this Section 11 of ARTICLE II. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Section 11 of ARTICLE II shall be delivered to the Corporation’s Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall any adjournment, deferral or postponement of a special meeting or the public announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

 

(C) General.

 

(1)                                  Only such persons who are nominated in accordance with the procedures set forth in this Section 11 of ARTICLE II shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 11 of ARTICLE II. Notwithstanding the foregoing provisions of this Section 11 of ARTICLE II, if the stockholder (or a qualified

 

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representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. The requirements of this Section 11 of ARTICLE II shall apply to any business or nominations to be brought before an annual meeting by a stockholder whether such business or nominations are to be included in the Corporation’s proxy statement pursuant to Rule 14a-8 of the Exchange Act or presented to stockholders by means of an independently financed proxy solicitation. For purposes of this Section 11 of ARTICLE II, to be considered a “qualified representative” of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

 

(2)                                  For purposes of this section, “public announcement” shall mean disclosure in a press release reported by Dow Jones News Service, Associated Press or a comparable national news service in the United States or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

 

(3)                                  Notwithstanding the foregoing provisions of this Section 11 of ARTICLE II, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 11 of ARTICLE II.

 

(4)                                  Nothing in this Section 11 of ARTICLE II shall be deemed to (a) affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act, (b) confer upon any stockholder a right to have a nominee or any proposed business included in the Corporation’s proxy statement, or (c) affect any rights of the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

 

(5)                                  The chairman of the meeting of stockholders shall, if the facts warrant, determine and declare to the meeting that a nomination was not properly made or any business was not properly brought before the meeting, as the case may be, in accordance with the provisions of this Section 11 of ARTICLE II; if he or she should so determine, he or she shall so declare to the meeting and any such nomination not properly made or any business not properly brought before the meeting, as the case may be, shall not be transacted.

 

Section 12.                                     Fixing a Record Date for Stockholder Meetings . In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board

 

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of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 12 of ARTICLE II at the adjourned meeting.

 

Section 13.                                     Fixing a Record Date for Other Purposes . In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

Section 14.                                     Conduct of Meetings .

 

(a)                                  Generally . Meetings of stockholders shall be presided over by a chairman designated by the Board of Directors, or in his or her absence, by the Chairman of the Board, if any, or in the absence of the Chairman of the Board, by the Chief Executive Officer, or in the absence of the Chief Executive Officer, by the President, or in the absence of the President, by the Chief Financial Officer, or in the absence of all of the foregoing, by the most senior officer of the Corporation present at the meeting. The Secretary shall act as secretary of the meeting, but in the absence of the Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

(b)                                  Rules, Regulations and Procedures . The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the Corporation as it shall deem appropriate, including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining

 

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order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted. The chairman of the meeting shall have the power to adjourn the meeting to another place, if any, date and time or to recess the meeting.

 

(c)                                   Inspectors of Elections . The Corporation may, and to the extent required by law shall, in advance of any meeting of stockholders, appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the Corporation. No person who is a candidate for office at an election may serve as an inspector at such election. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of stock outstanding and the voting power of each such share, (ii) determine the shares of stock represented at the meeting and the validity of proxies and ballots, and (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors. The inspector may appoint or retain other persons or entities to assist the inspector in the performance of his or her duties. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders, the inspector may consider such information as is permitted by applicable law. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the number of shares of stock represented at the meeting and the result of the vote taken and of such other facts as may be required by law.

 

ARTICLE III
DIRECTORS

 

Section 1.                                            Number; Tenure; Qualifications . Subject to the Certificate of Incorporation, the total number of directors constituting the entire Board of Directors shall be fixed from time to time exclusively by resolutions adopted by the Board of Directors. The directors shall be classified in the manner provided in the Certificate of Incorporation. Each director shall hold office until such time as provided in the Certificate of Incorporation. Directors need not be stockholders.

 

Section 2.                                            General Powers . Except as otherwise provided by the Certificate of Incorporation or the General Corporation Law of the State of Delaware, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In

 

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addition to the powers and authority expressly conferred upon them by applicable law or by the Certificate of Incorporation or these Bylaws, the Board of Directors is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, except as otherwise specifically required by law or as otherwise provided in the Certificate of Incorporation.

 

Section 3.                                            Annual Meetings . Except as otherwise from time to time determined by resolution of the Board of Directors, an annual meeting of the Board of Directors shall be held without other notice than this Bylaw immediately after, and at the same place (if any) as, the annual meeting of stockholders.

 

Section 4.                                            Regular Meetings and Special Meetings . Regular meetings, other than the annual meeting, of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the Board of Directors. Special meetings of the Board of Directors may be called by the chairman of the board, the Chief Executive Officer or the President (in either case, if such person is a director) or upon the written request of at least a majority of the directors then in office.

 

Section 5.                                            Notice of Meetings . Notice of regular meetings of the Board of Directors need not be given except as otherwise required by law or these Bylaws, provided , however, that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be given promptly to each director who shall not have been present at the meeting at which such action was taken. Notice of each special or adjourned meeting of the Board of Directors, and of each regular and annual meeting of the Board of Directors for which notice shall be required, shall be given by the Secretary as hereinafter provided in this Section 5. Any such notice shall state the time and place of the meeting. Notice of any special or adjourned meeting, and of any regular or annual meeting for which notice is required, shall be given to each director at least (a) 24 hours before the meeting, if the notice is given by telephone, by delivery in person, or sent by telex, telecopy, electronic mail or similar means or (b) 5 days before the meeting if delivered by mail to the director’s residence or usual place of business. Such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage prepaid, or when transmitted if sent by telex, telecopy, email or similar means. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

 

Section 6.                                            Chairman of the Board, Quorum, Required Vote and Adjournment . The Board of Directors may elect from among its ranks, by the affirmative vote of a majority of the total number of directors then in office, a Chairman of the Board, who shall preside at all meetings of the Board of Directors at which he or she is present and shall have such powers and perform such duties as the Board of Directors may from time to time prescribe. If the Chairman of the Board is not present at a meeting of the Board of Directors, the Chief Executive Officer shall preside at such meeting (if the Chief Executive Officer is a director and is not also Chairman of the Board), and, if the Chief Executive Officer is not present at such meeting or is not a director, the President shall preside at such meeting (if the President is a director and is not also the Chairman of the Board or the Chief Executive Officer), and, if the President is not present at such meeting or is not a director, a majority of the directors present at such meeting then in office shall elect one of their members to so preside. A majority of the total number of

 

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directors shall constitute a quorum for the transaction of business. Unless by express provision of an applicable law, the Certificate of Incorporation or these Bylaws a different vote is required, the vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. A majority of directors present at any meeting of the Board of Directors, whether or not a quorum is present, may adjourn the meeting from time to time. At the adjourned meeting, the Board of Directors may transact any business which might have been transacted at the original meeting.

 

Section 7.                                            Committees . The Board of Directors (i) may designate one or more committees consisting of one or more of the directors of the Corporation and (ii) shall, during such period of time as any securities of the Corporation are listed on a national securities exchange, designate all committees required by the rules and regulations of such exchange. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. Except to the extent restricted by applicable law or the Certificate of Incorporation, each such committee, to the extent provided in the resolution creating it, shall have and may exercise all the powers and authority of the Board of Directors. Each such committee shall serve at the pleasure of the Board of Directors as may be determined from time to time by resolution adopted by the Board of Directors or as required by the rules and regulations of such exchange, if applicable. No committee shall have the power or authority: to approve or adopt, or recommend to the stockholders, any action or matter expressly required by the General Corporation Law of the State of Delaware to be submitted by the Board of Directors to the stockholders for approval; or to adopt, amend or repeal the Bylaws of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors upon request.

 

Section 8.                                            Committee Rules . Each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. In the absence of such rules of procedure, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to this Article III. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. All matters shall be determined by a majority vote of the members present. Unless otherwise provided in such a resolution, in the event that a member and that member’s alternate, if alternates are designated by the Board of Directors, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.

 

Section 9.                                            Telephonic and Other Meetings . Unless restricted by the Certificate of Incorporation, any one or more members of the Board of Directors or any committee thereof may participate in and act at any meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

 

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Section 10.                                     Waiver of Notice . Any director may waive notice of any meeting of the Board of Directors, or any committee thereof, by a written waiver signed by the director entitled to the notice, or a waiver by electronic transmission by the director entitled to notice, whether before or after the time stated therein. Attendance of a director at a meeting of the Board of Directors, or of any committee thereof, shall constitute a waiver of notice of such meeting, except when the director attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

 

Section 11.                                     Action by Written Consent . Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 12.                                     Compensation . The Board of Directors shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary or other compensation as a director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. Any director of the Corporation may decline any or all such compensation payable to such director in his or her discretion.

 

Section 13.                                     Reliance on Books and Records . A member of the Board of Directors, or a member of any committee designated by the Board of Directors shall, in the performance of such director’s duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board of Directors, or by any other person as to matters the director reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

 

Section 14.                                     Newly-Created Directorships; Vacancies; Removal; Resignation . Any newly-created directorships resulting from any increase in the number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office, or any other cause shall be filled, and any director may be removed from office, in the manner provided in the Certificate of Incorporation.  Any director may resign by delivering a resignation in writing or by electronic transmission to the Corporation. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event or events.

 

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Section 15.                                     Director Elections by Holders of Preferred Stock . Notwithstanding the foregoing, whenever the holders of any one or more series or classes of Preferred Stock shall have the right, voting separately by series or class, to elect one or more directors at an annual or special meeting of the stockholders, the election, filling of vacancies, removal of directors and other features of such one or more directorships shall be governed by the terms of such one or more series or classes of Preferred Stock to the extent permitted by law.

 

ARTICLE IV
OFFICERS

 

Section 1.                                            Number, Titles . The officers of the Corporation shall be elected by the Board of Directors and may consist of a Chief Executive Officer, a President, a Chief Financial Officer, one or more Vice Presidents, a Secretary and such other officers and assistant officers as may be deemed necessary or desirable by the Board of Directors. Any number of offices may be held by the same person, except that neither the Chief Executive Officer nor the President shall also hold the office of Secretary. In its discretion, the Board of Directors may choose not to fill any office for any period as it may deem advisable, except that the offices of President and Secretary shall be filled as expeditiously as possible.

 

Section 2.                                            Election and Term of Office . The officers of the Corporation shall be elected annually by the Board of Directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as convenient. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation, removal, disqualification, or retirement as hereinafter provided.

 

Section 3.                                            Resignation; Removal . Any officer may resign by delivering a resignation in writing or by electronic transmission to the Corporation.  Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event or events. Any officer or agent elected by the Board of Directors may be removed, with or without cause, by the Board of Directors at its sole discretion, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. The election or appointment of an officer shall not of itself create contract rights.

 

Section 4.                                            Vacancies . Any vacancy occurring in any office because of death, resignation, removal, disqualification, retirement or otherwise may be filled by the Board of Directors.

 

Section 5.                                            Compensation . Compensation of all executive officers shall be approved by the Board of Directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the Corporation; provided, however, that compensation of some or all executive officers may be determined by a committee established for that purpose if so authorized by the Board of Directors or as required by applicable law or any applicable rule or regulation, including any rule or regulation of any stock exchange upon which the Corporation’s securities are then listed for trading.

 

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Section 6.                                            Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction, and management of the business and affairs of the Corporation, including, without limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. The Chief Executive Officer shall see that all orders and resolutions of the Board of Directors are carried into effect. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors or as are set forth in the Certificate of Incorporation or these Bylaws. If the Board of Directors has not elected or appointed a President or the office of the President is otherwise vacant, and no officer otherwise functions with the powers and duties of the President, then, unless otherwise determined by the Board of Directors, the Chief Executive Officer shall also have all the powers and duties of the President.

 

Section 7.                                            The President . The President, if there is such an officer and the Board of Directors so directs, shall serve as chief operating officer and have the powers and duties customarily and usually associated with the office of chief operating officer unless the Board of Directors provides for another officer to serve as chief operating officer (or to have the powers and duties of chief operating officer). The President shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer. If the Board of Directors has not elected or appointed a Chief Executive Officer or the office of Chief Executive Officer is otherwise vacant, then, unless otherwise determined by the Board of Directors, the President shall also have all the powers and duties of the Chief Executive Officer.

 

Section 8.                                            Vice Presidents . Each Vice President shall have the powers and duties delegated to him or her by the Board of Directors or the President. One Vice President may be designated by the Board of Directors to perform the duties and exercise the powers of the President in the event of the President’s absence or disability.

 

Section 9.                                            The Secretary and Assistant Secretaries . The Secretary shall issue all authorized notices for, and shall keep minutes of, all meetings of the stockholders and the Board of Directors. He or she shall have charge of the corporate books and shall perform other duties as the Board of Directors may from time to time prescribe.

 

Any Assistant Secretary, if there is such an officer, shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer, President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors), shall perform the duties and exercise the powers of the Secretary.

 

Section 10.                                     The Chief Financial Officer, Treasurer and Assistant Treasurers . The Chief Financial Officer shall keep or cause to be kept the books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board of Directors, the Chief Executive Officer or the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the Corporation. The Chief

 

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Financial Officer shall perform other duties commonly incident to such office and shall also perform such other duties and have such other powers as the Board of Directors, the Chief Executive Officer or the President shall designate from time to time. The Chief Executive Officer or President may direct the Treasurer or any Assistant Treasurer, if there is such an officer, to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer shall perform other duties commonly incident to such office and shall also perform such other duties and have such other powers as the Board of Directors, the Chief Executive Officer or the President shall designate from time to time.

 

Section 11.                                     Other Officers, Assistant Officers and Agents . Officers, assistant officers and agents, if any, other than those whose duties are provided for in these Bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the Board of Directors.

 

Section 12.                                     Delegation of Authority . The Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select.

 

Section 13.                                     Officers’ Bonds or Other Security . If required by the Board of Directors, any officer of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety as the Board of Directors may require.

 

Section 14.                                     Absence or Disability of Officers . In the case of the absence or disability of any officer of the Corporation and of any person hereby authorized to act in such officer’s place during such officer’s absence or disability, the Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person selected by it.

 

ARTICLE V
STOCK

 

Section 1.                                            Uncertificated Shares; Certificated Shares . The shares of stock of the Corporation shall be uncertificated, provided that the Board of Directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be represented by certificates. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. If shares are represented by certificates, such certificates shall be in the form, other than bearer form, approved by the Board of Directors. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Corporation by, (i) the Chairman of the Board, or the President or Vice President and (ii) the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary. Any or all signatures on any such certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed, whose facsimile signature has been used on or who has duly affixed a facsimile signature or signatures to any such certificate or certificates shall cease to be such officer, transfer agent or registrar of the Corporation whether because of death, resignation or otherwise before such certificate or certificates have been issued by the Corporation, such certificate or certificates may nevertheless be issued as though the

 

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person or persons who signed such certificate or certificates, whose facsimile signature or signatures have been used thereon or who duly affixed a facsimile signature or signatures thereon had not ceased to be such officer, transfer agent or registrar of the Corporation. The rights and obligations of stockholders with the same class and/or series of stock shall be identical whether or not their shares are represented by certificates.

 

Section 2.                                            Transfers of Stock . Transfers of shares of stock of the Corporation shall be made only on the stock record of the Corporation by the holder of record thereof or by his, her or its attorney thereunto authorized by the power of attorney duly executed and filed with the Secretary of the Corporation or the transfer agent thereof. Certificated shares, if any, shall be transferred only upon surrender of the certificate or certificates representing such shares, properly endorsed or accompanied by a duly executed stock transfer power. Uncertificated shares shall be transferred by delivery of a duly executed stock transfer power, which certificate shall be canceled before a new certificate or uncertificated shares shall be issued. Registration of transfer of any shares shall be subject to applicable provisions of the Certificate of Incorporation and applicable law with respect to the transfer of such shares. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.  The Corporation may, but is not required, to recognize the transfer of fractional shares. The Board of Directors may make such additional rules and regulations as it may deem expedient concerning the issue and transfer of shares of stock of the Corporation.

 

Section 3.                                            Transfer Agent . The Board of Directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the Corporation.

 

Section 4.                                            Lost, Stolen or Destroyed Certificates . The Corporation may issue or direct a new certificate or certificates or uncertificated shares to be issued in place of any certificate or certificates previously issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, or of uncertificated shares, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, to give the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

Section 5.                                            Registered Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock of the Corporation to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner of such shares. The Corporation shall not be bound to recognize any equitable or other claim to or interest in any such shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

 

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ARTICLE VI
GENERAL PROVISIONS

 

Section 1.                                            Dividends . Subject to the provisions of the Certificate of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by the Board of Directors in accordance with applicable law. Dividends may be paid in cash, in property, in shares of the capital stock or in any combination thereof, subject to the provisions of applicable law and the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors may think conducive to the interests of the Corporation. The Board of Directors may modify or abolish any such reserves in the manner in which it was created.

 

Section 2.                                            Contracts . In addition to the powers otherwise granted to officers pursuant to ARTICLE IV hereof, the Board of Directors may authorize any officer or officers, or any agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority must be in writing or by electronic transmission and may be general or confined to specific instances.

 

Section 3.                                            Fiscal Year . The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

 

Section 4.                                            Corporate Seal . The Board of Directors may provide a corporate seal which shall be in the form as the Board of Directors shall from time to time determine. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Notwithstanding the foregoing, no seal shall be required by virtue of this section.

 

Section 5.                                            Voting Securities Owned By Corporation . Voting securities in any other Corporation held by the Corporation shall be voted (or consents in writing may be provided in respect thereof) by the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President, unless the Board of Directors specifically confers authority to vote (or express consent in writing) with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote or express consent with respect to such securities shall have the power to appoint proxies, with general power of substitution.

 

Section 6.                                            Inspection of Books and Records . The Board of Directors shall have power from time to time to determine to what extent and at what times and places and under what conditions and regulations the accounts and books of the Corporation, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware.

 

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Section 7.                                            Time Periods . Unless otherwise provided by applicable law, in applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded and the day of the event shall be included.

 

Section 8.                                            Section Headings . Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

 

Section 9.                                            Inconsistent Provisions . In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

 

Section 10.                                     Severability . If any provision (or any part thereof) of these Bylaws shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of these Bylaws (including, without limitation, each portion of any section of these Bylaws containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of these Bylaws (including, without limitation, each such containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Corporation to the fullest extent permitted by law.

 

ARTICLE VII
INDEMNIFICATION

 

Section 1.                                            Right to Indemnification . Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement, without limitation, as a witness) in any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that such person is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as an employee, legal representative or agent of the Corporation or as a director, officer, partner, member, trustee, administrator, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to an employee benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys’ fees and related disbursements, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended from time to time (“ERISA”), and any other penalties and amounts paid or to be paid in

 

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settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director or officer of the Corporation (or has ceased to serve, at the request of the Corporation, as an employee or agent of the Corporation or as a director, officer, partner, member, trustee, administrator, employee, legal representative or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to an employee benefit plan) and shall inure to the benefit of the indemnitee’s heirs, executors and administrators; provided, however, that, except as provided in Section 1 of this ARTICLE VII with respect to proceedings to enforce rights to indemnification (following the final disposition of such proceeding) or advancement of expenses, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized in the first instance by the Board of Directors of the Corporation. The right to indemnification conferred in this Section 1 of this ARTICLE VII shall be a contract right and shall include the obligation of the Corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition (an “advancement of expenses”); provided, however, that an advancement of expenses incurred by an indemnitee shall be made only upon delivery to the Corporation of an undertaking (an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 1 or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification and advancement of expenses to employees and agents of the Corporation with the same or lesser scope and effect as the foregoing indemnification and advancement of expenses of directors and officers.

 

Section 2.                                            Avista and Crestview Directors . The Corporation hereby acknowledges that the directors that are partners or employees of Avista or Crestview (“Avista and Crestview Directors”) have certain rights to indemnification, advancement of expenses and/or insurance provided by Avista and Crestview and certain affiliates that, directly or indirectly, (i) are controlled by, (ii) control or (iii) are under common control with, Avista or Crestview (collectively, the “Fund Indemnitors”). The Corporation hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the Avista and Crestview Directors are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Avista and Crestview Directors are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by the Avista and Crestview Directors and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this paragraph and the Bylaws of the Corporation from time to time (or any other agreement between the Corporation and the Avista and Crestview Directors), without regard to any rights the Avista and Crestview Directors may have against the Fund Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Corporation further agrees that no advancement or payment by the Fund Indemnitors on behalf of the Avista and Crestview Directors with respect to any claim for which the Avista and Crestview Directors have sought indemnification from the Corporation shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or to be subrogated to the extent of such advancement or payment to all of the rights of recovery of the

 

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Avista and Crestview Directors against the Corporation. The Corporation and the Avista and Crestview Directors agree that the Fund Indemnitors are express third-party beneficiaries of the terms of this paragraph.

 

Section 3.                                            Procedure for Indemnification . If a claim for indemnification under this Article VII (which may only be made following the final disposition of such proceeding) is not paid in full within sixty days after the Corporation has received a claim therefor by the indemnitee, or if a claim for any advancement of expenses under this Article VII is not paid in full within thirty days after the Corporation has received a statement or statements requesting such amounts to be advanced (provided that the indemnitee has delivered the undertaking contemplated by Section 1 of this Article VII), the indemnitee shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation to the fullest extent permitted by law. It shall be a defense to any action by a director or officer for indemnification or the advancement of expenses (other than an action brought to enforce a claim for the advancement of expenses where the undertaking required pursuant to Section 2 of this ARTICLE VII, if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its directors, a committee thereof, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because such person has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its directors, a committee thereof, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. The procedure for indemnification of other employees and agents of the Corporation for whom indemnification and advancement of expenses is provided pursuant to Section 1 of this ARTICLE VII shall be the same procedure set forth in this Section 3 for directors or officers of the Corporation, unless otherwise set forth in the action of the Board of Directors providing indemnification and advancement of expenses for such employees or agents of the Corporation.

 

Section 4.                                            Insurance . The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was or has agreed to become a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, against any expense, liability or loss asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such expenses, liability or loss under the General Corporation Law of the State of Delaware.

 

Section 5.                                            Service for Subsidiaries . Any person serving as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture or

 

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other enterprise, at least 50% of whose equity interests are owned directly or indirectly by the Corporation (a “subsidiary” for this ARTICLE VII) shall be conclusively presumed to be serving in such capacity at the request of the Corporation.

 

Section 6.                                            Reliance . Persons who after the date of the adoption of this provision become or remain directors or officers of the Corporation or who, while a director or officer of the Corporation, become or remain a director, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnification, advancement of expenses and other rights contained in this ARTICLE VII in entering into or continuing such service. The rights to indemnification and to the advancement of expenses conferred in this ARTICLE VII shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.

 

Section 7.                                            Other Rights; Continuation of Rights to Indemnification . The rights to indemnification and to the advancement of expenses conferred in this ARTICLE VII shall not be exclusive of any other right which any person may have or hereafter acquire under the Certificate of Incorporation, these Bylaws or under any statute, agreement, vote of stockholders or disinterested directors or otherwise. All rights to indemnification and to the advancement of expenses under this ARTICLE VII shall be deemed to be a contract between the Corporation and each indemnitee who serves or served in such capacity at any time while this ARTICLE VII is in effect. Any repeal or modification of this ARTICLE VII or any repeal or modification of relevant provisions of the General Corporation Law of the State of Delaware or any other applicable laws shall not in any way diminish any rights to indemnification and advancement of expenses of such indemnitee or the obligations of the Corporation arising hereunder with respect to any proceeding arising out of, or relating to, any actions, transactions or facts occurring prior to the final adoption of such repeal or modification.

 

Section 8.                                            Merger or Consolidation . For purposes of this ARTICLE VII, references to the “Corporation” shall include, in addition to the resulting or surviving corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this ARTICLE VII with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

 

Section 9.                                            Savings Clause . If this ARTICLE VII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and advance expenses to each person entitled to indemnification or advancement of expenses under Section 1 of this ARTICLE VII as to all expense, liability and loss (including attorneys’ fees and related disbursements, judgments, fines, ERISA excise taxes and penalties, and any other penalties and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such person and for which indemnification or advancement of expenses is available to such person pursuant to this ARTICLE VII to the fullest extent permitted

 

25



 

by any applicable portion of this ARTICLE VII that shall not have been invalidated and to the fullest extent permitted by applicable law.

 

ARTICLE VIII
AMENDMENTS

 

These Bylaws may be amended, altered, changed or repealed or new Bylaws adopted only in accordance with Article Nine, Section 2 of the Certificate of Incorporation.

 

26




Exhibit 5.1

 

 

 

601 Lexington Avenue

 

 

New York, New York 10022

 

 

 

 

 

(212) 446-4800

 

 

 

Facsimile:

 

www.kirkland.com

(212) 446-4900

 

 

 

 

 

 

 

May 15, 2017

 

 

WideOpenWest, Inc.

7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

 

Ladies and Gentlemen:

 

We are acting as special counsel to WideOpenWest, Inc., a Delaware corporation (the “ Company ”), in connection with the preparation and filing of a Registration Statement on Form S-1, originally filed with the Securities and Exchange Commission (the “ Commission ”) on March 23, 2017 (File No. 333-216894), under the Securities Act of 1933, as amended (the “ Act ”) (such Registration Statement, as amended or supplemented, is hereinafter referred to as the “ Registration Statement ”), relating to the proposed registration by the Company of up to 21,904,761 shares of the Company’s common stock, par value $0.01 per share (“ Common Stock ”), including shares of Common Stock sold pursuant to the underwriters’ option to purchase additional shares, if any. The shares of Common Stock to be sold by the Company and selling stockholders identified in the Registration Statement are referred to herein as the “ Shares ” and the offering of the Shares is referred to herein as the “ Offering .”

 

In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary for the purposes of this opinion, including (i) the Amended and Restated Certificate of Incorporation (the “ Charter ”) of the Company in the form filed as Exhibit 3.1 to the Registration Statement and to be filed with the Secretary of State of the State of Delaware prior to the sale of the Shares; (ii) the Amended and Restated Bylaws (the “ Bylaws ”) of the Company in the form filed as Exhibit 3.2 to the Registration Statement; (iii) the form of Underwriting Agreement filed as Exhibit 1.1 to the Registration Statement (the “ Underwriting Agreement ”); (iv) draft resolutions of the board of directors and stockholders of the Company with respect to the Offering (the “ Resolutions ”); and (v) the Registration Statement.

 

For purposes of this opinion, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of all documents submitted to us as copies. We have also assumed the legal capacity of all natural persons, the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority of such persons signing on behalf of the parties thereto and the due authorization, execution and delivery of all documents by the parties thereto other than the Company. We have not independently established or verified any facts relevant to the opinion expressed herein, but have

 

Beijing        Chicago        Hong Kong       Houston      London       Los Angeles       Munich      Palo Alto       San Francisco      Shanghai       Washington, D.C.

 



 

relied upon statements and representations of officers and other representatives of the Company and others as to factual matters.

 

Based upon and subject to the foregoing qualifications, assumptions and limitations and the further limitations set forth below, we are of the opinion that, when (i) the Resolutions and Bylaws are adopted by the board of directors and stockholders of the Company, as applicable, (ii) the final Underwriting Agreement is duly executed and delivered by the parties thereto, (iii) the Charter is validly adopted and filed with the Secretary of State of the State of Delaware and (iv) the Registration Statement becomes effective under the Act, the Shares will be duly authorized and validly issued, fully paid and nonassessable.

 

Our opinions expressed above are subject to the qualifications that we express no opinion as to the applicability of, compliance with, or effect of any laws except the General Corporation Law of the State of Delaware.

 

We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. We also consent to the reference to our firm under the heading “Legal Matters” in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission.

 

We do not find it necessary for the purposes of this opinion, and accordingly we do not purport to cover herein, the application of the securities or “Blue Sky” laws of the various states to the Offering.

 

This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. We assume no obligation to revise or supplement this opinion should the General Corporation Law of the State of Delaware be changed by legislative action, judicial decision or otherwise.

 

This opinion is furnished to you in connection with the filing of the Registration Statement.

 

 

Sincerely,

 

 

 

/s/ KIRKLAND & ELLIS LLP

 


 



Exhibit 10.8

 

WideOpenWest, Inc.
7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

 

Cathy Kuo
2655 East Tennessee Ave
Denver, CO  80209

 

Re:                              Letter Agreement of Employment

 

Dear Cathy Kuo:

 

The purpose of this letter is to formalize the terms and conditions of your employment, and your employment relationship, with WideOpenWest, Inc. (and together with its subsidiaries, the “Company”).  Your execution of this letter (this “Agreement”) will represent your acceptance of all of the terms set forth below.  We are pleased to present this offer to you for your consideration.

 

Nature of Agreement and Relationship :  This Agreement does not represent an employment contract for any specified term.  Your employment relationship thus will remain “at-will,” meaning that, subject to the terms hereof, the Company may terminate your employment without Cause (as defined below) upon 14 days’ prior notice; provided that the Company may terminate your employment at any time for Cause without notice.  You may terminate your employment with 14 days’ prior notice.

 

Job Title and Duties :  Your job title will continue to be Executive Vice President, Strategy & Engagement, and you will be expected to devote all of your business time and efforts to the performance of the duties and responsibilities normally associated with this position, including those that will from time-to-time be assigned to you by the Chief Executive Officer.  Notwithstanding the foregoing, you will be permitted to serve on the boards of directors of charitable organizations and perform charitable activities that do not interfere in any material manner with your duties under this Agreement.

 

Salary and Bonuses :  Your base salary is equal to the same rate as in effect on the date hereof for fiscal 2017 (“Base Salary”) and shall be pro rated based on the number of days remaining in fiscal 2017 divided by 365; provided that thereafter your Base Salary shall be subject to annual review for increase only.  You will be paid in accordance with the Company’s normal payroll policies and practices, with all applicable deductions being withheld from your paychecks.  In addition to this Base Salary, you will be eligible for an annual performance bonus with a target bonus opportunity of 40% of your Base Salary, pursuant to formulas that may be established by the Company’s Board of Directors (the “Board”) in its sole discretion, and communicated to you upon their establishment.  Such formulae will be based upon annual budgeted EBITDA, and the Board may also take into consideration, in its sole discretion, achievement of budgeted customer retention and acquisition and customer satisfaction ratings.    Any annual bonus shall be subject to the approval of the Compensation Committee of the Board after consultation with the Company’s Chief Executive Officer.

 

1



 

Reimbursement of Expenses :  The Company will reimburse you for all reasonable expenses you incur in the course of performing your duties under this Agreement that are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

 

Employee Benefits :  You will be entitled to participate in all employee benefits plans or programs offered to executives of the Company (the “Benefits Plans”), including insurance programs, vacation and other leave benefits, savings, deferred compensation or retirement plans, merchandise discounts and business expense procedures.  As of the date of this Agreement, the Benefits Plans currently offered to Company executives are summarized in the attached Exhibit A.  Plan documents setting forth terms of certain of the Benefits Plans are available upon request.  Your execution of this Agreement represents your acknowledgement and understanding that the plan documents control all questions of interpretation of applicable Benefits Plans, and that the Benefits Plans are subject to modification or termination by the Company at any time, at its sole discretion.

 

Section 409A :  In the event that any amount due to you under this Agreement or other arrangement with the Company is deemed to be deferred compensation pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the parties agree to make such amendments as are necessary to comply with the requirements of Code Section 409A, so long as such amendments do not impose a material financial burden on the Company.

 

Severance :  Upon your termination of employment by the Company without “Cause” or for “Good Reason,” each as defined below, but subject to your performance of all post-employment obligations set forth in this Agreement, you will be entitled to receive severance pay in the amount of 1.0 times your then-current Base Salary.  This severance, which will be subject to applicable deductions required by law, will be paid in equal installments on the Company’s regular payroll dates for the 12 month period following your termination date.  For purposes of this Agreement, “Cause” shall mean your (i) conviction, guilty plea, or plea of “no contest” to any felony or other crime involving moral turpitude, (ii) commission of any act involving dishonesty or fraud with respect to the Company, (iii) engaging in any conduct bringing the Company (or its officers or directors) into public disgrace or disrepute, (iv) gross negligence or willful misconduct with respect to the Company, (v) substantial and repeated failure to perform the duties of your position, after being given written notice and reasonable opportunity to cure such deficiency (but only if such deficiency is subject to cure), or (vi) any material breach of this Agreement.  For purposes of this Agreement, “Good Reason” shall mean (x) an assignment of duties to you that are materially inconsistent with your title and position, or any other action by the Company that results in a significant diminution in your title, position, authority or responsibilities in effect as of the date hereof, which reduction has not been remedied by the Company within 45 days after written notification to the Company containing a reasonably detailed description of such reduction, or (y) you are required to relocate outside of a 40 mile radius from your current work location to perform your duties, provided that reasonable travel required by the Company shall not be considered a relocation for this purpose.

 

Confidential Information; Intellectual Property :  You acknowledge and agree that, as a result of your employment, you will have access to trade secrets and other confidential or proprietary

 

2



 

information of the Company and its customers and vendors (“Confidential Information”).  Such information includes, but is not limited to:  (i) customers and clients and customer or client lists, (ii) accounting and business methods, (iii) services or products and the marketing of such services and products, (iv) fees, costs and pricing structures, (v) designs, (vi) analysis, (vii) drawings, photographs and reports, (viii) computer software, including operating systems, applications and program listings, (ix) flow charts, manuals and documentation, (x) databases, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) copyrightable works, (xiii) all technology and trade secrets, and (xiv) all similar and related information in whatever form.  You agree that you shall not disclose or use at any time, either during your employment with the Company or thereafter, any Confidential Information, except to the extent that such disclosure or use is directly related to the Company’s business, or unless required to by law, or unless and to the extent that the Confidential Information in question has become generally known to and available for use by the public other than as a result of your acts or omissions to act.  In addition, you further agree that any invention, design or innovation that you conceive or devise from your use of Company time, equipment, facilities or support services belong exclusively to the Company, and that it may not be used for your personal benefit, the benefit of a competitor, or for the benefit of any person or entity other than the Company.

 

Corporate Opportunities : Notwithstanding anything contained herein to the contrary, you agree that, as a result of your employment, that you shall have a duty and obligation to bring any “corporate opportunity” to the Company as such duty to bring such opportunity is construed under the laws of the State of New York.

 

Non-Solicitation; Non-Competition :  You agree that if you leave the employ of the Company for any reason, for a period of 12 months (the “No-Raid Period”) following such separation you will not directly or indirectly solicit, induce or attempt to influence any associate to leave the employment of the Company, nor will you hire any such associate or assist any other person or entity in doing so (each such activity, a “Raiding Activity”).  If you resign your employment, or if your employment is terminated for Cause, for a period of 12 months following such separation you will not, directly or indirectly, work for or contribute to the efforts of any business organization that competes, or plans to compete, with the Company or its products, nor will you call on or otherwise attempt (or assist the attempt) to solicit the business of any customer or client of the Company with whom you had direct contact or supervisory authority (each such activity, a “Competitive Activity”) in the 12-month period immediately preceding your separation (the “Non-Competition Period”) .  You specifically acknowledge the reasonableness of these post-employment restrictions, and along with the Company, authorize any court of competent jurisdiction to reform these restrictions to the minimum extent necessary, in the event such court finds any of these restrictions to be unreasonable.

 

Company Property :  Upon your termination of employment for any reason, you will promptly return to the Company all Company-related documents and Company property within your possession or control.

 

Release of Company and Related Entities :  Your execution of this Agreement represents your full and final release of any claim that might be brought against the Company or Avista Capital Partners, their subsidiaries and their respective affiliates and predecessor, including any of the

 

3



 

officers, directors, agents or representatives of the aforementioned entities, relating to the terms of your previous employment with the Company.  You specifically acknowledge that this release covers and releases any claim that might be brought under any previous employment Offer Letter or Confidentiality and Non-Competition Agreement you may have signed with the Company, Racecar Holdings, LLC or any predecessor.  Notwithstanding the foregoing, this release shall not preclude or otherwise limit your rights or claims to benefits arising under an employee benefit plan.

 

Whistleblower :  You understand that nothing contained in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). You further understand that this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit your right to receive an award for information provided to any Government Agencies.

 

Trade Secrets : 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

 

Disputes :  Except as set forth in this paragraph, any dispute, claim or difference arising out of or in relation to your employment will be settled exclusively by binding arbitration in accordance with the rules of the Federal Mediation and Conciliation Service (“FMCS”).  The arbitration will be held in New York, New York unless you and the Company (each a “Party,” and jointly, the “Parties”) mutually agree otherwise.  Nothing contained in this “Disputes” Section will be construed to limit or preclude a Party from bringing any action in any court of competent jurisdiction for injunctive or other provisional relief to compel another party to comply with its obligations under this Agreement or any other agreement between or among the Parties during the pendency of the arbitration proceedings.  Each Party shall bear its own costs and fees of the arbitration, and the fees and expenses of the arbitrator will be borne equally by the parties;  provided, however , that the arbitrator shall be empowered to require any one or more of the Parties to bear all or any portion of fees and expenses of the Parties and/or the fees and expenses of the arbitrator in the event that the arbitrator determines such Party has acted in bad faith.   The arbitrator shall have the authority to award any remedy or relief that a Court of the State of New York could order or grant.  The decision and award of the arbitrator shall be binding on all Parties.  Either Party to the arbitration may seek to have the ruling of the arbitrator entered in any

 

4



 

court having jurisdiction thereof.  Each Party agrees that it will not file suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by an arbitrator and except to seek the issuance of an injunction or temporary restraining order pending a final determination by the arbitrator.

 

Entire Agreement :  This Agreement (including those documents incorporated herein) constitutes your entire agreement with the Company relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or arrangements with the Company, including the letter agreement dated April 27, 2006, by and between you and Racecar Holdings, LLC.

 

Amendment .  The provisions of this Agreement may be amended or waived only with the prior written consent of you and the Company.

 

Governing Law :  All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law in conflict with law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

 

* * *

 

[signature pages follow]

 

5



 

Sincerely:

 

 

 

 

 

WIDEOPENWEST, INC.

 

 

 

 

 

 

 

By:

/s/ Steven Cochran

 

Dated:

May 15, 2017

Name: Steven Cochran

 

 

 

Its: Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

/s/ Cathy Kuo

 

Dated:

May 15, 2017

Cathy Kuo

 

 

 

 

6




Exhibit 10.9

 

WideOpenWest, Inc.
7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

 

Craig Martin
9404 Whim Trail
Richland, MI  49083

 

Re:                              Letter Agreement of Employment

 

Dear Craig Martin:

 

The purpose of this letter is to formalize the terms and conditions of your employment, and your employment relationship, with WideOpenWest, Inc. (and together with its subsidiaries, the “Company”).  Your execution of this letter (this “Agreement”) will represent your acceptance of all of the terms set forth below.  We are pleased to present this offer to you for your consideration.

 

Nature of Agreement and Relationship :  This Agreement does not represent an employment contract for any specified term.  Your employment relationship thus will remain “at-will,” meaning that, subject to the terms hereof, the Company may terminate your employment without Cause (as defined below) upon 14 days’ prior notice; provided that the Company may terminate your employment at any time for Cause without notice.  You may terminate your employment with 14 days’ prior notice.

 

Job Title and Duties :  Your job title will continue to be General Counsel, and you will be expected to devote all of your business time and efforts to the performance of the duties and responsibilities normally associated with this position, including those that will from time-to-time be assigned to you by the Chief Executive Officer.  Notwithstanding the foregoing, you will be permitted to serve on the boards of directors of charitable organizations and perform charitable activities that do not interfere in any material manner with your duties under this Agreement.

 

Salary and Bonuses :  Your base salary is equal to the same rate as in effect on the date hereof for fiscal 2017 (“Base Salary”) and shall be pro rated based on the number of days remaining in fiscal 2017 divided by 365; provided that thereafter your Base Salary shall be subject to annual review for increase only.  You will be paid in accordance with the Company’s normal payroll policies and practices, with all applicable deductions being withheld from your paychecks.  In addition to this Base Salary, you will be eligible for an annual performance bonus with a target bonus opportunity of 40% of your Base Salary, pursuant to formulas that may be established by the Company’s Board of Directors (the “Board”) in its sole discretion, and communicated to you upon their establishment.  Such formulae will be based upon annual budgeted EBITDA, and the Board may also take into consideration, in its sole discretion, achievement of budgeted customer retention and acquisition and customer satisfaction ratings.    Any annual bonus shall be subject

 

1



 

to the approval of the Compensation Committee of the Board after consultation with the Company’s Chief Executive Officer.

 

Reimbursement of Expenses :  The Company will reimburse you for all reasonable expenses you incur in the course of performing your duties under this Agreement that are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

 

Employee Benefits :  You will be entitled to participate in all employee benefits plans or programs offered to executives of the Company (the “Benefits Plans”), including insurance programs, vacation and other leave benefits, savings, deferred compensation or retirement plans, merchandise discounts and business expense procedures.  As of the date of this Agreement, the Benefits Plans currently offered to Company executives are summarized in the attached Exhibit A.  Plan documents setting forth terms of certain of the Benefits Plans are available upon request.  Your execution of this Agreement represents your acknowledgement and understanding that the plan documents control all questions of interpretation of applicable Benefits Plans, and that the Benefits Plans are subject to modification or termination by the Company at any time, at its sole discretion.

 

Section 409A :  In the event that any amount due to you under this Agreement or other arrangement with the Company is deemed to be deferred compensation pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the parties agree to make such amendments as are necessary to comply with the requirements of Code Section 409A, so long as such amendments do not impose a material financial burden on the Company.

 

Severance :  Upon your termination of employment by the Company without “Cause” or for “Good Reason,” each as defined below, but subject to your performance of all post-employment obligations set forth in this Agreement, you will be entitled to receive severance pay in the amount of 1.0 times your then-current Base Salary.  This severance, which will be subject to applicable deductions required by law, will be paid in equal installments on the Company’s regular payroll dates for the 12 month period following your termination date.  For purposes of this Agreement, “Cause” shall mean your (i) conviction, guilty plea, or plea of “no contest” to any felony or other crime involving moral turpitude, (ii) commission of any act involving dishonesty or fraud with respect to the Company, (iii) engaging in any conduct bringing the Company (or its officers or directors) into public disgrace or disrepute, (iv) gross negligence or willful misconduct with respect to the Company, (v) substantial and repeated failure to perform the duties of your position, after being given written notice and reasonable opportunity to cure such deficiency (but only if such deficiency is subject to cure), or (vi) any material breach of this Agreement.  For purposes of this Agreement, “Good Reason” shall mean (x) an assignment of duties to you that are materially inconsistent with your title and position, or any other action by the Company that results in a significant diminution in your title, position, authority or responsibilities in effect as of the date hereof, which reduction has not been remedied by the Company within 45 days after written notification to the Company containing a reasonably detailed description of such reduction, or (y) you are required to relocate outside of a 40 mile radius from your current work location to perform your duties, provided that reasonable travel required by the Company shall not be considered a relocation for this purpose.

 

2



 

Confidential Information; Intellectual Property :  You acknowledge and agree that, as a result of your employment, you will have access to trade secrets and other confidential or proprietary information of the Company and its customers and vendors (“Confidential Information”).  Such information includes, but is not limited to:  (i) customers and clients and customer or client lists, (ii) accounting and business methods, (iii) services or products and the marketing of such services and products, (iv) fees, costs and pricing structures, (v) designs, (vi) analysis, (vii) drawings, photographs and reports, (viii) computer software, including operating systems, applications and program listings, (ix) flow charts, manuals and documentation, (x) databases, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) copyrightable works, (xiii) all technology and trade secrets, and (xiv) all similar and related information in whatever form.  You agree that you shall not disclose or use at any time, either during your employment with the Company or thereafter, any Confidential Information, except to the extent that such disclosure or use is directly related to the Company’s business, or unless required to by law, or unless and to the extent that the Confidential Information in question has become generally known to and available for use by the public other than as a result of your acts or omissions to act.  In addition, you further agree that any invention, design or innovation that you conceive or devise from your use of Company time, equipment, facilities or support services belong exclusively to the Company, and that it may not be used for your personal benefit, the benefit of a competitor, or for the benefit of any person or entity other than the Company.

 

Corporate Opportunities : Notwithstanding anything contained herein to the contrary, you agree that, as a result of your employment, that you shall have a duty and obligation to bring any “corporate opportunity” to the Company as such duty to bring such opportunity is construed under the laws of the State of New York.

 

Non-Solicitation; Non-Competition :  You agree that if you leave the employ of the Company for any reason, for a period of 12 months (the “No-Raid Period”) following such separation you will not directly or indirectly solicit, induce or attempt to influence any associate to leave the employment of the Company, nor will you hire any such associate or assist any other person or entity in doing so (each such activity, a “Raiding Activity”).  If you resign your employment, or if your employment is terminated for Cause, for a period of 12 months following such separation you will not, directly or indirectly, work for or contribute to the efforts of any business organization that competes, or plans to compete, with the Company or its products, nor will you call on or otherwise attempt (or assist the attempt) to solicit the business of any customer or client of the Company with whom you had direct contact or supervisory authority (each such activity, a “Competitive Activity”) in the 12-month period immediately preceding your separation (the “Non-Competition Period”) .  You specifically acknowledge the reasonableness of these post-employment restrictions, and along with the Company, authorize any court of competent jurisdiction to reform these restrictions to the minimum extent necessary, in the event such court finds any of these restrictions to be unreasonable.

 

Company Property :  Upon your termination of employment for any reason, you will promptly return to the Company all Company-related documents and Company property within your possession or control.

 

3



 

Release of Company and Related Entities :  Your execution of this Agreement represents your full and final release of any claim that might be brought against the Company or Avista Capital Partners, their subsidiaries and their respective affiliates and predecessor, including any of the officers, directors, agents or representatives of the aforementioned entities, relating to the terms of your previous employment with the Company.  You specifically acknowledge that this release covers and releases any claim that might be brought under any previous employment Offer Letter or Confidentiality and Non-Competition Agreement you may have signed with the Company, WideOpenWest Holdings, LLC (f/k/a Racecar Holdings, LLC) or any predecessor.  Notwithstanding the foregoing, this release shall not preclude or otherwise limit your rights or claims to benefits arising under an employee benefit plan.

 

Whistleblower :  You understand that nothing contained in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). You further understand that this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit your right to receive an award for information provided to any Government Agencies.

 

Trade Secrets : 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

 

Disputes :  Except as set forth in this paragraph, any dispute, claim or difference arising out of or in relation to your employment will be settled exclusively by binding arbitration in accordance with the rules of the Federal Mediation and Conciliation Service (“FMCS”).  The arbitration will be held in New York, New York unless you and the Company (each a “Party,” and jointly, the “Parties”) mutually agree otherwise.  Nothing contained in this “Disputes” Section will be construed to limit or preclude a Party from bringing any action in any court of competent jurisdiction for injunctive or other provisional relief to compel another party to comply with its obligations under this Agreement or any other agreement between or among the Parties during the pendency of the arbitration proceedings.  Each Party shall bear its own costs and fees of the arbitration, and the fees and expenses of the arbitrator will be borne equally by the parties;  provided, however , that the arbitrator shall be empowered to require any one or more of the Parties to bear all or any portion of fees and expenses of the Parties and/or the fees and expenses of the arbitrator in the event that the arbitrator determines such Party has acted in bad faith.   The

 

4



 

arbitrator shall have the authority to award any remedy or relief that a Court of the State of New York could order or grant.  The decision and award of the arbitrator shall be binding on all Parties.  Either Party to the arbitration may seek to have the ruling of the arbitrator entered in any court having jurisdiction thereof.  Each Party agrees that it will not file suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by an arbitrator and except to seek the issuance of an injunction or temporary restraining order pending a final determination by the arbitrator.

 

Entire Agreement :  This Agreement (including those documents incorporated herein) constitutes your entire agreement with the Company relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or arrangements with the Company, including the letter agreement dated April 27, 2006, by and between you and WideOpenWest Holdings, LLC (f/k/a Racecar Holdings, LLC).

 

Amendment .  The provisions of this Agreement may be amended or waived only with the prior written consent of you and the Company.

 

Governing Law :  All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law in conflict with law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

 

* * *

 

[signature pages follow]

 

5



 

Sincerely:

 

 

 

 

 

WIDEOPENWEST, INC.

 

 

 

 

 

 

 

By:

/s/ Steven Cochran

 

Dated:

May 15, 2017

Name: Steven Cochran

 

 

 

Its: Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

/s/ Craig Martin

 

Dated:

May 15, 2017

Craig Martin

 

 

 

 

6




Exhibit 10.10

 

WideOpenWest, Inc.
7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

 

Mr. Cash Hagen

615 Alberosky Way

Batavia, IL 60510

 

Re:          Letter Agreement of Employment

 

Dear Cash:

 

The purpose of this letter is to formalize the terms and conditions of your employment, and your employment relationship, with WideOpenWest, Inc. (together with its subsidiaries, the “Company”). Your execution of this letter (this “Agreement”) will represent your acceptance of all of the terms set forth below. We are pleased to present this offer to you for your consideration.

 

Nature of Agreement and Relationship : This Agreement does not represent an employment contract for any specified term. Your employment relationship thus will remain “at­will,” meaning that, subject to the terms hereof, the Company may terminate your employment without Cause (as defined below) upon 14 days’ prior notice; provided that the Company may terminate your employment at any time for Cause without notice. You may terminate your employment with 14 days’ prior notice.

 

Job Title and Duties : Your job title will continue to be Chief Operating Officer and you will be expected to devote all of your business time and efforts to the performance of the duties and responsibilities normally associated with this position, including those that will from time-to­time be assigned to you by the Chief Executive Officer and any others within the Company to whom he may delegate from time to time. Notwithstanding the foregoing, you will be permitted to serve on the boards of directors of charitable organizations and perform charitable activities that do not interfere in any material manner with your duties under this Agreement.

 

Salary and Bonuses : Your base salary is equal to the same rate as in effect on the date hereof for fiscal 2017 (“Base Salary”) and shall be pro rated based on the number of days remaining in fiscal 2017 divided by 365; provided that thereafter your Base Salary shall be subject to annual review for increase only. You will be paid in accordance with the Company’s normal payroll policies and practices, with all applicable deductions being withheld from your paychecks. In addition to this Base Salary, you will be eligible for an annual performance bonus with a target bonus opportunity of 40% of Base Salary, pursuant to formulas that may be established by the Company in its sole discretion, and communicated to you upon their establishment. Such formulae will be based upon annual budgeted EBITDA, and the Company may also take into consideration, in its sole discretion, achievement of budgeted customer retention and acquisition and customer satisfaction ratings.

 



 

Reimbursement of Expenses : The Company will reimburse you for all reasonable expenses you incur in the course of performing your duties under this Agreement that are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

 

Employee Benefits : You will be entitled to participate in all employee benefits plans or programs offered to executives of the Company (the “Benefits Plans”), including insurance programs, vacation and other leave benefits, savings, deferred compensation or retirement plans, merchandise discounts and business expense procedures. As of the date of this Agreement, the Benefits Plans currently offered to Company executives are summarized in the attached Exhibit A. Plan documents setting forth terms of certain of the Benefits Plans are available upon request. Your execution of this Agreement represents your acknowledgement and understanding that the plan documents control all questions of interpretation of applicable Benefits Plans, and that the Benefits Plans are subject to modification or termination by the Company at any time, at its sole discretion.

 

Section 409A : In the event that any amount due to you under this Agreement or other arrangement with the Company is deemed to be deferred compensation pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the parties agree to make such amendments as are necessary to comply with the requirements of Code Section 409A, so long as such amendments do not impose a material financial burden on the Company.

 

Severance : Upon your termination of employment by the Company without “Cause” or for “Good Reason,” each as defined below, but subject to your performance of all post­employment obligations set forth in this Agreement, you will be entitled to receive severance pay in the amount of 1.0 times your then­current Base Salary. This severance, which will be subject to applicable deductions required by law, will be paid in equal installments on the Company’s regular payroll dates for the twelve (12) month period following your termination date. For purposes of this Agreement, “Cause” shall mean your (i) conviction, guilty plea, or plea of “no contest” to any felony or other crime involving moral turpitude, (ii) commission of any act involving dishonesty or fraud with respect to the Company, (iii) engaging in any conduct bringing the Company (or its officers or directors) into public disgrace or disrepute, (iv) gross negligence or willful misconduct with respect to the Company, (v) substantial and repeated failure to perform the duties of your position, or (vi) any material breach of this Agreement. For purposes of this Agreement, “Good Reason” shall mean an assignment of duties to you that are materially inconsistent with your title and position, or any other action by the Company that results in a significant diminution in your title, position, authority or responsibilities in effect as of the date hereof.

 

Confidential Information; Intellectual Property : You acknowledge and agree that, as a result of your employment, you will have access to trade secrets and other confidential or proprietary information of the Company and its customers and vendors (“Confidential Information”). Such information includes, but is not limited to: (i) customers and clients and customer or client lists, (ii) accounting and business methods, (iii) services or products and the marketing of such services and products, (iv) fees, costs and pricing structures, (v) designs, (vi) analysis, (vii) drawings, photographs and reports, (viii) computer software, including operating systems,

 

2



 

applications and program listings, (ix) flow charts, manuals and documentation, (x) databases, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) copyrightable works, (xiii) all technology and trade secrets, and (xiv) all similar and related information in whatever form. You agree that you shall not disclose or use at any time, either during your employment with the Company or thereafter, any Confidential Information, except to the extent that such disclosure or use is directly related to the Company’s business, or unless required to by law, or unless and to the extent that the Confidential Information in question has become generally known to and available for use by the public other than as a result of your acts or omissions to act. In addition, you further agree that any invention, design or innovation that you conceive or devise from your use of Company time, equipment, facilities or support services belong exclusively to the Company, and that it may not be used for your personal benefit, the benefit of a competitor, or for the benefit of any person or entity other than the Company.

 

Corporate Opportunities : Notwithstanding anything contained herein to the contrary, you agree that, as a result of your employment, that you shall have a duty and obligation to bring any “corporate opportunity” to the Company as such duty to bring such opportunity is construed under the laws of the State of New York.

 

Non­Solicitation; Non­Competition : You agree that if you leave the employ of the Company for any reason, for a period of twelve (12) months (the “No­Raid Period”) following such separation you will not directly or indirectly solicit, induce or attempt to influence any associate to leave the employment of the Company, nor will you hire any such associate or assist any other person or entity in doing so (each such activity, a “Raiding Activity”). If you resign your employment, or if your employment is terminated for Cause, for a period of twelve (12) months following such separation you will not, directly or indirectly, work for or contribute to the efforts of any business organization that competes, or plans to compete, with the Company or its products, nor will you call on or otherwise attempt (or assist the attempt) to solicit the business of any customer or client of the Company with whom you had direct contact or supervisory authority (each such activity, a “Competitive Activity”) in the 12­month period immediately preceding your separation (the “Non­Competition Period”). You specifically acknowledge the reasonableness of these post­employment restrictions, and along with the Company, authorize any court of competent jurisdiction to reform these restrictions to the minimum extent necessary, in the event such court finds any of these restrictions to be unreasonable.

 

Company Property : Upon your termination of employment for any reason, you will promptly return to the Company all Company­related documents and Company property within your possession or control.

 

Whistleblower : You understand that nothing contained in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). You further understand that this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including

 

3



 

providing documents or other information, without notice to the Company. This Agreement does not limit your right to receive an award for information provided to any Government Agencies.

 

Trade Secrets : 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

 

Disputes : Except as set forth in this paragraph, any dispute, claim or difference arising out of or in relation to your employment will be settled exclusively by binding arbitration in accordance with the rules of the Federal Mediation and Conciliation Service (“FMCS”). The arbitration will be held in New York, New York unless you and the Company (each a “Party,” and jointly, the “Parties”) mutually agree otherwise. Nothing contained in this “Disputes” Section will be construed to limit or preclude a Party from bringing any action in any court of competent jurisdiction for injunctive or other provisional relief to compel another party to comply with its obligations under this Agreement or any other agreement between or among the Parties during the pendency of the arbitration proceedings. Each Party shall bear its own costs and fees of the arbitration, and the fees and expenses of the arbitrator will be borne equally by the parties; provided, however , that the arbitrator shall be empowered to require any one or more of the Parties to bear all or any portion of fees and expenses of the Parties and/or the fees and expenses of the arbitrator in the event that the arbitrator determines such Party has acted in bad faith. The arbitrator shall have the authority to award any remedy or relief that a Court of the State of New York could order or grant. The decision and award of the arbitrator shall be binding on all Parties. Either Party to the arbitration may seek to have the ruling of the arbitrator entered in any court having jurisdiction thereof. Each Party agrees that it will not file suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by an arbitrator and except to seek the issuance of an injunction or temporary restraining order pending a final determination by the arbitrator.

 

Entire Agreement : This Agreement (including those documents incorporated herein) constitutes your entire agreement with the Company relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or arrangements with the Company including the letter agreement dated March 14, 2008 between you and WideOpenWest Network LLC..

 

Amendment . The provisions of this Agreement may be amended or waived only with the prior written consent of you and the Company.

 

4



 

Governing Law : All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law in conflict with law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

 

* * *

 

5



 

Sincerely:

 

 

 

WIDEOPENWEST, INC.

 

 

 

 

 

By:

/s/ Steven Cochran

 

Dated:

May 15, 2017

Name: Steven Cochran

 

Its: Chief Executive Officer

 

 

 

 

 

/s/ Cash Hagen

 

Dated:

May 15, 2017

Cash Hagen

 

 

6




Exhibit 10.11

 

WideOpenWest, Inc.
7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

 

Mr. Richard E. Fish, Jr.
5452 S. Geneva St.
Englewood, CO 80111

 

Re:          Letter Agreement of Employment

 

Dear Rich:

 

The purpose of this letter is to formalize the terms and conditions of your employment, and your employment relationship, with WideOpenWest, Inc. (together with its subsidiaries, the “Company”). Your execution of this letter (this “Agreement”), which will be deemed effective as of the date of this letter, will represent your acceptance of all of the terms set forth below. We are pleased to present this offer to you for your consideration.

 

Nature of Agreement and Relationship : This Agreement does not represent an employment contract for any specified term. Your employment relationship thus will remain “at­will,” meaning that, subject to the terms hereof, the Company may terminate your employment without Cause (as defined below) upon 14 days’ prior notice; provided that the Company may terminate your employment at any time for Cause without notice. You may terminate your employment with 14 days’ prior notice.

 

Job Title and Duties : Your job title will continue to be Chief Financial Officer and you will be expected to devote all of your business time and efforts to the performance of the duties and responsibilities normally associated with this position, including those that will from time-to­time be assigned to you by the Chief Executive Officer and any others within the Company to whom he may delegate from time to time. Notwithstanding the foregoing, you will be permitted to serve on the boards of directors of charitable organizations and perform charitable activities that do not interfere in any material manner with your duties under this Agreement.

 

Salary and Bonuses : Your base salary is equal to the same rate as in effect on the date hereof for fiscal year 2017 (“Base Salary”) and shall be pro-rated based on the number of days remaining in fiscal 2017 divided by 365; provided that thereafter your Base Salary shall be subject to annual review for increase only. You will be paid in accordance with the Company’s normal payroll policies and practices, with all applicable deductions being withheld from your paychecks. In addition to this Base Salary, you will be eligible for an annual performance bonus with a target bonus opportunity of 40% of Base Salary, pursuant to formulas that may be established by the Company in its sole discretion, and communicated to you upon their establishment. Such formulae will be based upon annual budgeted EBITDA, and the Company may also take into consideration, in its sole discretion, achievement of budgeted customer retention and acquisition and customer satisfaction ratings.

 



 

Reimbursement of Expenses : The Company will reimburse you for all reasonable expenses you incur in the course of performing your duties under this Agreement that are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

 

Employee Benefits : You will be entitled to participate in all employee benefits plans or programs offered to executives of the Company (the “Benefits Plans”), including insurance programs, vacation and other leave benefits, savings, deferred compensation or retirement plans, merchandise discounts and business expense procedures. Plan documents setting forth terms of certain of the Benefits Plans are available upon request. Your execution of this Agreement represents your acknowledgement and understanding that the plan documents control all questions of interpretation of applicable Benefits Plans, and that the Benefits Plans are subject to modification or termination by the Company at any time, at its sole discretion.

 

Section 409A : In the event that any amount due to you under this Agreement or other arrangement with the Company is deemed to be deferred compensation pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the parties agree to make such amendments as are necessary to comply with the requirements of Code Section 409A, so long as such amendments do not impose a material financial burden on the Company.

 

Severance : Upon your termination of employment by the Company without “Cause” or for “Good Reason,” each as defined below, but subject to your performance of all post­employment obligations set forth in this Agreement, you will be entitled to receive severance pay in the amount of 1.0 times your then­current Base Salary. This severance, which will be subject to applicable deductions required by law, will be paid in equal installments on the Company’s regular payroll dates for the twelve (12) month period following your termination date. For purposes of this Agreement, “Cause” shall mean your (i) conviction, guilty plea, or plea of “no contest” to any felony or other crime involving moral turpitude, (ii) commission of any act involving dishonesty or fraud with respect to the Company, (iii) engaging in any conduct bringing the Company (or its officers or directors) into public disgrace or disrepute, (iv) gross negligence or willful misconduct with respect to the Company, (v) substantial and repeated failure to perform the duties of your position, after being given written notice and reasonable opportunity to cure such deficiency (but only if such deficiency is subject to cure), or (vi) any material breach of this Agreement. For purposes of this Agreement, “Good Reason” shall mean an assignment of duties to you that are materially inconsistent with your title and position, or any other action by the Company that results in a significant diminution in your title, position, authority or responsibilities in effect as of the date hereof.

 

Confidential Information; Intellectual Property : You acknowledge and agree that, as a result of your employment, you will have access to trade secrets and other confidential or proprietary information of the Company and its customers and vendors (“Confidential Information”). Such information includes, but is not limited to: (i) customers and clients and customer or client lists, (ii) accounting and business methods, (iii) services or products and the marketing of such services and products, (iv) fees, costs and pricing structures, (v) designs, (vi) analysis, (vii) drawings, photographs and reports, (viii) computer software, including operating systems, applications and program listings, (ix) flow charts, manuals and documentation, (x) databases,

 

2



 

(xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) copyrightable works, (xiii) all technology and trade secrets, and (xiv) all similar and related information in whatever form. You agree that you shall not disclose or use at any time, either during your employment with the Company or thereafter, any Confidential Information, except to the extent that such disclosure or use is directly related to the Company’s business, or unless required to by law, or unless and to the extent that the Confidential Information in question has become generally known to and available for use by the public other than as a result of your acts or omissions to act. In addition, you further agree that any invention, design or innovation that you conceive or devise from your use of Company time, equipment, facilities or support services belong exclusively to the Company, and that it may not be used for your personal benefit, the benefit of a competitor, or for the benefit of any person or entity other than the Company.

 

Corporate Opportunities : Notwithstanding anything contained herein to the contrary, you agree that, as a result of your employment, that you shall have a duty and obligation to bring any “corporate opportunity” to the Company as such duty to bring such opportunity is construed under the laws of the State of New York.

 

Non­Solicitation; Non­Competition : You agree that if you leave the employ of the Company for any reason, for a period of twelve (12) months (the “No­Raid Period”) following such separation you will not directly or indirectly solicit, induce or attempt to influence any associate to leave the employment of the Company, nor will you hire any such associate or assist any other person or entity in doing so (each such activity, a “Raiding Activity”). If you resign your employment, or if your employment is terminated for Cause, for a period of twelve (12) months following such separation you will not, directly or indirectly, work for or contribute to the efforts of any business organization that competes, or plans to compete, with the Company or its products, nor will you call on or otherwise attempt (or assist the attempt) to solicit the business of any customer or client of the Company with whom you had direct contact or supervisory authority (each such activity, a “Competitive Activity”) in the 12­month period immediately preceding your separation (the “Non­Competition Period”) . You specifically acknowledge the reasonableness of these post­employment restrictions, and along with the Company, authorize any court of competent jurisdiction to reform these restrictions to the minimum extent necessary, in the event such court finds any of these restrictions to be unreasonable.

 

Company Property : Upon your termination of employment for any reason, you will promptly return to the Company all Company­related documents and Company property within your possession or control.

 

Release of Company and Related Entities : Your execution of this Agreement represents your full and final release of any claim that might be brought against the Company or Avista Capital Partners, their subsidiaries and their respective affiliates, including any of the officers, directors, agents or representatives of the aforementioned entities, relating to the terms of your previous employment with the Company. You specifically acknowledge that this release covers and releases any claim that might be brought under any previous employment Offer Letter or Confidentiality and Non­Competition Agreement. Notwithstanding the foregoing, this release shall not preclude or otherwise limit your rights or claims to benefits arising under an employee benefit plan.

 

3



 

Whistleblower : You understand that nothing contained in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). You further understand that this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit your right to receive an award for information provided to any Government Agencies.

 

Trade Secrets : 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

 

Disputes : Except as set forth in this paragraph, any dispute, claim or difference arising out of or in relation to your employment will be settled exclusively by binding arbitration in accordance with the rules of the Federal Mediation and Conciliation Service (“FMCS”). The arbitration will be held in New York, New York unless you and the Company (each a “Party,” and jointly, the “Parties”) mutually agree otherwise. Nothing contained in this “Disputes” Section will be construed to limit or preclude a Party from bringing any action in any court of competent jurisdiction for injunctive or other provisional relief to compel another party to comply with its obligations under this Agreement or any other agreement between or among the Parties during the pendency of the arbitration proceedings. Each Party shall bear its own costs and fees of the arbitration, and the fees and expenses of the arbitrator will be borne equally by the parties; provided, however, that the arbitrator shall be empowered to require any one or more of the Parties to bear all or any portion of fees and expenses of the Parties and/or the fees and expenses of the arbitrator in the event that the arbitrator determines such Party has acted in bad faith. The arbitrator shall have the authority to award any remedy or relief that a Court of the State of New York could order or grant. The decision and award of the arbitrator shall be binding on all Parties. Either Party to the arbitration may seek to have the ruling of the arbitrator entered in any court having jurisdiction thereof. Each Party agrees that it will not file suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by an arbitrator and except to seek the issuance of an injunction or temporary restraining order pending a final determination by the arbitrator.

 

Entire Agreement : This Agreement (including those documents incorporated herein) constitutes your entire agreement with the Company relating to the subject matter hereof, and supersedes in

 

4



 

its entirety any and all prior agreements, understandings or arrangements with the Company including the letter agreement dated February 5, 2013, by and between you and WideOpenWest Network LLC .

 

Amendment. The provisions of this Agreement may be amended or waived only with the prior written consent of you and the Company.

 

Governing Law : All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law in conflict with law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

 

* * *

 

[signature pages follow]

 

5



 

Sincerely:

 

 

 

 

 

WIDEOPENWEST, INC.

 

 

 

 

 

 

 

 

By:

/s/ Steven Cochran

 

Dated:

May 15, 2017

Name: Steven Cochran

 

 

Its: Chief Executive Officer

 

 

 

 

 

 

 

 

/s/ Richard E. Fish, Jr.

 

Dated:

May 15, 2017

Richard E. Fish, Jr.

 

 

 

6




Exhibit 10.12

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”) is made May 13, 2017 (the “ Effective Date ”) among WideOpenWest, Inc., a Delaware corporation (the “ Company ”), and Steven Cochran (“ Executive ”).  Capitalized terms used in this Agreement and not otherwise defined have the meanings assigned to such terms in Section 11 .

 

WHEREAS, Executive is currently employed by WideOpenWest Holdings, LLC (f/k/a Racecar Holdings, LLC) pursuant to the terms of an employment agreement dated February 3, 2014 (the “ Prior Agreement ”); and

 

WHEREAS, the Company desires to memorialize the employment of Executive under the terms and conditions specified herein, and Executive desires to be so employed by the Company.

 

NOW, THEREFORE, in consideration of the mutual promises and conditions set forth herein, the parties hereto agree to replace the Prior Agreement in its entirety with this Agreement on the terms and conditions set forth below:

 

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Employment; Prior Employment Agreement .

 

(a)                                  As of the Effective Date, this Agreement will replace and supersede the Prior Agreement in its entirety, and the parties hereto agree that such replacement shall not trigger any liability (including any severance liability) on the part of any party hereto with respect to the Prior Agreement.

 

(b)                                  The Company will employ Executive, and Executive accepts employment with the Company, upon the terms and conditions set forth in this Agreement, for the period beginning on the Effective Date and ending as provided in Section 4 (the “ Employment Period ”).

 

2.                                       Position and Duties .  During the Employment Period, Executive will (a) continue to serve as the serve as the Chief Executive Officer of the Company and render such managerial, analytical, administrative, marketing, creative and other executive services to the Company as are from time to time necessary in connection with the management and affairs of the Company, in each case subject to the authority of the Board of Directors of the Company (the “ Board ”), and (c) serve as a member of the Board.  During the Employment Period, Executive will devote his best efforts and substantially all of his business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company; provided that, without limiting Section 7 , during the Employment Period, Executive will not directly or indirectly own, manage, control, participate in, consult with, render services for, or in any other manner engage in the business of providing cable television, Internet, data, telephony and other communications services (together with all reasonably related activities, the “ Business ”) other than (i) on behalf of the Company or any Subsidiary or (ii) as a passive owner of less than 5% of the outstanding stock of a corporation of any class which is publicly traded, so

 



 

long as Executive has no direct or indirect participation in or managerial influence over the business of such corporation.  Executive will report to the Board.  Executive will perform his duties and responsibilities to the best of his abilities in a diligent, trustworthy, businesslike and efficient manner.  Subject to Section 7 , Executive shall be permitted to continue to perform such charitable activities, as he desires, provided that Executive’s performance of such activities does not interfere in a material manner with Executive’s performance of his duties hereunder.  If Executive desires to serve on any boards he may do so with the consent of the Board, such consent not to be unreasonably withheld.

 

3.                                       Salary and Benefits .

 

(a)                                  Salary .  During the Employment Period, the Company will pay Executive an annual base salary equal to the the same rate as in effect prior to the Effective Date as compensation for services and will be subject to increases effective as of that date base salary adjustments are effective for the Company’s senior management group taken as a whole, as determined by the Compensation Committee of the Board (the “ Compensation Committee ”) from time to time (such base salary as modified from time to time, the “ Base Salary ”).  The Base Salary will be payable in regular installments in accordance with the general payroll practices of the Company.

 

(b)                                  Bonus .  In addition to the Base Salary, the Board shall award a bonus (the “ Annual Bonus ”) to Executive following the end of each fiscal year during the Employment Period.  The target bonus shall be 100% of the annual Base Salary based upon achievement of objective performance goals established by the Compensation Committee, after consultation with Executive, no later than 30 days after the commencement of the relevant performance period.  The Compensation Committee shall establish additional performance thresholds above and below the target at which the Annual Bonus shall range from 50% to that percentage in excess of 100% of Base Salary permitted by the Company’s then existing Management Bonus Plan.  Unless the Compensation Committee otherwise determines, the performance period shall be the fiscal year and the performance goals may be based upon Executive’s and the Company’s performance, including the Company’s performance relative to budgeted EBITDA, numbers of subscribers, capital expenditures, customer satisfaction, and other goals established by the Compensation Committee.  The target performance thresholds established by the Compensation Committee shall be plausible and achievable, as determined in the Compensation Committee’s good faith after consultation with Executive, and shall be adjusted as necessary to reflect unusual or extraordinary events, accounting changes, or other events affecting the performance thresholds.  For purposes of this paragraph, Base Salary shall mean the rate of Base Salary in effect at the end of the fiscal year.  The Annual Bonus shall be paid during the calendar year following the performance year, on a date determined by the Board.  Other than as provided in Section 4(b) , Executive must be employed at the time the Annual Bonus is paid to be eligible for such Annual Bonus.

 

(c)                                   Benefits .  During the Employment Period, Executive shall be eligible to participate in the health, dental, vision, life and long term disability insurance plans as the Board may establish or approve from time to time for senior executive officers of the Company, subject to the applicable plan’s terms.

 

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(d)                                  Reimbursement of Expenses .  During the Employment Period, the Company will reimburse Executive for all reasonable expenses incurred by him in the course of performing his duties under this Agreement and which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

 

4.                                       Termination and Termination Payments .

 

(a)                                  The Employment Period will continue until the earliest of:

 

(i)                                      Expiration of the Term .  For purposes of this Agreement, the “ Term ” will begin as of the Effective Date and shall expire on the fifth annual anniversary of the Effective Date;

 

(ii)                                   Executive’s resignation due to Good Reason;

 

(iii)                                Executive’s resignation without Good Reason or termination of employment due to death, disability or other incapacity (as determined by the Board in good faith);

 

(iv)                               termination by the Company for Cause;

 

(v)                                  Executive’s death;

 

(vi)                               termination by the Company on account of Executive’s Disability; or

 

(vii)                            termination by the Company for any other reason than those listed above (or for no reason), in which case such termination of employment shall be referred to as termination “ Without Cause .”

 

For purposes of this Agreement, “ Cause ” means (A) the indictment of Executive or Executive entering a plea of guilty or no-contest or similar plea with respect to, any felony or crime involving intentional dishonesty (including any breach of Securities laws) or the commission of any act or omission involving actual fraud or embezzlement with respect to Holdings or any of its Subsidiaries, (B) repeated failure by Executive to perform duties as reasonably directed by the Board, (C) Executive’s gross negligence, willful misconduct or breach of fiduciary duty with respect to the Company, (D) any material breach by Executive of this Agreement after written notice from the Board and (if capable of correction) ten days to correct such failure, or (E) a material misrepresentation or non-disclosure by Executive in reporting to the Board.

 

For purposes of this Agreement, “ Good Reason ” means without Executive’s prior written consent: (A) a material breach of this Agreement by the Company, (B) the requirement that Executive relocate to a location which is outside the Denver metropolitan area; (C) the Company’s reduction in Base Salary or any other material agreed-upon benefit required to be provided under this Agreement during the Employment Period; (D) a material and adverse reduction in Executive’s duties, title, responsibilities, authority or reporting responsibilities; or (E) a failure of any successor (by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to become liable for the

 

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performance of this Agreement by assumption pursuant to the terms of this Agreement or by operation of law or otherwise; provided that to constitute “Good Reason,” (x) Executive must inform the Company in writing of the event purporting to trigger Good Reason within thirty days of the initial occurrence of the event, (y) the Company must fail to cure such circumstances within the thirty-day period following receipt of written notice from Executive and (z) Executive must resign for Good Reason within the fifteen-day period following the expiration of the Company’s thirty-day cure period.  Unless Executive’s resignation for Good Reason complies with the foregoing, the grounds to terminate for Good Reason on account of such event shall be irrevocably forfeited by Executive.

 

For purposes of this Agreement, “ Disability ” shall be defined as Executive’s inability to perform, by reason of physical or mental incapacity, Executive’s duties or obligations under this Agreement for a period of one hundred twenty (120) consecutive days or a total period of two hundred ten (210) days in any three hundred sixty (360)-day period, as determined in good faith by a medical doctor or other health care specialist selected pursuant to the following sentence, in each case, after taking into account reasonable accommodations as required by applicable law or in such a manner as to qualify for permanent benefits under the Company’s long-term disability insurance policy.  Executive shall cooperate in all reasonable respects with the Company if a question arises as to whether Executive has become disabled (including, without limitation, submitting to reasonable examinations by one or more medical doctors and other health care specialists selected by the Company and reasonably acceptable to Executive or Executive’s legal representative and authorizing such medical doctors and other health care specialists to discuss Executive’s condition with designated human resources professionals of the Company or the Board).

 

(b)                                  If the Employment Period terminates for any reason, then Executive will receive within five (5) days of the termination date a lump sum cash payment of all earned but unpaid Base Salary through the termination date, any earned but unpaid bonus for which the performance measurement period has ended prior to the termination date, any accrued but unused vacation as of the termination date, and unreimbursed but substantiated business expenses.  Additionally, any amounts payable under any Company benefit plans shall be paid in accordance with the terms of the applicable plan.  Executive will not be entitled to receive his Base Salary or any fringe benefits or Annual Bonus for periods after the termination of the Employment Period.  The payments set forth in this Section 4(b)  shall be referred to as the “ Accrued Benefits .”

 

(c)                                   If the Employment Period is terminated Without Cause or if Executive resigns for Good Reason, then in addition to the Accrued Benefits, the Company will continue to pay the Base Salary as provided in Section 3(a) , and will continue to provide the benefits described in Section 3(d)  to the extent the terms of the relevant plans permit, for the twenty-four (24) month-period commencing on the day after the last day of the Employment Period, so long as Executive continues to comply with Sections 6 and 7 ; provided that the Company will have no obligation to make any such payments or provide any such benefits (other than the Accrued Benefits) unless and until Executive has executed and not revoked a release within sixty days of Executive’s last day of employment in favor of the WOW Companies and all related persons of all past, present and future claims against them, in form and substance acceptable to the Company.  Any payments due before the foregoing release is effective and irrevocable shall be paid in lump sum

 

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in the first payment made after the release is effective and irrevocable.  Otherwise, the continued Base Salary payments in this Section 4(c)  will be payable in regular installments in accordance with the general payroll practices of the Company and its Subsidiaries and any continued benefits in accordance with the terms of the applicable plan.  Any payments under this Section 4(c)  shall be subject to Section 15 .

 

5.                                       Resignation as Officer or Director .  Unless otherwise agreed to by the Company, upon the termination of the Employment Period, Executive shall automatically be deemed to have resigned each position (if any) that he then holds as an officer or director of the Company or any of its Subsidiaries (including his membership on the Board).

 

6.                                       Confidential Information .  Executive acknowledges that the information, observations and data that have been or may be obtained by him during his employment or other relationship or interaction with the Company or any Subsidiary or any of their respective successors or predecessors (and any Subsidiary or any such successor or predecessor being a “ WOW Company ”) prior to and after the date of this Agreement concerning the current or proposed business or affairs of the WOW Companies (collectively, “ Confidential Information ”) are and will be the property of the WOW Companies.  Therefore, Executive agrees that he will not disclose to any unauthorized Person or use for his own account or for the account of any other Person (other than the WOW Companies in the course of performing his duties during the Employment Period) any Confidential Information without the prior written consent of the Company, unless and to the extent that the Confidential Information in question has become generally known to and available for use by the public other than as a result of Executive’s acts or omissions to act.  Executive will deliver or cause to be delivered to the Company at the termination of the Employment Period, or at any other time that any WOW Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof) containing or relating to Confidential Information or the business of any WOW Company that he may then possess or have under his control.

 

7.                                       Non-Compete, Non-Solicitation .

 

(a)                                  Non-Compete .  Executive acknowledges that during his employment or other relationship or interaction with the WOW Companies he has and will become familiar with trade secrets and other confidential information concerning such Persons, and with investment opportunities relating to the Business, and that his services will be of special, unique and extraordinary value to the WOW Companies.  Therefore, Executive agrees that, during the Employment Period and for the 24 month period following the last day of the Employment Period (the Employment Period and the period following being the “ Noncompete Period ”), he will not directly or indirectly own, manage, control, participate in, consult with, render services for, or in any other manner engage in any business, or as an investor in or lender to any business (in each case including on his own behalf or on behalf of another Person) which constitutes or is competitive with all or part of the Business as conducted in any Territory.  For purposes of this Agreement, “ Territory ” means any geographic market in which any of the WOW Companies holds a franchise to conduct the Business during the Employment Period or in which any of the WOW Companies has taken material steps to obtain franchise rights during the Employment Period or at the end of the Employment Period if the Employment Period has terminated.  Nothing in this Section 7(a)  will prohibit Executive from being a passive owner of less than 5%

 

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of the outstanding stock of a corporation of any class which is publicly traded, so long as Executive has no direct or indirect participation in or managerial influence over the business of such corporation.  By initialing in the space provided below, Executive acknowledges that he has read carefully and had the opportunity to consult with legal counsel regarding the provisions of this Section 7(a) .            [initial] .

 

(b)                                  Non-Solicitation .  During the Noncompete Period, Executive will not directly or indirectly (i) induce or attempt to induce any employee or independent contractor of any WOW Company to leave the employ or contracting relationship with such WOW Company, or in any way interfere with the relationship between any WOW Company and any employee or full-time independent contractor thereof, (ii) solicit for employment or as an independent contractor any person who was an employee or independent contractor of any WOW Company at any time during the Employment Period, or (iii) induce or attempt to induce any customer, supplier or other business relation of any WOW Company to cease doing business with such entity or in any way interfere with the relationship between any such customer, supplier or other business relation and such WOW Company.  By initialing in the space provided below, Executive acknowledges that he has read carefully and had the opportunity to consult with legal counsel regarding the provisions of this Section 7(b) .           [initial]

 

8.                                       Enforcement .  The Company and Executive agree that if, at the time of enforcement of Section 6 or 7 , a court holds that any restriction stated in any such Section is unreasonable under circumstances then existing, then the maximum period, scope or geographical area reasonable under such circumstances will be substituted for the stated period, scope or area.  Because Executive’s services are unique and because Executive has access to information of the type described in Sections 6 and 7 , the Company and Executive agree that money damages would be an inadequate remedy for any breach of Section 6 or 7 .

 

Therefore, in the event of a breach or threatened breach of Section 6 or 7 , any WOW Company may, in addition to any other rights and remedies existing in its favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violation of, the provisions of Section 6 or 7 , without posting a bond or other security.  The provisions of Sections 6 , 7 and 8 and the other provisions of this Agreement are intended to be for the benefit of each of the WOW Companies, each of which may enforce such provisions and each of which (other the Company) is an express third-party beneficiary of such Sections and this Agreement generally.  Sections 6 , 7 and 8 will survive and continue in full force in accordance with their terms notwithstanding any termination of the Employment Period.  By initialing in the space provided below, Executive acknowledges that he has read carefully and had the opportunity to consult with legal counsel regarding the provisions of this Section 8 .           [initial]

 

9.                                       Representations and Warranties of Executive .  Executive represents and warrants to the Company as follows:

 

(a)                                  Other Agreements .  Executive is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any other Person.

 

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(b)                                  Authorization .  This Agreement when executed and delivered will constitute a valid and legally binding obligation of Executive, enforceable against Executive in accordance with its terms.

 

10.                                Survival of Representations and Warranties .  All representations and warranties contained herein will survive the execution and delivery of this Agreement.

 

11.                                Certain Definitions .  When used herein, the following terms will have the following meanings:

 

Person ” means an individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization or any other entity (including any governmental entity or any department, agency or political subdivision thereof).

 

Subsidiaries ” means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of such Person or entity or a combination thereof.  For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons will be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or will be or control any managing director, managing member, or general partner of such limited liability company, partnership, association or other business entity.

 

12.                                Key-Person Life Insurance .  Executive agrees to submit to any requested physical examination in connection with the Company’s or any Subsidiary’s purchase of a “key-person” insurance policy.  Executive agrees to cooperate fully in connection with the underwriting, purchase and/or retention of any such insurance policy by the Company or any of its Subsidiaries.

 

13.                                Miscellaneous .

 

(a)                                  Notices .  All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient, sent to the recipient by reputable overnight courier service (charges prepaid), or mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid.  Such notices, demands and other communications will be sent to the address indicated below:

 

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Notices to Executive :

 

Steven Cochran
9510 S. Silent Hills Dr.
Lone Tree, CO 80124

 

Notices to the Company :

 

WideOpenWest, Inc.
7887 East Belleview Avenue, Suite 1000
Englewood, CO 80111

 

Attention: Board of Directors
with copies (which will not constitute notice to the Company) to :

 

WideOpenWest, Inc.
7887 East Belleview Avenue, Suite 1000
Englewood, CO 80111
Attention: D. Craig Martin, Esq.

 

Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Attention: Jai Agrawal and Joshua Kogan

 

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

 

(b)                                  Amendment and Waiver .  No modification, amendment or waiver of any provision of this Agreement will be effective unless such modification, amendment or waiver is executed by the Company and Executive.  The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

(c)                                   Severability .  Without limiting Section 8 , whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect the validity, legality or enforceability of any other provision of this Agreement in such jurisdiction or affect the validity, legality or enforceability of any provision in any other jurisdiction, but this Agreement will be reformed, construed and enforced in that jurisdiction as if such invalid, illegal or unenforceable provision had never been contained in this Agreement.

 

(d)                                  Entire Agreement .  Except as otherwise expressly set forth herein, this agreement and the other agreements referred to herein embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts

 

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any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way (including, without limitation, the Prior Agreement).

 

(e)                                   Successors and Assigns .  This Agreement will bind and inure to the benefit of and be enforceable by the Company and Executive and their respective permitted assigns; provided that Executive may not assign his rights or delegate his duties under this Agreement without the prior written consent of a majority of the Board.

 

(f)                                    Counterparts .  This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement.

 

(g)                                   Descriptive Headings; Interpretation; No Strict Construction .  The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.  Whenever required by the context, any pronoun used in this Agreement will include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs will include the plural and vice versa.  Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof The use of the words “include” or “including” in this Agreement will be by way of example rather than by limitation.  The use of the words “or,” “either” or “any” will not be exclusive.  The parties hereto have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.  The parties agree that prior drafts of this Agreement will be deemed not to provide any evidence as to the meaning of any provision hereof or the intent of the parties hereto with respect hereto.

 

(h)                                  GOVERNING LAW .  ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED.  IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER THAT JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

 

(i)                                      Waiver of Jury Trial .  EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION

 

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WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.

 

(j)                                     Actions by the Company .  Subject to the provisions of Section 13(e) , any action, election or determination by the Board or any WOW Company pursuant to or relating to this Agreement will be effective if, and only if, it is taken or made by (or with the prior approval of) a majority of the members of the Board who are not at the time employees of the Company or any of its Subsidiaries.  Notwithstanding any provision of the LLC Agreement to the contrary, no meeting or quorum of the Board will be required in order for such majority to take, make or approve any such action, election or determination.

 

14.                                Taxes .

 

(a)                                  Withholding .  The Company and its Subsidiaries may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

(b)                                  Code Section 409A .

 

(i)                                      The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “ Code Section 409A ”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company of the applicable provision without violating the provisions of Code Section 409A.

 

(ii)                                   A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amount or benefit that constitutes “nonqualified deferred compensation” upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” Notwithstanding anything to the contrary in this Agreement, if Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered “nonqualified deferred compensation” under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (B) the date of Executive’s death, to the extent required under Code Section 409A.  Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 15(b)(ii)  (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum, and all remaining payments and benefits due

 

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under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(iii)                                To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (x) all expense or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (y) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (z) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

 

(iv)                               For purposes of Code Section 409A, Executive’s right to receive installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

* * * * *

 

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IN WITNESS WHEREOF, the parties hereto have executed this Executive Employment Agreement as of the date first written above.

 

 

WIDEOPENWEST, INC.

 

 

 

 

 

By:

/s/ Richard E. Fish, Jr.

 

 

Name: Richard E. Fish, Jr.

 

 

Title: Chief Financial Officer

 

 

 

 

 

/s/ Steven Cochran

 

Steven Cochran

 

Signature Page to Executive Employment Agreement

 




Exhibit 10.13

 

WideOpenWest, Inc.
7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

 

Mr. Scott Russell
350 Forest Street
Denver, CO 80220

 

Re:                              Letter Agreement of Employment

 

Dear Scott:

 

The purpose of this letter is to formalize the terms and conditions of your employment, and your employment relationship, with WideOpenWest, Inc. (together with its subsidiaries, the “Company”). Your execution of this letter (this “Agreement”), which will be deemed effective as of the date of this letter, will represent your acceptance of all of the terms set forth below. We are pleased to present this offer to you for your consideration.

 

Nature of Agreement and Relationship : This Agreement does not represent an employment contract for any specified term. Your employment relationship thus will remain “at-will,” meaning that, subject to the terms hereof, the Company may terminate your employment without Cause (as defined below) upon 14 days’ prior notice; provided that the Company may terminate your employment at any time for Cause without notice. You may terminate your employment with 14 days’ prior notice.

 

Job Title and Duties : Your job title will continue to be Chief Marketing & Sales Officer and you will be expected to devote all of your business time and efforts to the performance of the duties and responsibilities normally associated with this position, including those that will from time-to-time be assigned to you by the Chief Executive Officer and any others within the Company to whom he may delegate from time to time. Notwithstanding the foregoing, you will be permitted to serve on the boards of directors of charitable organizations and perform charitable activities that do not interfere in any material manner with your duties under this Agreement.

 

Salary and Bonuses : Your annual base salary is equal to the same rate as in effect on the date hereof for fiscal year 2017 (“Base Salary”) which will be prorated over the remaining term of such fiscal year and shall be subject to periodic review and adjustment in the sole discretion of the Company. You will be paid in accordance with the Company’s normal payroll policies and practices, with all applicable deductions being withheld from your paychecks. In addition to this Base Salary, you will be eligible for an annual performance bonus with a target bonus opportunity of 40% of Base Salary, pursuant to formulas that may be established by the Company in its sole discretion, and communicated to you upon their establishment. Such formulae will be based upon a variety of factors, including but not limited to, annual budgeted

 



 

EBITDA, and the Company may also take into consideration, in its sole discretion, achievement of budgeted customer retention and acquisition and customer satisfaction ratings.

 

Reimbursement of Expenses : The Company will reimburse you for all reasonable expenses you incur in the course of performing your duties under this Agreement that are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

 

Employee Benefits : You will be entitled to participate in all employee benefits plans or programs offered to executives of the Company (the “Benefits Plans”), including insurance programs, vacation and other leave benefits, savings, deferred compensation or retirement plans, merchandise discounts and business expense procedures. Plan documents setting forth terms of certain of the Benefits Plans are available upon request. Your execution of this Agreement represents your acknowledgement and understanding that the plan documents control all questions of interpretation of applicable Benefits Plans, and that the Benefits Plans are subject to modification or termination by the Company at any time, at its sole discretion.

 

Section 409A : In the event that any amount due to you under this Agreement or other arrangement with the Company is deemed to be deferred compensation pursuant to Section 409A of the Internal Revenue Code of 1986, as amended, the parties agree to make such amendments as are necessary to comply with the requirements of Code Section 409A, so long as such amendments do not impose a material financial burden on the Company.

 

Severance : Upon your termination of employment by the Company without “Cause” or for “Good Reason,” each as defined below, but subject to your performance of all postemployment obligations set forth in this Agreement, you will be entitled to receive severance pay in the amount of 1.0 times your then-current Base Salary. This severance, which will be subject to applicable deductions required by law, will be paid in equal installments on the Company’s regular payroll dates for the twelve (12) month period following your termination date. For purposes of this Agreement, “Cause” shall mean your (i) conviction, guilty plea, or plea of “no contest” to any felony or other crime involving moral turpitude, (ii) commission of any act involving dishonesty or fraud with respect to the Company, (iii) engaging in any conduct bringing the Company (or its officers or directors) into public disgrace or disrepute, (iv) gross negligence or willful misconduct with respect to the Company, (v) substantial and repeated failure to perform the duties of your position, after being given written notice and reasonable opportunity to cure such deficiency (but only if such deficiency is subject to cure), or (vi) any material breach of this Agreement. For purposes of this Agreement, “Good Reason” shall mean an assignment of duties to you that are materially inconsistent with your title and position, or any other action by the Company that results in a significant diminution in your title, position, authority or responsibilities in effect as of the date of this Agreement.

 

Confidential Information; Intellectual Property : You acknowledge and agree that, as a result of your employment, you will have access to trade secrets and other confidential or proprietary information of the Company and its customers and vendors (“Confidential Information”). Such information includes, but is not limited to: (i) customers and clients and customer or client lists, (ii) accounting and business methods, (iii) services or products and the marketing of such

 

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services and products, (iv) fees, costs and pricing structures, (v) designs, (vi) analysis, (vii) drawings, photographs and reports, (viii) computer software, including operating systems, applications and program listings, (ix) flow charts, manuals and documentation, (x) databases, (xi) inventions, devices, new developments, methods and processes, whether patentable or un-patentable and whether or not reduced to practice, (xii) copyrightable works, (xiii) all technology and trade secrets, and (xiv) all similar and related information in whatever form. You agree that you shall not disclose or use at any time, either during your employment with the Company or thereafter, any Confidential Information, except to the extent that such disclosure or use is directly related to the Company’s business, or unless required to by law, or unless and to the extent that the Confidential Information in question has become generally known to and available for use by the public other than as a result of your acts or omissions to act. In addition, you further agree that any invention, design or innovation that you conceive or devise from your use of Company time, equipment, facilities or support services belong exclusively to the Company, and that it may not be used for your personal benefit, the benefit of a competitor, or for the benefit of any person or entity other than the Company.

 

Corporate Opportunities : Notwithstanding anything contained herein to the contrary, you agree that, as a result of your employment, that you shall have a duty and obligation to bring any “corporate opportunity” to the Company as such duty to bring such opportunity is construed under the laws of the State of New York.

 

Non-Solicitation; Non-Competition : You agree that if you leave the employ of the Company for any reason, for a period of twelve (12) months (the “No-Raid Period”) following such separation you will not directly or indirectly solicit, induce or attempt to influence any associate to leave the employment of the Company, nor will you hire any such associate or assist any other person or entity in doing so (each such activity, a “Raiding Activity”). If you resign your employment, or if your employment is terminated for Cause, for a period of twelve (12) months following such separation you will not, directly or indirectly, work for or contribute to the efforts of any business organization that competes, or plans to compete, with the Company or its products, nor will you call on or otherwise attempt (or assist the attempt) to solicit the business of any customer or client of the Company with whom you had direct contact or supervisory authority (each such activity, a “Competitive Activity”) in the 12-month period immediately preceding your separation (the “Non-Competition Period”). You specifically acknowledge the reasonableness of these postemployment restrictions, and along with the Company, authorize any court of competent jurisdiction to reform these restrictions to the minimum extent necessary, in the event such court finds any of these restrictions to be unreasonable.

 

Company Property : Upon your termination of employment for any reason, you will promptly return to the Company all Company-related documents, data and other Company property within your possession or control.

 

Whistleblower : You understand that nothing contained in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). You further understand that this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any

 

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investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit your right to receive an award for information provided to any Government Agencies.

 

Trade Secrets : 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The parties also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

 

Disputes : Except as set forth in this paragraph, any dispute, claim or difference arising out of or in relation to your employment will be settled exclusively by binding arbitration in accordance with the rules of the Federal Mediation and Conciliation Service (“FMCS”). The arbitration will be held in New York, New York unless you and the Company (each a “Party,” and jointly, the jurisdiction for injunctive or other provisional relief to compel another party to comply with its obligations under this Agreement or any other agreement between or among the Parties during the pendency of the arbitration proceedings. Each Party shall bear its own costs and fees of the arbitration, and the fees and expenses of the arbitrator will be borne equally by the parties; provided , however , that the arbitrator shall be empowered to require any one or more of the Parties to bear all or any portion of fees and expenses of the Parties and/or the fees and expenses of the arbitrator in the event that the arbitrator determines such Party has acted in bad faith. The arbitrator shall have the authority to award any remedy or relief that a Court of the State of New York could order or grant. The decision and award of the arbitrator shall be binding on all Parties. Either Party to the arbitration may seek to have the ruling of the arbitrator entered in any court having jurisdiction thereof. Each Party agrees that it will not file suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by an arbitrator and except to seek the issuance of an injunction or temporary restraining order pending a final determination by the arbitrator.

 

Entire Agreement : This Agreement (including those documents incorporated herein) constitutes your entire agreement with the Company relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or arrangements with the Company, including the letter agreement dated September 30, 2017, by and between you and WideOpenWest Network LLC .

 

Amendment . The provisions of this Agreement may be amended or waived only with the prior written consent of you and the Company.

 

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Governing Law : All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law in conflict with law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

 

* * *

 

[signature pages follow]

 

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Sincerely:

 

 

 

 

 

 

 

WIDEOPENWEST, INC.

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Steven Cochran

 

Dated:

May 15, 2017

Name:

Steven Cochran

 

 

 

Its:

Chief Executive Officer

 

 

 

 

 

 

 

/s/ Scott Russell

 

Dated:

May 15, 2017

Scott Russell

 

 

 

 

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Exhibit 10.14

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “ Agreement ”) is made as of [ ], 2017 by and between WideOpenWest, Inc., a Delaware corporation (the “ Corporation ”), in its own name and on behalf of its direct and indirect subsidiaries, and [ ], an individual (“ Indemnitee ”).

 

RECITALS :

 

WHEREAS , directors, officers, employees, controlling persons, fiduciaries and other agents (“ Representatives ”) in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the corporation or business enterprise itself;

 

WHEREAS , highly competent persons have become more reluctant to serve as Representatives unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation or business enterprise;

 

WHEREAS , the Board of Directors of the Corporation (the “ Board ”) has determined that the increased difficulty in attracting and retaining highly competent persons is detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure such persons that there will be increased certainty of protection against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the Corporation;

 

WHEREAS , (a) the Amended and Restated Bylaws of the Corporation (the “ Bylaws ”) require indemnification of the officers and directors of the Corporation, (b) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “ DGCL ”) and (c) the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Corporation and its Representatives with respect to indemnification;

 

WHEREAS , this Agreement is a supplement to and in furtherance of the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder; and

 

WHEREAS , (a) Indemnitee does not regard the protection available under the Bylaws and insurance as adequate in the present circumstances, (b) Indemnitee may not be willing to serve or continue to serve as a Representative without adequate protection, (c) the Corporation desires Indemnitee to serve in such capacity and (d) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Corporation on the condition that [he/she] be so indemnified.

 



 

AGREEMENT :

 

NOW, THEREFORE , in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows:

 

Section 1.                                            Definitions .

 

(a)                                  As used in this Agreement:

 

Agreement ” shall have the meaning ascribed to such term in the Preamble hereto.

 

Board ” shall have the meaning ascribed to such term in the Recitals hereto.

 

Bylaws ” shall have the meaning ascribed to such term in the Recitals hereto.

 

Certificate of Incorporation ” shall mean the Amended and Restated Certificate of Incorporation of the Corporation.

 

Corporate Status ” describes the status of an individual who is or was a Representative of an Enterprise.

 

Corporation ” shall have the meaning ascribed to such term in the Preamble hereto.

 

DGCL ” shall have the meaning ascribed to such term in the Recitals hereto.

 

Enterprise ” shall mean the Corporation and any other Person, employee benefit plan, joint venture or other enterprise of which Indemnitee is or was serving at the request of the Corporation as a Representative.

 

Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

 

Expenses ” shall mean all reasonable costs, expenses, fees and charges, including, without limitation, attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include, without limitation, (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of, in respect of or relating to, any Proceeding, including, without limitation, the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 11(d) only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation

 

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or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement (on a grossed up basis) and (iv) any interest, assessments or other charges in respect of the foregoing.

 

Indemnitee ” shall have the meaning ascribed to such term in the Preamble hereto.

 

Indemnity Obligations ” shall mean all obligations of the Corporation to Indemnitee under this Agreement, including, without limitation, the Corporation’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.

 

Independent Counsel ” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Corporation or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements) or (ii) any other party to the Proceeding giving rise to a claim for indemnification; provided , however , that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

Liabilities ” shall mean all claims, liabilities, damages, losses, judgments, orders, fines, penalties and other amounts payable in connection with, arising out of, in respect of or relating to or occurring as a direct or indirect consequence of any Proceeding, including, without limitation, amounts paid in whole or partial settlement of any Proceeding, all Expenses in complying with any judgment, order or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding, and any consequential damages resulting from any Proceeding or the settlement, judgment, or result thereof.

 

Person ” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, governmental agency or body or any other legal entity.

 

Proceeding ” shall mean any threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal hearing, inquiry or investigation, litigation, administrative hearing or any other actual, threatened or completed judicial, administrative or arbitration proceeding (including, without limitation, any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought in the right of the Corporation or otherwise, and whether of a civil, criminal, administrative or investigative nature, in which

 

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Indemnitee was, is or will be, or is threatened to be, involved as a party or witness or otherwise involved, affected or injured (i) by reason of the fact that Indemnitee is or was a Representative of the Corporation, (ii) by reason of any actual or alleged action taken by Indemnitee or of any action on Indemnitee’s part while acting as Representative of the Corporation or (iii) by reason of the fact that Indemnitee is or was serving at the request of the Corporation as a Representative of another Person, whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement.

 

Representative ” shall have the meaning ascribed to such term in the Recitals hereto.

 

Sponsor Entities ” shall mean funds affiliated with Avista Capital Parnters and any of their respective Affiliates and funds associated with Crestview Advisors, L.L.C. and their Affiliates who beneficially own shares of common stock, par value $0.01 per share, of the Company, and any securities into which such shares of common stock shall have been changed or any securities resulting from any reclassification or recapitalization of such shares of common stock from time to time; provided , however , that neither the Corporation nor any of its subsidiaries shall be considered Sponsor Entities hereunder.

 

Submission Date ” shall have the meaning ascribed to such term in Section 9(b).

 

(b)                                  For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Corporation” shall include, without limitation, any service as a Representative of the Corporation which imposes duties on, or involves services by, such Representative with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Corporation” as referred to in this Agreement.

 

Section 2.                                            Indemnity in Third-Party Proceedings . The Corporation shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with or as a consequence of any Proceeding (other than any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor which shall be governed by the provisions set forth in Section 3 below) or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation and, in the case of a criminal proceeding, had no reasonable cause to believe that his conduct was unlawful. For the avoidance of doubt, a finding, admission or stipulation that an Indemnitee has acted with gross negligence or recklessness shall not, of itself, create a presumption that such Indemnitee has failed to meet the standard or conduct required for indemnification in this Section 2.

 

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Section 3.                                            Indemnity in Proceedings by or in the Right of the Corporation . The Corporation shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with or as a consequence of any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor, or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in, or not opposed, to the best interests of the Corporation. No indemnification for Liabilities and Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Corporation, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification. For the avoidance of doubt, a finding, admission or stipulation that an Indemnitee has acted with gross negligence or recklessness shall not, of itself, create a presumption that such Indemnitee has failed to meet the standard or conduct required for indemnification in this Section 3.

 

Section 4.                                            Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, and without limiting the rights of Indemnitee under any other provision hereof, to the extent that (a) Indemnitee is a party to (or a participant in) any Proceeding, (b) the Corporation is not permitted by applicable law to indemnify Indemnitee with respect to any claim brought in such Proceeding if such claim is asserted successfully against Indemnitee and (c) Indemnitee is not wholly successful in such Proceeding, but is successful, on the merits or otherwise (including, without limitation, settlement thereof), as to one or more but less than all claims, issues or matters in such Proceeding, then the Corporation shall indemnify Indemnitee, to the fullest extent permitted by applicable law, against all Liabilities and Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf, in connection with or as a consequence of each successfully resolved claim, issue or matter. For purposes of this Section 4 and without limitation, the termination of any claim, issue or matter in such a Proceeding by settlement, entry of a plea of nolo contendere or by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 5.                                            Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Liabilities and Expenses suffered or incurred by him or on his behalf in connection therewith.

 

Section 6.                                            Additional Indemnification . Notwithstanding any limitation in Sections 2, 3 or 4, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to, or threatened to be made a party to, any Proceeding (including, without limitation, a Proceeding by or in the right of the Corporation to procure a judgment in its favor), against all Liabilities and Expenses suffered or incurred by Indemnitee in connection with such Proceeding:

 

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(a)                                  to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to, or replacement of, the DGCL, and

 

(b)                                  to the fullest extent authorized or permitted by any amendments to, or replacements of, the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

Section 7.                                            Advances of Expenses . In furtherance of the requirement of Article Seven of the Bylaws and notwithstanding any provision of this Agreement to the contrary, the Corporation shall advance, to the fullest extent permitted by law, Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within ten (10) days after the receipt by the Corporation of a statement or statements requesting such advances from time to time, whether prior to, or after, final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all Expenses incurred pursuing an action to enforce this right of advancement, including, without limitation, Expenses incurred preparing and forwarding statements to the Corporation to support the advances claimed. Indemnitee shall qualify for advances upon the execution and delivery to the Corporation of this Agreement, which shall constitute an undertaking, providing that Indemnitee undertakes to repay the advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Corporation.

 

Section 8.                                            Procedure for Notification and Defense of Claim .

 

(a)                                  Indemnitee shall notify the Corporation in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Corporation shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. Any delay or failure by Indemnitee to notify the Corporation hereunder will not relieve the Corporation from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Corporation shall not constitute a waiver by Indemnitee of any rights under this Agreement.

 

(b)                                  In the event Indemnitee is entitled to indemnification and/or advancement of Expenses with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain legal counsel selected by Indemnitee and approved by the Corporation (which approval shall not to be unreasonably withheld, conditioned or delayed) to defend Indemnitee in such Proceeding, at the sole expense of the Corporation or (ii) have the Corporation assume the defense of Indemnitee in the Proceeding, in which case the

 

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Corporation shall assume the defense of such Proceeding with legal counsel selected by the Corporation and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Corporation’s receipt of written notice of Indemnitee’s election to cause the Corporation to do so. If the Corporation is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and shall be solely responsible for all Expenses of such legal counsel and otherwise of such defense. Such legal counsel may represent both Indemnitee and the Corporation (and/or any other party or parties entitled to be indemnified by the Corporation with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is a conflict of interest between Indemnitee and the Corporation (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Corporation (or any such other party or parties). Notwithstanding either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate legal counsel at its own expense. The party having responsibility for defense of a Proceeding shall provide the other party and its legal counsel with all copies of pleadings and material correspondence relating to the Proceeding. Indemnitee and the Corporation shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Corporation or Indemnitee assumes the defense thereof. Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Corporation (which consent shall not be unreasonably withheld, conditioned or delayed). The Corporation may not settle or compromise any proceeding without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed).

 

Section 9.                                            Procedure Upon Application for Indemnification .

 

(a)                                  Upon written request by Indemnitee for indemnification pursuant to Section 8(a), the Corporation shall advance Expenses necessary to defend against a Claim pursuant to Section 7 hereof. If any determination by the Corporation is required by applicable law with respect to Indemnitee’s ultimate entitlement to indemnification, such determination shall be made (i) if Indemnitee shall request such determination be made by the Independent Counsel, by the Independent Counsel and (ii) in all other circumstances in any manner permitted by the DGCL. Indemnitee shall cooperate with the Person(s) making such determination with respect to Indemnitee’s entitlement to indemnification, including, without limitation, providing to such Person(s), upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Expenses incurred by Indemnitee in so cooperating with the Person(s) making such determination shall be borne by the Corporation (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Corporation will not deny any written request for indemnification hereunder made in good faith by Indemnitee unless a determination as to Indemnitee’s entitlement to such indemnification described in this Section 9(a) has been made. The Corporation agrees to pay Expenses of the Independent Counsel referred to above and to fully indemnify the Independent Counsel against any and all Expenses,

 

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claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(b)                                  In the event that the determination of entitlement to indemnification is to be made by the Independent Counsel pursuant to Section 9(a) hereof, (i) the Independent Counsel shall be selected by the Corporation within ten (10) days of the Submission Date, (ii) the Corporation shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Corporation Indemnitee’s written objection to such selection. Absent a timely objection, the Person so selected shall act as the Independent Counsel. If a timely objection is made by Indemnitee, the Person so selected may not serve as the Independent Counsel unless and until such objection is withdrawn. If no Independent Counsel shall have been selected (whether due to a failure of the Corporation to appoint such Independent Counsel, an un-withdrawn objection from Indemnitee with respect to the person so appointed or otherwise) before the later of (i) thirty (30) days after the submission by Indemnitee of a written request for indemnification pursuant to Section 9(a) hereof (the date of such submission, the “ Submission Date ”) and (ii) ten (10) days after the final disposition of the Proceeding for which indemnity is sought, then (x) each of the Corporation and Indemnitee shall select a Person meeting the qualifications to serve as the Independent Counsel and (y) such Persons shall (collectively) select the Independent Counsel. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 11(a) of this Agreement, the Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

Section 10.                                     Presumptions and Effect of Certain Proceedings .

 

(a)                                  In making a determination with respect to entitlement to indemnification hereunder, the Person(s) making such determination shall, to the fullest extent permitted by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and the Corporation shall, to the fullest extent permitted by law, have the burden of proof to overcome that presumption in connection with the making by any Person(s) of any determination contrary to that presumption. Neither the failure of the Corporation (including, without limitation, by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation (including, without limitation, by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)                                  Subject to Section 11(e), if the Person(s) empowered or selected under Section 9 hereof to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Corporation of the

 

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request therefore, the requisite determination of entitlement to indemnification shall, to the fullest extent permitted by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided , however , that such sixty (60) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if (i) the determination is to be made by the Independent Counsel and Indemnitee objects to the Corporation’s selection of the Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

 

(c)                                   The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

(d)                                  Effect of Settlement . To the fullest extent permitted by law, settlement of any Proceeding without any finding of responsibility, wrongdoing or guilt on the part of Indemnitee with respect to claims asserted in such Proceeding shall constitute a conclusive determination that Indemnitee is entitled to indemnification hereunder with respect to such Proceeding.

 

(e)                                   Reliance as Safe Harbor . For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise, or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. The provisions of this Section 10(e) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(f)                                    Actions of Others . The knowledge and/or actions, or failure to act, of any Representative (other than Indemnitee) of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

Section 11.                                     Remedies of Indemnitee .

 

(a)                                  Subject to Section 11(e), in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) no determination of entitlement to

 

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indemnification shall have been made pursuant to Section 9(a) of this Agreement within ninety (90) days after the Submission Date, (iv) payment of indemnification is not made pursuant to Section 4, 5 or 9(a) of this Agreement within ten (10) days after receipt by the Corporation of a written request therefore, (v) payment of indemnification pursuant to Section 2, 3 or 6 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or (vi) in the event that the Corporation or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, Indemnitee, the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of Indemnitee’s entitlement to such indemnification and/or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Corporation shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)                                  In the event that a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 11 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 11, the Corporation shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

 

(c)                                   If a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent (i) a misstatement by the Indemnitee of a material fact, or an omission by the Indemnitee of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)                                  The Corporation shall, to the fullest extent permitted by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 11 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Agreement. It is the intent of the Corporation that Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. In addition, the Corporation shall indemnify Indemnitee against any and all such Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Corporation of a written request therefore) advance, to the fullest extent permitted by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the

 

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Corporation under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Corporation, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

 

(e)                                   Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding; provided that , in absence of any such determination with respect to such Proceeding, the Corporation shall pay Liabilities and advance Expenses with respect to such Proceeding as if Indemnitee had been determined to be entitled to indemnification and advancement of Expenses with respect to such Proceeding.

 

Section 12.                                     Non-Exclusivity; Survival of Rights; Insurance; Subrogation .

 

(a)                                  The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders, a resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in applicable law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation, the Bylaws and/or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)                                  The Corporation hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity). The Corporation hereby acknowledges and agrees that (i) the Corporation shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Corporation shall be primarily liable for all Indemnity Obligations and any indemnification afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by law, organizational or constituent documents, contract (including, without limitation, this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) to indemnify Indemnitee and/or advance Expenses to Indemnitee in respect of any proceeding shall be secondary to the obligations of the Corporation hereunder, (iv) the

 

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Corporation shall be required to indemnify Indemnitee and advance Expenses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) or insurer of any such Person and (v) the Corporation irrevocably waives, relinquishes and releases any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Corporation hereunder. In the event that any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Corporation or payable under any insurance policy provided under this Agreement, the payor shall have a right of subrogation against the Corporation or its insurer or insurers for all amounts so paid which would otherwise be payable by the Corporation or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation of the Corporation under this Agreement by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) or their insurers, affect the obligations of the Corporation hereunder or shift primary liability for any Indemnity Obligation to any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity). Any indemnification and/or insurance or advancement of Expenses provided by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity), with respect to any liability arising as a result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person, is specifically in excess of any Indemnity Obligation of the Corporation or valid and any collectible insurance (including, without limitation, any malpractice insurance or professional errors and omissions insurance) provided by the Corporation under this Agreement, and any obligation to provide indemnification and/or insurance or advance Expenses provided by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Sponsor Entity) shall be reduced by any amount that Indemnitee collects from the Corporation as an indemnification payment or advancement of Expenses pursuant to this Agreement.

 

(c)                                   The Corporation shall use its best efforts to obtain and maintain in full force and effect an insurance policy or policies providing liability insurance for Representatives of the Corporation or of any other Enterprise, and Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such Representative under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Corporation maintains an insurance policy or policies providing liability insurance for Representatives of the Corporation or of any other Enterprise, the Corporation shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policy or policies. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

 

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(d)                                  In the event of any payment under this Agreement, the Corporation shall not be subrogated to, and hereby waives any rights to be subrogated to, any rights of recovery of Indemnitee, including, without limitation, rights of indemnification provided to Indemnitee from any other Person or entity with whom Indemnitee may be associated (including, without limitation, any Sponsor Entity) as well as any rights to contribution that might otherwise exist; provided , however , that the Corporation shall be subrogated to the extent of any such payment of all rights of recovery of Indemnitee under insurance policies of the Corporation or any of its subsidiaries.

 

(e)                                   The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.

 

Section 13.                                     Duration of Agreement; Not Employment Contract . This Agreement shall continue until and terminate upon the latest of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a Representative of the Corporation or any other Enterprise and (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement, expressly or to assume and agree to perform this agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.  This Agreement shall not be deemed an employment contract between the Corporation (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Corporation (or any of its subsidiaries or any Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Corporation (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a Representative of the Corporation, by the Certificate of Incorporation, Bylaws and the DGCL.

 

Section 14.                                     Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

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Section 15.                                     Enforcement .

 

(a)                                  The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a Representative of the Corporation, and the Corporation acknowledges that Indemnitee is relying upon this Agreement in serving as a Representative of the Corporation.

 

(b)                                  This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided , however , that this Agreement is a supplement to and in furtherance of the Bylaws and applicable law, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

(c)                                   The Corporation shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting the Indemnitee’s right to receive advancement of expenses under this Agrrement.

 

Section 16.                                     Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

Section 17.                                     Notices . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

 

(a)                                  If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Corporation.

 

(b)                                  If to the Corporation to:

 

WideOpenWest, Inc.

7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

Attn: Craig Martin

Facsimile: (269) 567-4193

 

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with copies to (which shall not constitute notice to the Corporation):

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attention: Joshua N. Korff, P.C. and Brian Hecht

Facsimile: (212) 446-4900

 

or to any other address as may have been furnished to Indemnitee by the Corporation.

 

Section 18.                                     Contribution . To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Corporation, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of the Proceeding in order to reflect (a) the relative benefits received by the Corporation and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (b) the relative fault of the Corporation (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

Section 19.                                     Applicable Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Corporation and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court of Chancery, and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court of Chancery for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court of Chancery and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court of Chancery has been brought in an improper or inconvenient forum.

 

Section 20.                                     Counterparts . This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.  Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

Section 21.                                     Third-Party Beneficiaries . The Sponsor Entities are intended third-party beneficiaries of this Agreement.

 

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Section 22.                                     Miscellaneous . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

 

WIDEOPENWEST, INC.

 

 

 

 

 

Name:

 

Title:

 

[Signature Page to Indemnification Agreement]

 



 

 

INDEMNITEE:

 

 

 

 

 

[  ]

 

[Signature Page to Indemnification Agreement]

 




Exhibit 10.15

 

WideOpenWest, Inc.

 


 

2017 OMNIBUS INCENTIVE PLAN

 


 

ARTICLE I

PURPOSE

 

The purpose of this WideOpenWest, Inc. 2017 Omnibus Incentive Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer Eligible Individuals cash and stock-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders.  The Plan is effective as of the date set forth in Article XV.

 

ARTICLE II

DEFINITIONS

 

For purposes of the Plan, the following terms shall have the following meanings:

 

2.1                                Affiliate means each of the following:  (a) any Subsidiary; (b) any Parent; (c) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company or one of its Affiliates; (d) any trade or business (including, without limitation, a partnership or limited liability company) which directly or indirectly controls 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) of the Company; and (e) any other entity in which the Company or any of its Affiliates has a material equity interest and which is designated as an “Affiliate” by resolution of the Committee; provided that, unless otherwise determined by the Committee, the Common Stock subject to any Award constitutes “service recipient stock” for purposes of Section 409A of the Code or otherwise does not subject the Award to Section 409A of the Code.

 

2.2                                Award means any award under the Plan of any Stock Option, Stock Appreciation Right, Restricted Stock Award, Performance Award, Other Stock-Based Award or Other Cash-Based Award.  All Awards shall be granted by, confirmed by, and subject to the terms of, a written agreement executed by the Company and the Participant.

 

2.3                                Award Agreement means the written or electronic agreement setting forth the terms and conditions applicable to an Award.

 

2.4                                Board means the Board of Directors of the Company.

 

2.5                                Cause means, unless otherwise determined by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination of Employment or Termination of Consultancy, the following:  (a) in the case where there is no employment agreement, consulting

 



 

agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define “cause” (or words of like import)), termination due to a Participant’s insubordination, dishonesty, fraud, incompetence, moral turpitude, willful misconduct, refusal to perform the Participant’s duties or responsibilities for any reason other than illness or incapacity or materially unsatisfactory performance of the Participant’s duties for the Company or an Affiliate, as determined by the Committee in its good faith discretion; or (b) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, however, that with regard to any agreement under which the definition of “cause” only applies on occurrence of a change in control, such definition of “cause” shall not apply until a change in control actually takes place and then only with regard to a termination thereafter.  With respect to a Participant’s Termination of Directorship, “cause” means an act or failure to act that constitutes cause for removal of a director under applicable Delaware law.

 

2.6                                Change in Control has the meaning set forth in 11.2.

 

2.7                                Change in Control Price has the meaning set forth in Section 11.1.

 

2.8                                Code means the Internal Revenue Code of 1986, as amended.  Any reference to any section of the Code shall also be a reference to any successor provision and any treasury regulation promulgated thereunder.

 

2.9                                Committee means any committee of the Board duly authorized by the Board to administer the Plan.  If no committee is duly authorized by the Board to administer the Plan, the term “Committee” shall be deemed to refer to the Board for all purposes under the Plan.

 

2.10                         Common Stock means the common stock, $0.001 par value per share, of the Company.

 

2.11                         Company means WideOpenWest, Inc. a Delaware corporation, and its successors by operation of law.

 

2.12                         Consultant means any natural person who is an advisor or consultant to the Company or its Affiliates.

 

2.13                         Disability means, unless otherwise determined by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination, a permanent and total disability as defined in Section 22(e)(3) of the Code.  A Disability shall only be deemed to occur at the time of the determination by the Committee of the Disability.  Notwithstanding the foregoing, for Awards that are subject to Section 409A of the Code, Disability shall mean that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.

 

2.14                         Effective Date means the effective date of the Plan as defined in Article XV.

 

2.15                         Eligible Employees means each employee of the Company or an Affiliate.

 

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2.16                         Eligible Individual means an Eligible Employee, Non-Employee Director or Consultant who is designated by the Committee in its discretion as eligible to receive Awards subject to the conditions set forth herein.

 

2.17                         Exchange Act means the Securities Exchange Act of 1934, as amended.  Reference to a specific section of the Exchange Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

 

2.18                         Fair Market Value means, for purposes of the Plan, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, as of any date and except as provided below, the last sales price reported for the Common Stock on the applicable date:  (a) as reported on the principal national securities exchange in the United States on which it is then traded or (b) if the Common Stock is not traded, listed or otherwise reported or quoted, the Committee shall determine in good faith the Fair Market Value in whatever manner it considers appropriate taking into account the requirements of Section 409A of the Code.  For purposes of the grant of any Award, the applicable date shall be the trading day immediately prior to the date on which the Award is granted.  For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received by the Committee or, if not a day on which the applicable market is open, the next day that it is open.

 

2.19                         Family Member means the Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent (50%) of the voting interests.

 

2.20                         Incentive Stock Option means any Stock Option awarded to an Eligible Employee of the Company, its Subsidiaries and its Parents (if any) under the Plan intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.

 

2.21                         Lead Underwriter has the meaning set forth in Section 14.20.

 

2.22                         Lock-Up Period has the meaning set forth in Section 14.20.

 

2.23                         Non-Employee Director means a director or a member of the Board of the Company or any Affiliate who is not an active employee of the Company or any Affiliate.

 

2.24                         Non-Qualified Stock Option means any Stock Option awarded under the Plan that is not an Incentive Stock Option.

 

2.25                         Non-Tandem Stock Appreciation Right shall mean the right to receive an amount in cash and/or stock equal to the difference between (x) the Fair Market Value of a share

 

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of Common Stock on the date such right is exercised, and (y) the aggregate exercise price of such right, otherwise than on surrender of a Stock Option.

 

2.26                         Other Cash-Based Award means an Award granted pursuant to Section 10.3 of the Plan and payable in cash at such time or times and subject to such terms and conditions as determined by the Committee in its sole discretion.

 

2.27                         Other Stock-Based Award means an Award under Article X of the Plan that is valued in whole or in part by reference to, or is payable in or otherwise based on, Common Stock, including, without limitation, an Award valued by reference to an Affiliate.

 

2.28                         Parent means any parent corporation of the Company within the meaning of Section 424(e) of the Code.

 

2.29                         Participant means an Eligible Individual to whom an Award has been granted pursuant to the Plan.

 

2.30                         Performance Award means an Award granted to a Participant pursuant to Article IX hereof contingent upon achieving certain Performance Goals.

 

2.31                         Performance Goals means goals established by the Committee as contingencies for Awards to vest and/or become exercisable or distributable based on one or more of the performance goals set forth in Exhibit A hereto.

 

2.32                         Performance Period means the designated period during which the Performance Goals must be satisfied with respect to the Award to which the Performance Goals relate.

 

2.33                         Plan means this WideOpenWest, Inc. 2017 Omnibus Incentive Plan, as amended from time to time.

 

2.34                         Proceeding has the meaning set forth in Section 14.9.

 

2.35                         Reference Stock Option has the meaning set forth in Section 7.1.

 

2.36                         Registration Date means the date on which the Company sells its Common Stock in a bona fide, firm commitment underwriting pursuant to a registration statement under the Securities Act.

 

2.37                         Reorganization has the meaning set forth in Section 4.2(b)(ii).

 

2.38                         Restricted Stock means an Award of shares of Common Stock under the Plan that is subject to restrictions under Article VIII.

 

2.39                         Restriction Period has the meaning set forth in Section 8.3(a) with respect to Restricted Stock.

 

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2.40                         Rule 16b-3 means Rule 16b-3 under Section 16(b) of the Exchange Act as then in effect or any successor provision.

 

2.41                         Section 162(m) of the Code means the exception for performance-based compensation under Section 162(m) of the Code and any applicable treasury regulations thereunder.

 

2.42                         Section 409A of the Code means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable treasury regulations and other official guidance thereunder.

 

2.43                         Securities Act means the Securities Act of 1933, as amended and all rules and regulations promulgated thereunder.  Reference to a specific section of the Securities Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

 

2.44                         Stock Appreciation Right shall mean the right pursuant to an Award granted under Article VII.

 

2.45                         Stock Option or Option means any option to purchase shares of Common Stock granted to Eligible Individuals granted pursuant to Article VI.

 

2.46                         Subsidiary means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.

 

2.47                         Tandem Stock Appreciation Right shall mean the right to surrender to the Company all (or a portion) of a Stock Option in exchange for an amount in cash and/or stock equal to the difference between (i) the Fair Market Value on the date such Stock Option (or such portion thereof) is surrendered, of the Common Stock covered by such Stock Option (or such portion thereof), and (ii) the aggregate exercise price of such Stock Option (or such portion thereof).

 

2.48                         Ten Percent Stockholder means a person owning stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, its Subsidiaries or its Parent.

 

2.49                         Termination means a Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.

 

2.50                         Termination of Consultancy means:  (a) that the Consultant is no longer acting as a consultant to the Company or an Affiliate; or (b) when an entity which is retaining a Participant as a Consultant ceases to be an Affiliate unless the Participant otherwise is, or thereupon becomes, a Consultant to the Company or another Affiliate at the time the entity ceases to be an Affiliate.  In the event that a Consultant becomes an Eligible Employee or a Non-Employee Director upon the termination of such Consultant’s consultancy, unless otherwise determined by the Committee, in its sole discretion, no Termination of Consultancy shall be deemed to occur until such time as such Consultant is no longer a Consultant, an Eligible

 

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Employee or a Non-Employee Director.  Notwithstanding the foregoing, the Committee may otherwise define Termination of Consultancy in the Award Agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Consultancy thereafter, provided that any such change to the definition of the term “Termination of Consultancy” does not subject the applicable Award to Section 409A of the Code.

 

2.51                         Termination of Directorship means that the Non-Employee Director has ceased to be a director of the Company; except that if a Non-Employee Director becomes an Eligible Employee or a Consultant upon the termination of such Non-Employee Director’s directorship, such Non-Employee Director’s ceasing to be a director of the Company shall not be treated as a Termination of Directorship unless and until the Participant has a Termination of Employment or Termination of Consultancy, as the case may be.

 

2.52                         Termination of Employment means:  (a) a termination of employment (for reasons other than a military or personal leave of absence granted by the Company) of a Participant from the Company and its Affiliates; or (b) when an entity which is employing a Participant ceases to be an Affiliate, unless the Participant otherwise is, or thereupon becomes, employed by the Company or another Affiliate at the time the entity ceases to be an Affiliate.  In the event that an Eligible Employee becomes a Consultant or a Non-Employee Director upon the termination of such Eligible Employee’s employment, unless otherwise determined by the Committee, in its sole discretion, no Termination of Employment shall be deemed to occur until such time as such Eligible Employee is no longer an Eligible Employee, a Consultant or a Non-Employee Director.  Notwithstanding the foregoing, the Committee may otherwise define Termination of Employment in the Award Agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Employment thereafter, provided that any such change to the definition of the term “Termination of Employment” does not subject the applicable Award to Section 409A of the Code.

 

2.53                         Transfer means:  (a) when used as a noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or other disposition (including the issuance of equity in any entity), whether for value or no value and whether voluntary or involuntary (including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise dispose of (including the issuance of equity in any entity) whether for value or for no value and whether voluntarily or involuntarily (including by operation of law).  “Transferred” and “Transferable” shall have a correlative meaning.

 

2.54                         Transition Period means the period beginning with the Registration Date and ending as of the earlier of:  (i) the date of the first annual meeting of stockholders of the Company at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Registration Date occurs; and (ii) the expiration of the “reliance period” under Treasury Regulation Section 1.162-27(f)(2).

 

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ARTICLE III

ADMINISTRATION

 

3.1                                The Committee .  The Plan shall be administered and interpreted by the Committee.  To the extent required by applicable law, rule or regulation, it is intended that each member of the Committee shall qualify as (a) a “non-employee director” under Rule 16b-3, (b) an “outside director” under Section 162(m) of the Code and (c) an “independent director” under the rules of any national securities exchange or national securities association, as applicable.  If it is later determined that one or more members of the Committee do not so qualify, actions taken by the Committee prior to such determination shall be valid despite such failure to qualify.

 

3.2                                Grants of Awards .  The Committee shall have full authority to grant, pursuant to the terms of the Plan, to Eligible Individuals:  (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock Awards, (iv) Performance Awards; (v) Other Stock-Based Awards; and (vi) Other Cash-Based Awards.  In particular, the Committee shall have the authority:

 

(a)                                  to select the Eligible Individuals to whom Awards may from time to time be granted hereunder;

 

(b)                                  to determine whether and to what extent Awards, or any combination thereof, are to be granted hereunder to one or more Eligible Individuals;

 

(c)                                   to determine the number of shares of Common Stock to be covered by each Award granted hereunder;

 

(d)                                  to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder (including, but not limited to, the exercise or purchase price (if any), any restriction or limitation, any vesting schedule or acceleration thereof, or any forfeiture restrictions or waiver thereof, regarding any Award and the shares of Common Stock relating thereto, based on such factors, if any, as the Committee shall determine, in its sole discretion);

 

(e)                                   to determine the amount of cash to be covered by each Award granted hereunder;

 

(f)                                    to determine whether, to what extent and under what circumstances grants of Options and other Awards under the Plan are to operate on a tandem basis and/or in conjunction with or apart from other awards made by the Company outside of the Plan;

 

(g)                                   to determine whether and under what circumstances a Stock Option may be settled in cash, Common Stock and/or Restricted Stock under Section 6.4(d);

 

(h)                                  to determine whether a Stock Option is an Incentive Stock Option or Non-Qualified Stock Option;

 

(i)                                      to determine whether to require a Participant, as a condition of the granting of any Award, to not sell or otherwise dispose of shares acquired pursuant to the exercise of an

 

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Award for a period of time as determined by the Committee, in its sole discretion, following the date of the acquisition of such Award;

 

(j)                                     to modify, extend or renew an Award, subject to Article XII and Section 6.4(l), provided, however, that such action does not subject the Award to Section 409A of the Code without the consent of the Participant; and

 

(k)                                  solely to the extent permitted by applicable law, to determine whether, to what extent and under what circumstances to provide loans (which may be on a recourse basis and shall bear interest at the rate the Committee shall provide) to Participants in order to exercise Options under the Plan.

 

3.3                                Guidelines .  Subject to Article XII hereof, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan and perform all acts, including the delegation of its responsibilities (to the extent permitted by applicable law and applicable stock exchange rules), as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan.  The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary to effectuate the purpose and intent of the Plan.  The Committee may adopt special guidelines and provisions for persons who are residing in or employed in, or subject to, the taxes of, any domestic or foreign jurisdictions to comply with applicable tax and securities laws of such domestic or foreign jurisdictions.  Notwithstanding the foregoing, no action of the Committee under this Section 3.3 shall impair the rights of any Participant without the Participant’s consent.  To the extent applicable, the Plan is intended to comply with the applicable requirements of Rule 16b-3, and with respect to Awards intended to be “performance-based,” the applicable provisions of Section 162(m) of the Code, and the Plan shall be limited, construed and interpreted in a manner so as to comply therewith.

 

3.4                                Decisions Final .  Any decision, interpretation or other action made or taken in good faith by or at the direction of the Company, the Board or the Committee (or any of its members) arising out of or in connection with the Plan shall be within the absolute discretion of all and each of them, as the case may be, and shall be final, binding and conclusive on the Company and all employees and Participants and their respective heirs, executors, administrators, successors and assigns.

 

3.5                                Procedures .  If the Committee is appointed, the Board shall designate one of the members of the Committee as chairman and the Committee shall hold meetings, subject to the By-Laws of the Company, at such times and places as it shall deem advisable, including, without limitation, by telephone conference or by written consent to the extent permitted by applicable law.  A majority of the Committee members shall constitute a quorum.  All determinations of the Committee shall be made by a majority of its members.  Any decision or determination reduced to writing and signed by all of the Committee members in accordance with the By-Laws of the Company, shall be fully effective as if it had been made by a vote at a meeting duly called and held.  The Committee shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable.

 

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3.6                                Designation of Consultants/Liability .

 

(a)                                  The Committee may designate employees of the Company and professional advisors to assist the Committee in the administration of the Plan and (to the extent permitted by applicable law and applicable exchange rules) may grant authority to officers to grant Awards and/or execute agreements or other documents on behalf of the Committee.  In the event of any designation of authority hereunder, subject to applicable law, applicable stock exchange rules and any limitations imposed by the Committee in connection with such designation, such designee or designees shall have the power and authority to take such actions, exercise such powers and make such determinations that are otherwise specifically designated to the Committee hereunder.

 

(b)                                  The Committee may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent.  Expenses incurred by the Committee or the Board in the engagement of any such counsel, consultant or agent shall be paid by the Company.  The Committee, its members and any person designated pursuant to sub-section (a) above shall not be liable for any action or determination made in good faith with respect to the Plan.  To the maximum extent permitted by applicable law, no officer of the Company or member or former member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it.

 

3.7                                Indemnification .  To the maximum extent permitted by applicable law and the Certificate of Incorporation and By-Laws of the Company and to the extent not covered by insurance directly insuring such person, each officer or employee of the Company or any Affiliate and member or former member of the Committee or the Board shall be indemnified and held harmless by the Company against any cost or expense (including reasonable fees of counsel reasonably acceptable to the Committee) or liability (including any sum paid in settlement of a claim with the approval of the Committee), and advanced amounts necessary to pay the foregoing at the earliest time and to the fullest extent permitted, arising out of any act or omission to act in connection with the administration of the Plan, except to the extent arising out of such officer’s, employee’s, member’s or former member’s own fraud or bad faith.  Such indemnification shall be in addition to any right of indemnification the employees, officers, directors or members or former officers, directors or members may have under applicable law or under the Certificate of Incorporation or By-Laws of the Company or any Affiliate.  Notwithstanding anything else herein, this indemnification will not apply to the actions or determinations made by an individual with regard to Awards granted to such individual under the Plan.

 

ARTICLE IV

SHARE LIMITATION

 

4.1                                Shares .  (a)  The aggregate number of shares of Common Stock that may be issued or used for reference purposes or with respect to which Awards may be granted under the Plan shall not exceed 6,474,128 shares (subject to any increase or decrease pursuant to Section 4.2) (the “ Share Reserve ”), which may be either authorized and unissued Common Stock or Common Stock held in or acquired for the treasury of the Company or both.  The maximum number of shares of Common Stock with respect to which Incentive Stock Options may be granted under the

 

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Plan shall be equal to 6,474,128.  With respect to Stock Appreciation Rights settled in Common Stock, upon settlement, only the number of shares of Common Stock delivered to a Participant (based on the difference between the Fair Market Value of the shares of Common Stock subject to such Stock Appreciation Right on the date such Stock Appreciation Right is exercised and the exercise price of each Stock Appreciation Right on the date such Stock Appreciation Right was awarded) shall count against the aggregate and individual share limitations set forth under Sections 4.1(a) and 4.1(b).  If any Option, Stock Appreciation Right or Other Stock-Based Awards granted under the Plan expires, terminates or is canceled for any reason without having been exercised in full, the number of shares of Common Stock underlying any unexercised Award shall again be available for the purpose of Awards under the Plan.  If any shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in shares of Common Stock awarded under the Plan to a Participant are forfeited for any reason, the number of forfeited shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in shares of Common Stock shall again be available for purposes of Awards under the Plan.  If a Tandem Stock Appreciation Right or a Limited Stock Appreciation Right is granted in tandem with an Option, such grant shall only apply once against the maximum number of shares of Common Stock which may be issued under the Plan.  Any Award under the Plan settled in cash shall not be counted against the foregoing maximum share limitations.  The maximum number of shares of Common Stock subject to any Award of Stock Options, or Stock Appreciation Rights which may be granted under the Plan during any fiscal year of the Company to any Participant shall be 1,000,000 shares (which shall be subject to any further increase or decrease pursuant to Section 4.2). The maximum grant date fair value of any Award granted to any director during any calendar year shall not exceed $1,000,000.

 

(b)                                  Individual Participant Limitations .  To the extent required by Section 162(m) of the Code for Awards under the Plan to qualify as “performance-based compensation,” the following individual Participant limitations shall only apply after the expiration of the Transition Period:

 

(i)                                      The maximum number of shares of Common Stock subject to any Award of Stock Options, or Stock Appreciation Rights, or shares of Restricted Stock, or Other Stock-Based Awards for which the grant of such Award or the lapse of the relevant Restriction Period is subject to the attainment of Performance Goals in accordance with Section 8.3(a)(ii) which may be granted under the Plan during any fiscal year of the Company to any Participant shall be 1,000,000 shares per type of Award (which shall be subject to any further increase or decrease pursuant to Section 4.2), provided that the maximum number of shares of Common Stock for all types of Awards does not exceed 5,000,000 shares (which shall be subject to any further increase or decrease pursuant to Section 4.2) during any fiscal year of the Company.  If a Tandem Stock Appreciation Right is granted or a Limited Stock Appreciation Right is granted in tandem with a Stock Option, it shall apply against the Participant’s individual share limitations for both Stock Appreciation Rights and Stock Options.

 

(ii)                                   There are no annual individual share limitations applicable to Participants on Restricted Stock or Other Stock-Based Awards for which the grant, vesting or payment (as applicable) of any such Award is not subject to the attainment of Performance Goals.

 

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(iii)                                The maximum number of shares of Common Stock subject to any Performance Award which may be granted under the Plan during any fiscal year of the Company to any Participant shall be 1,000,000 shares (which shall be subject to any further increase or decrease pursuant to Section 4.2) with respect to any fiscal year of the Company.

 

(iv)                               The maximum value of a cash payment made under a Performance Award which may be granted under the Plan with respect to any fiscal year of the Company to any Participant shall be $10,000,000.

 

(v)                                  The individual Participant limitations set forth in this Section 4.1(b) (other than Section 4.1(b)(iii)) shall be cumulative; that is, to the extent that shares of Common Stock for which Awards are permitted to be granted to a Participant during a fiscal year are not covered by an Award to such Participant in a fiscal year, the number of shares of Common Stock available for Awards to such Participant shall automatically increase in the subsequent fiscal years during the term of the Plan until used.

 

(c)                                   Annual Non-Employee Director Award Limitation .  The aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted under the Plan to any individual Non-Employee Director in any fiscal year of the Company (excluding Awards made pursuant to deferred compensation arrangements in lieu of all or a portion of cash retainers and any stock dividends payable in respect of outstanding Awards) shall not exceed $1,000,000.

 

4.2                                Changes .

 

(a)                                  The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board, the Committee or the stockholders of the Company to make or authorize (i) any adjustment, recapitalization, reorganization, stock split, or other change in the Company’s capital structure or its business, (ii) any merger or consolidation of the Company or any Affiliate, (iii) any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock, (iv) the dissolution or liquidation of the Company or any Affiliate, (v) any sale or transfer of all or part of the assets or business of the Company or any Affiliate or (vi) any other corporate act or proceeding.

 

(b)                                  Subject to the provisions of Section 11.1:

 

(i)                                      If the Company at any time subdivides (by any split, recapitalization or otherwise) the outstanding Common Stock into a greater number of shares of Common Stock, or combines (by reverse split, combination or otherwise) its outstanding Common Stock into a lesser number of shares of Common Stock, then the respective exercise prices for outstanding Awards that provide for a Participant elected exercise and the number of shares of Common Stock covered by outstanding Awards shall be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan.

 

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(ii)                                   Excepting transactions covered by Section 4.2(b)(i), if the Company effects any merger, consolidation, statutory exchange, spin-off, reorganization, sale or transfer of all or substantially all the Company’s assets or business, or other corporate transaction or event in such a manner that the Company’s outstanding shares of Common Stock are converted into the right to receive (or the holders of Common Stock are entitled to receive in exchange therefor), either immediately or upon liquidation of the Company, securities or other property of the Company or other entity (each, a Reorganization ), then, subject to the provisions of Section 11.1, (A) the aggregate number or kind of securities that thereafter may be issued under the Plan, (B) the number or kind of securities or other property (including cash) to be issued pursuant to Awards granted under the Plan (including as a result of the assumption of the Plan and the obligations hereunder by a successor entity, as applicable), or (C) the purchase price thereof, shall be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan.

 

(iii)                                If there shall occur any change in the capital structure of the Company other than those covered by Section 4.2(b)(i) or 4.2(b)(ii), including by reason of any extraordinary dividend (whether cash or equity), any conversion, any adjustment, any issuance of any class of securities convertible or exercisable into, or exercisable for, any class of equity securities of the Company, then the Committee shall adjust any Award and make such other adjustments to the Plan to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan.

 

(iv)                               Any such adjustment determined by the Committee pursuant to this Section 4.2(b) shall be final, binding and conclusive on the Company and all Participants and their respective heirs, executors, administrators, successors and permitted assigns.  Any adjustment to, or assumption or substitution of, an Award under this Section 4.2(b) shall be intended to comply with the requirements of Section 409A of the Code and Treasury Regulation §1.424-1 (and any amendments thereto), to the extent applicable.  Except as expressly provided in this Section 4.2 or in the applicable Award Agreement, a Participant shall have no additional rights under the Plan by reason of any transaction or event described in this Section 4.2.

 

(v)                                  Fractional shares of Common Stock resulting from any adjustment in Awards pursuant to Section 4.2(a) or this Section 4.2(b) shall be aggregated until, and eliminated at, the time of exercise or payment by rounding-down for fractions less than one-half and rounding-up for fractions equal to or greater than one-half.  No cash settlements shall be required with respect to fractional shares eliminated by rounding.  Notice of any adjustment shall be given by the Committee to each Participant whose Award has been adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan.

 

4.3                                Minimum Purchase Price .  Notwithstanding any provision of the Plan to the contrary, if authorized but previously unissued shares of Common Stock are issued under the Plan, such shares shall not be issued for a consideration that is less than as permitted under applicable law.

 

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ARTICLE V

ELIGIBILITY

 

5.1                                General Eligibility .  All current and prospective Eligible Individuals are eligible to be granted Awards.  Eligibility for the grant of Awards and actual participation in the Plan shall be determined by the Committee in its sole discretion.

 

5.2                                Incentive Stock Options .  Notwithstanding the foregoing, only Eligible Employees of the Company, its Subsidiaries and its Parent (if any) are eligible to be granted Incentive Stock Options under the Plan.  Eligibility for the grant of an Incentive Stock Option and actual participation in the Plan shall be determined by the Committee in its sole discretion.

 

5.3                                General Requirement .  The vesting and exercise of Awards granted to a prospective Eligible Individual are conditioned upon such individual actually becoming an Eligible Employee, Consultant or Non-Employee Director, respectively.

 

ARTICLE VI

STOCK OPTIONS

 

6.1                                Options .  Stock Options may be granted alone or in addition to other Awards granted under the Plan.  Each Stock Option granted under the Plan shall be of one of two types: (a) an Incentive Stock Option or (b) a Non-Qualified Stock Option.

 

6.2                                Grants .  The Committee shall have the authority to grant to any Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock Options.  The Committee shall have the authority to grant any Consultant or Non-Employee Director one or more Non-Qualified Stock Options.  To the extent that any Stock Option does not qualify as an Incentive Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise), such Stock Option or the portion thereof which does not so qualify shall constitute a separate Non-Qualified Stock Option.

 

6.3                                Incentive Stock Options .  Notwithstanding anything in the Plan to the contrary, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of the Participants affected, to disqualify any Incentive Stock Option under such Section 422.

 

6.4                                Terms of Options .  Options granted under the Plan shall be subject to the following terms and conditions and shall be in such form and contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable:

 

(a)                                  Exercise Price .  The exercise price per share of Common Stock subject to a Stock Option shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Stock Option shall not be less than 100% (or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, 110%) of the Fair Market Value of the Common Stock at the time of grant.

 

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(b)                                  Stock Option Term .  The term of each Stock Option shall be fixed by the Committee, provided that no Stock Option shall be exercisable more than 10 years after the date the Option is granted; and provided further that the term of an Incentive Stock Option granted to a Ten Percent Stockholder shall not exceed five years.

 

(c)                                   Exercisability .  Unless otherwise provided by the Committee in accordance with the provisions of this Section 6.4, Stock Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the time of grant.  If the Committee provides, in its discretion, that any Stock Option is exercisable subject to certain limitations (including, without limitation, that such Stock Option is exercisable only in installments or within certain time periods), the Committee may waive such limitations on the exercisability at any time at or after the time of grant in whole or in part (including, without limitation, waiver of the installment exercise provisions or acceleration of the time at which such Stock Option may be exercised), based on such factors, if any, as the Committee shall determine, in its sole discretion.

 

(d)                                  Method of Exercise .  Subject to whatever installment exercise and waiting period provisions apply under Section 6.4(c), to the extent vested, Stock Options may be exercised in whole or in part at any time during the Option term, by giving written notice of exercise to the Company specifying the number of shares of Common Stock to be purchased.  Such notice shall be accompanied by payment in full of the purchase price as follows:  (i) in cash or by check, bank draft or money order payable to the order of the Company; (ii) solely to the extent permitted by applicable law, if the Common Stock is traded on a national securities exchange, and the Committee authorizes, through a procedure whereby the Participant delivers irrevocable instructions to a broker reasonably acceptable to the Committee to deliver promptly to the Company an amount equal to the purchase price; or (iii) on such other terms and conditions as may be acceptable to the Committee (including, without limitation, with the consent of the Committee, having the Company withhold shares of Common Stock issuable upon exercise of the Stock Option, or by payment in full or in part in the form of Common Stock owned by the Participant, based on the Fair Market Value of the Common Stock on the payment date as determined by the Committee).  No shares of Common Stock shall be issued until payment therefor, as provided herein, has been made or provided for.

 

(e)                                   Non-Transferability of Options .  No Stock Option shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Participant’s lifetime, only by the Participant.  Notwithstanding the foregoing, the Committee may determine, in its sole discretion, at the time of grant or thereafter that a Non-Qualified Stock Option that is otherwise not Transferable pursuant to this Section is Transferable to a Family Member in whole or in part and in such circumstances, and under such conditions, as specified by the Committee.  A Non-Qualified Stock Option that is Transferred to a Family Member pursuant to the preceding sentence (i) may not be subsequently Transferred other than by will or by the laws of descent and distribution and (ii) remains subject to the terms of the Plan and the applicable Award Agreement.  Any shares of Common Stock acquired upon the exercise of a Non-Qualified Stock Option by a permissible transferee of a Non-Qualified Stock Option or a permissible transferee pursuant to a Transfer after the exercise of the Non-Qualified Stock Option shall be subject to the terms of the Plan and the applicable Award Agreement.

 

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(f)                                    Termination by Death or Disability .  Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by reason of death or Disability, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant (or in the case of the Participant’s death, by the legal representative of the Participant’s estate) at any time within a period of one (1) year from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options; provided, however, that, in the event of a Participant’s Termination by reason of Disability, if the Participant dies within such exercise period, all unexercised Stock Options held by such Participant shall thereafter be exercisable, to the extent to which they were exercisable at the time of death, for a period of one (1) year from the date of such death, but in no event beyond the expiration of the stated term of such Stock Options.

 

(g)                                   Involuntary Termination Without Cause .  Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by involuntary termination by the Company without Cause, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of ninety (90) days from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options.

 

(h)                                  Voluntary Resignation .  Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is voluntary (other than a voluntary termination described in Section 6.4(i)(y) hereof), all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of thirty (30) days from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options.

 

(i)                                      Termination for Cause .  Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination (x) is for Cause or (y) is a voluntary Termination (as provided in Section 6.4(h)) after the occurrence of an event that would be grounds for a Termination for Cause, all Stock Options, whether vested or not vested, that are held by such Participant shall thereupon terminate and expire as of the date of such Termination.

 

(j)                                     Unvested Stock Options .  Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, Stock Options that are not vested as of the date of a Participant’s Termination for any reason shall terminate and expire as of the date of such Termination.

 

(k)                                  Incentive Stock Option Limitations .  To the extent that the aggregate Fair Market Value (determined as of the time of grant) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Eligible Employee during any calendar year under the Plan and/or any other stock option plan of the Company, any Subsidiary or any Parent exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options.  In addition, if an Eligible Employee does not remain employed by the Company, any Subsidiary or

 

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any Parent at all times from the time an Incentive Stock Option is granted until three months prior to the date of exercise thereof (or such other period as required by applicable law), such Stock Option shall be treated as a Non-Qualified Stock Option.   Should any provision of the Plan not be necessary in order for the Stock Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may amend the Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.

 

(l)                                      Form, Modification, Extension and Renewal of Stock Options .  Subject to the terms and conditions and within the limitations of the Plan, Stock Options shall be evidenced by such form of agreement or grant as is approved by the Committee, and the Committee may (i) modify, extend or renew outstanding Stock Options granted under the Plan (provided that the rights of a Participant are not reduced without such Participant’s consent and provided further that such action does not subject the Stock Options to Section 409A of the Code without the consent of the Participant), and (ii) accept the surrender of outstanding Stock Options (to the extent not theretofore exercised) and authorize the granting of new Stock Options in substitution therefor (to the extent not theretofore exercised).  Notwithstanding the foregoing, an outstanding Option may not be modified to reduce the exercise price thereof nor may a new Option at a lower price be substituted for a surrendered Option (other than adjustments or substitutions in accordance with Section 4.2), unless such action is approved by the stockholders of the Company.

 

(m)                              Deferred Delivery of Common Stock .  The Committee may in its discretion permit Participants to defer delivery of Common Stock acquired pursuant to a Participant’s exercise of an Option in accordance with the terms and conditions established by the Committee in the applicable Award Agreement, which shall be intended to comply with the requirements of Section 409A of the Code.

 

(n)                                  Early Exercise .  The Committee may provide that a Stock Option include a provision whereby the Participant may elect at any time before the Participant’s Termination to exercise the Stock Option as to any part or all of the shares of Common Stock subject to the Stock Option prior to the full vesting of the Stock Option and such shares shall be subject to the provisions of Article VIII and be treated as Restricted Stock.  Unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Committee determines to be appropriate.

 

(o)                                  Other Terms and Conditions .  The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Non-Qualified Stock Option on a cashless basis on the last day of the term of such Option if the Participant has failed to exercise the Non-Qualified Stock Option as of such date, with respect to which the Fair Market Value of the shares of Common Stock underlying the Non-Qualified Stock Option exceeds the exercise price of such Non-Qualified Stock Option on the date of expiration of such Option, subject to Section 14.4.  Stock Options may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.

 

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ARTICLE VII

STOCK APPRECIATION RIGHTS

 

7.1                                Tandem Stock Appreciation Rights .  Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option (a “ Reference Stock Option ”) granted under the Plan (“ Tandem Stock Appreciation Rights ”).  In the case of a Non-Qualified Stock Option, such rights may be granted either at or after the time of the grant of such Reference Stock Option.  In the case of an Incentive Stock Option, such rights may be granted only at the time of the grant of such Reference Stock Option.

 

7.2                                Terms and Conditions of Tandem Stock Appreciation Rights .  Tandem Stock Appreciation Rights granted hereunder shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, and the following:

 

(a)                                  Exercise Price .  The exercise price per share of Common Stock subject to a Tandem Stock Appreciation Right shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Tandem Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Common Stock at the time of grant.

 

(b)                                  Term .  A Tandem Stock Appreciation Right or applicable portion thereof granted with respect to a Reference Stock Option shall terminate and no longer be exercisable upon the termination or exercise of the Reference Stock Option, except that, unless otherwise determined by the Committee, in its sole discretion, at the time of grant, a Tandem Stock Appreciation Right granted with respect to less than the full number of shares covered by the Reference Stock Option shall not be reduced until, and then only to the extent that the exercise or termination of the Reference Stock Option causes, the number of shares covered by the Tandem Stock Appreciation Right to exceed the number of shares remaining available and unexercised under the Reference Stock Option.

 

(c)                                   Exercisability .  Tandem Stock Appreciation Rights shall be exercisable only at such time or times and to the extent that the Reference Stock Options to which they relate shall be exercisable in accordance with the provisions of Article VI, and shall be subject to the provisions of Section 6.4(c).

 

(d)                                  Method of Exercise .  A Tandem Stock Appreciation Right may be exercised by the Participant by surrendering the applicable portion of the Reference Stock Option.  Upon such exercise and surrender, the Participant shall be entitled to receive an amount determined in the manner prescribed in this Section 7.2.  Stock Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent that the related Tandem Stock Appreciation Rights have been exercised.

 

(e)                                   Payment .  Upon the exercise of a Tandem Stock Appreciation Right, a Participant shall be entitled to receive up to, but no more than, an amount in cash and/or Common Stock (as chosen by the Committee in its sole discretion) equal in value to the excess of the Fair Market Value of one share of Common Stock over the Option exercise price per share specified in the Reference Stock Option agreement multiplied by the number of shares of Common Stock in

 

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respect of which the Tandem Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment.

 

(f)                                    Deemed Exercise of Reference Stock Option .  Upon the exercise of a Tandem Stock Appreciation Right, the Reference Stock Option or part thereof to which such Stock Appreciation Right is related shall be deemed to have been exercised for the purpose of the limitation set forth in Article IV of the Plan on the number of shares of Common Stock to be issued under the Plan.

 

(g)                                   Non-Transferability . Tandem Stock Appreciation Rights shall be Transferable only when and to the extent that the underlying Stock Option would be Transferable under Section 6.4(e) of the Plan.

 

7.3                                Non-Tandem Stock Appreciation Rights .  Non-Tandem Stock Appreciation Rights may also be granted without reference to any Stock Options granted under the Plan.

 

7.4                                Terms and Conditions of Non-Tandem Stock Appreciation Rights .  Non-Tandem Stock Appreciation Rights granted hereunder shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, and the following:

 

(a)                                  Exercise Price .  The exercise price per share of Common Stock subject to a Non-Tandem Stock Appreciation Right shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Non-Tandem Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Common Stock at the time of grant.

 

(b)                                  Term .  The term of each Non-Tandem Stock Appreciation Right shall be fixed by the Committee, but shall not be greater than 10 years after the date the right is granted.

 

(c)                                   Exercisability .  Unless otherwise provided by the Committee in accordance with the provisions of this Section 7.4, Non-Tandem Stock Appreciation Rights granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the time of grant.  If the Committee provides, in its discretion, that any such right is exercisable subject to certain limitations (including, without limitation, that it is exercisable only in installments or within certain time periods), the Committee may waive such limitations on the exercisability at any time at or after grant in whole or in part (including, without limitation, waiver of the installment exercise provisions or acceleration of the time at which such right may be exercised), based on such factors, if any, as the Committee shall determine, in its sole discretion.

 

(d)                                  Method of Exercise .  Subject to whatever installment exercise and waiting period provisions apply under Section 7.4(c), Non-Tandem Stock Appreciation Rights may be exercised in whole or in part at any time in accordance with the applicable Award Agreement, by giving written notice of exercise to the Company specifying the number of Non-Tandem Stock Appreciation Rights to be exercised.

 

(e)                                   Payment .  Upon the exercise of a Non-Tandem Stock Appreciation Right a Participant shall be entitled to receive, for each right exercised, up to, but no more than, an

 

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amount in cash and/or Common Stock (as chosen by the Committee in its sole discretion) equal in value to the excess of the Fair Market Value of one share of Common Stock on the date that the right is exercised over the Fair Market Value of one share of Common Stock on the date that the right was awarded to the Participant.

 

(f)                                    Termination .  Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, subject to the provisions of the applicable Award Agreement and the Plan, upon a Participant’s Termination for any reason, Non-Tandem Stock Appreciation Rights will remain exercisable following a Participant’s Termination on the same basis as Stock Options would be exercisable following a Participant’s Termination in accordance with the provisions of Sections 6.4(f) through 6.4(j).

 

(g)                                   Non-Transferability .  No Non-Tandem Stock Appreciation Rights shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all such rights shall be exercisable, during the Participant’s lifetime, only by the Participant.

 

7.5                                Limited Stock Appreciation Rights .  The Committee may, in its sole discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a general Stock Appreciation Right or as a Limited Stock Appreciation Right.  Limited Stock Appreciation Rights may be exercised only upon the occurrence of a Change in Control or such other event as the Committee may, in its sole discretion, designate at the time of grant or thereafter.  Upon the exercise of Limited Stock Appreciation Rights, except as otherwise provided in an Award Agreement, the Participant shall receive in cash and/or Common Stock, as determined by the Committee, an amount equal to the amount (i) set forth in Section 7.2(e) with respect to Tandem Stock Appreciation Rights, or (ii) set forth in Section 7.4(e) with respect to Non-Tandem Stock Appreciation Rights.

 

7.6                                Other Terms and Conditions .  The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Stock Appreciation Right on a cashless basis on the last day of the term of such Stock Appreciation Right if the Participant has failed to exercise the Stock Appreciation Right as of such date, with respect to which the Fair Market Value of the shares of Common Stock underlying the Stock Appreciation Right exceeds the exercise price of such Stock Appreciation Right on the date of expiration of such Stock Appreciation Right, subject to Section 14.4.  Stock Appreciation Rights may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.

 

ARTICLE VIII

RESTRICTED STOCK

 

8.1                                Awards of Restricted Stock .  Shares of Restricted Stock may be issued either alone or in addition to other Awards granted under the Plan.  The Committee shall determine the Eligible Individuals, to whom, and the time or times at which, grants of Restricted Stock shall be made, the number of shares to be awarded, the price (if any) to be paid by the Participant (subject to Section 8.2), the time or times within which such Awards may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards.

 

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The Committee may condition the grant or vesting of Restricted Stock upon the attainment of specified performance targets (including, the Performance Goals) or such other factor as the Committee may determine in its sole discretion, including to comply with the requirements of Section 162(m) of the Code.

 

8.2                                Awards and Certificates .  Eligible Individuals selected to receive Restricted Stock shall not have any right with respect to such Award, unless and until such Participant has delivered a fully executed copy of the agreement evidencing the Award to the Company, to the extent required by the Committee, and has otherwise complied with the applicable terms and conditions of such Award.  Further, such Award shall be subject to the following conditions:

 

(a)                                  Purchase Price .  The purchase price of Restricted Stock shall be fixed by the Committee.  Subject to Section 4.3, the purchase price for shares of Restricted Stock may be zero to the extent permitted by applicable law, and, to the extent not so permitted, such purchase price may not be less than par value.

 

(b)                                  Acceptance .  Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter period as the Committee may specify at grant) after the grant date, by executing a Restricted Stock agreement and by paying whatever price (if any) the Committee has designated thereunder.

 

(c)                                   Legend .  Each Participant receiving Restricted Stock shall be issued a stock certificate in respect of such shares of Restricted Stock, unless the Committee elects to use another system, such as book entries by the transfer agent, as evidencing ownership of shares of Restricted Stock.  Such certificate shall be registered in the name of such Participant, and shall, in addition to such legends required by applicable securities laws, bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:

 

“The anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or charge of the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the WideOpenWest, Inc. (the “Company”) 2017 Omnibus Incentive Plan (the “Plan”) and an Agreement entered into between the registered owner and the Company dated           .  Copies of such Plan and Agreement are on file at the principal office of the Company.”

 

(d)                                  Custody .  If stock certificates are issued in respect of shares of Restricted Stock, the Committee may require that any stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any grant of Restricted Stock, the Participant shall have delivered a duly signed stock power or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate by the Company, which would permit transfer to the Company of all or a portion of the shares subject to the Restricted Stock Award in the event that such Award is forfeited in whole or part.

 

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8.3                                Restrictions and Conditions .  The shares of Restricted Stock awarded pursuant to the Plan shall be subject to the following restrictions and conditions:

 

(a)                                  Restriction Period .  (i) The Participant shall not be permitted to Transfer shares of Restricted Stock awarded under the Plan during the period or periods set by the Committee (the “ Restriction Period ”) commencing on the date of such Award, as set forth in the Restricted Stock Award Agreement and such agreement shall set forth a vesting schedule and any event that would accelerate vesting of the shares of Restricted Stock.  Within these limits, based on service, attainment of Performance Goals pursuant to Section 8.3(a)(ii) and/or such other factors or criteria as the Committee may determine in its sole discretion, the Committee may condition the grant or provide for the lapse of such restrictions in installments in whole or in part, or may accelerate the vesting of all or any part of any Restricted Stock Award and/or waive the deferral limitations for all or any part of any Restricted Stock Award.

 

(ii)                                   If the grant of shares of Restricted Stock or the lapse of restrictions is based on the attainment of Performance Goals, the Committee shall establish the objective Performance Goals and the applicable vesting percentage of the Restricted Stock applicable to each Participant or class of Participants in writing prior to the beginning of the applicable fiscal year or at such later date as otherwise determined by the Committee and while the outcome of the Performance Goals are substantially uncertain.  Such Performance Goals may incorporate provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances.  With regard to a Restricted Stock Award that is intended to comply with Section 162(m) of the Code, to the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect.

 

(b)                                  Rights as a Stockholder .  Except as provided in Section 8.3(a) and this Section 8.3(b) or as otherwise determined by the Committee in an Award Agreement, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a holder of shares of Common Stock of the Company, including, without limitation, the right to receive dividends, the right to vote such shares and, subject to and conditioned upon the full vesting of shares of Restricted Stock, the right to tender such shares.  The Committee may, in its sole discretion, determine at the time of grant that the payment of dividends shall be deferred until, and conditioned upon, the expiration of the applicable Restriction Period.

 

(c)                                   Termination .  Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant’s Termination for any reason during the relevant Restriction Period, all Restricted Stock still subject to restriction will be forfeited in accordance with the terms and conditions established by the Committee at grant or thereafter.

 

(d)                                  Lapse of Restrictions .  If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock, the certificates for such shares shall be delivered to the Participant.  All legends shall be removed from said certificates at the time of delivery to the Participant, except as otherwise required by applicable law or other limitations imposed by the Committee.

 

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ARTICLE IX

PERFORMANCE AWARDS

 

9.1                                Performance Awards .  The Committee may grant a Performance Award to a Participant payable upon the attainment of specific Performance Goals.  The Committee may grant Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, as well as Performance Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code.  If the Performance Award is payable in shares of Restricted Stock, such shares shall be transferable to the Participant only upon attainment of the relevant Performance Goal in accordance with Article VIII.  If the Performance Award is payable in cash, it may be paid upon the attainment of the relevant Performance Goals either in cash or in shares of Restricted Stock (based on the then current Fair Market Value of such shares), as determined by the Committee, in its sole and absolute discretion.  Each Performance Award shall be evidenced by an Award Agreement in such form that is not inconsistent with the Plan and that the Committee may from time to time approve.  With respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall condition the right to payment of any Performance Award upon the attainment of objective Performance Goals established pursuant to Section 9.2(c).

 

9.2                                Terms and Conditions .  Performance Awards awarded pursuant to this Article IX shall be subject to the following terms and conditions:

 

(a)                                  Earning of Performance Award .  At the expiration of the applicable Performance Period, the Committee shall determine the extent to which the Performance Goals established pursuant to Section 9.2(c) are achieved and the percentage of each Performance Award that has been earned.

 

(b)                                  Non-Transferability .  Subject to the applicable provisions of the Award Agreement and the Plan, Performance Awards may not be Transferred during the Performance Period.

 

(c)                                   Objective Performance Goals, Formulae or Standards .  With respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for the earning of Performance Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances.  To the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.  Performance goals may also be based on an individual participant’s performance goals, as determined by the Compensation Committee.  In

 

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addition, all performance goals may be based upon the attainment of specified levels of our performance, or the performance of a subsidiary, division or other operational unit, under one or more of the measures described above relative to the performance of other corporations.  The Compensation Committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend those criteria.

 

(d)                                  Dividends .  Unless otherwise determined by the Committee at the time of grant, amounts equal to dividends declared during the Performance Period with respect to the number of shares of Common Stock covered by a Performance Award will not be paid to the Participant.

 

(e)                                   Payment .  Following the Committee’s determination in accordance with Section 9.2(a), the Company shall settle Performance Awards, in such form (including, without limitation, in shares of Common Stock or in cash) as determined by the Committee, in an amount equal to such Participant’s earned Performance Awards.

 

(f)                                    Termination .  Subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant’s Termination for any reason during the Performance Period for a given Performance Award, the Performance Award in question will vest or be forfeited in accordance with the terms and conditions established by the Committee at grant.

 

(g)                                   Accelerated Vesting .  Based on service, performance and/or such other factors or criteria, if any, as the Committee may determine, the Committee may, at or after grant, accelerate the vesting of all or any part of any Performance Award.

 

ARTICLE X

OTHER STOCK-BASED AND CASH-BASED AWARDS

 

10.1                         Other Stock-Based Awards .  The Committee is authorized to grant to Eligible Individuals Other Stock-Based Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to shares of Common Stock, including but not limited to, shares of Common Stock awarded purely as a bonus and not subject to restrictions or conditions, shares of Common Stock in payment of the amounts due under an incentive or performance plan sponsored or maintained by the Company or an Affiliate, stock equivalent units, restricted stock units, and Awards valued by reference to book value of shares of Common Stock.  Other Stock-Based Awards may be granted either alone or in addition to or in tandem with other Awards granted under the Plan.

 

Subject to the provisions of the Plan, the Committee shall have authority to determine the Eligible Individuals, to whom, and the time or times at which, such Awards shall be made, the number of shares of Common Stock to be awarded pursuant to such Awards, and all other conditions of the Awards.  The Committee may also provide for the grant of Common Stock under such Awards upon the completion of a specified Performance Period.

 

The Committee may condition the grant or vesting of Other Stock-Based Awards upon the attainment of specified Performance Goals as the Committee may determine, in its sole discretion; provided that to the extent that such Other Stock-Based Awards are intended to comply with Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for

 

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the grant or vesting of such Other Stock-Based Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain.  Such Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances.  To the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

 

10.2                         Terms and Conditions .  Other Stock-Based Awards made pursuant to this Article X shall be subject to the following terms and conditions:

 

(a)                                  Non-Transferability .  Subject to the applicable provisions of the Award Agreement and the Plan, shares of Common Stock subject to Awards made under this Article X may not be Transferred prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.

 

(b)                                  Dividends .  Unless otherwise determined by the Committee at the time of Award, subject to the provisions of the Award Agreement and the Plan, the recipient of an Award under this Article X shall not be entitled to receive, currently or on a deferred basis, dividends or dividend equivalents in respect of the number of shares of Common Stock covered by the Award.

 

(c)                                   Vesting .  Any Award under this Article X and any Common Stock covered by any such Award shall vest or be forfeited to the extent so provided in the Award Agreement, as determined by the Committee, in its sole discretion.

 

(d)                                  Price .  Common Stock issued on a bonus basis under this Article X may be issued for no cash consideration.  Common Stock purchased pursuant to a purchase right awarded under this Article X shall be priced, as determined by the Committee in its sole discretion.

 

10.3                         Other Cash-Based Awards .  The Committee may from time to time grant Other Cash-Based Awards to Eligible Individuals in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by applicable law, as it shall determine in its sole discretion.  Other Cash-Based Awards may be granted subject to the satisfaction of vesting conditions or may be awarded purely as a bonus and not subject to restrictions or conditions, and if subject to vesting conditions, the Committee may accelerate the vesting of such Awards at any time in its sole discretion.  The grant of an Other Cash-Based Award shall not require a segregation of any of the Company’s assets for satisfaction of the Company’s payment obligation thereunder.

 

ARTICLE XI

CHANGE IN CONTROL PROVISIONS

 

11.1                         Benefits .  In the event of a Change in Control of the Company (as defined below), and except as otherwise provided by the Committee in an Award Agreement, the Compensation

 

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Committee may treat a Participant’s Award in accordance with one or more of the following methods as determined by the Committee:

 

(a)                                  Awards, whether or not then vested, shall be continued, assumed, or have new rights substituted therefor, as determined by the Committee in a manner consistent with the requirements of Section 409A of the Code, and restrictions to which shares of Restricted Stock or any other Award granted prior to the Change in Control are subject shall not lapse upon a Change in Control and the Restricted Stock or other Award shall, where appropriate in the sole discretion of the Committee, receive the same distribution as other Common Stock on such terms as determined by the Committee; provided that the Committee may decide to award additional Restricted Stock or other Awards in lieu of any cash distribution.  Notwithstanding anything to the contrary herein, for purposes of Incentive Stock Options, any assumed or substituted Stock Option shall comply with the requirements of Treasury Regulation Section 1.424-1 (and any amendment thereto).

 

(b)                                  The Committee, in its sole discretion, may provide for the purchase of any Awards by the Company or an Affiliate for an amount of cash equal to the excess (if any) of the Change in Control Price (as defined below) of the shares of Common Stock covered by such Awards, over the aggregate exercise price of such Awards.  For purposes hereof, “ Change in Control Price ” shall mean the highest price per share of Common Stock paid in any transaction related to a Change in Control of the Company.

 

(c)                                   The Committee may, in its sole discretion, terminate all outstanding and unexercised Stock Options, Stock Appreciation Rights, or any Other Stock-Based Award that provides for a Participant elected exercise, effective as of the date of the Change in Control, by delivering notice of termination to each Participant at least twenty (20) days prior to the date of consummation of the Change in Control, in which case during the period from the date on which such notice of termination is delivered to the consummation of the Change in Control, each such Participant shall have the right to exercise in full all of such Participant’s Awards that are then outstanding (without regard to any limitations on exercisability otherwise contained in the Award Agreements), but any such exercise shall be contingent on the occurrence of the Change in Control, and, provided that, if the Change in Control does not take place within a specified period after giving such notice for any reason whatsoever, the notice and exercise pursuant thereto shall be null and void.

 

(d)                                  Notwithstanding any other provision herein to the contrary, the Committee may, in its sole discretion, provide for accelerated vesting or lapse of restrictions, of an Award at any time.

 

11.2                         Change in Control .  Unless otherwise determined by the Committee in the applicable Award Agreement or other written agreement with a Participant approved by the Committee, a “Change in Control” shall be deemed to occur if:

 

(a)                                  any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, TowerBrook Capital Partners, L.P. or its affiliates, or any company owned, directly or indirectly, by the stockholders of the Company in substantially

 

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the same proportions as their ownership of Common Stock of the Company), becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;

 

(b)                                  during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in paragraph (a), (c), or (d) of this Section 11.2 or a director whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board;

 

(c)                                   a merger, reorganization, or consolidation of the Company with any other corporation, other than a merger, reorganization or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than those covered by the exceptions in Section 11.2(a)) acquires more than 50% of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control of the Company; or

 

(d)                                  a complete liquidation or dissolution of the Company or the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets other than the sale or disposition of all or substantially all of the assets of the Company to a person or persons who beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale.

 

Notwithstanding the foregoing, with respect to any Award that is characterized as “nonqualified deferred compensation” within the meaning of Section 409A of the Code, an event shall not be considered to be a Change in Control under the Plan for purposes of payment of such Award unless such event is also a “change in ownership,” a “change in effective control” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code.

 

11.3                         Initial Public Offering not a Change in Control .  Notwithstanding the foregoing, for purposes of the Plan, the occurrence of the Registration Date or any change in the composition of the Board within one year following the Registration Date shall not be considered a Change in Control.

 

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ARTICLE XII

TERMINATION OR AMENDMENT OF PLAN

 

Notwithstanding any other provision of the Plan, the Board may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan (including any amendment deemed necessary to ensure that the Company may comply with any regulatory requirement referred to in Article XIV or Section 409A of the Code), or suspend or terminate it entirely, retroactively or otherwise; provided, however, that, unless otherwise required by law or specifically provided herein, the rights of a Participant with respect to Awards granted prior to such amendment, suspension or termination, may not be impaired without the consent of such Participant and, provided further, that without the approval of the holders of the Company’s Common Stock entitled to vote in accordance with applicable law, no amendment may be made that would (i) increase the aggregate number of shares of Common Stock that may be issued under the Plan (except by operation of Section 4.2); (ii) increase the maximum individual Participant limitations for a fiscal year under Section 4.1(b) (except by operation of Section 4.2); (iii) change the classification of individuals eligible to receive Awards under the Plan; (iv) decrease the minimum option price of any Stock Option or Stock Appreciation Right; (v) extend the maximum option period under Section 6.4; (vi) alter the Performance Goals for Restricted Stock, Performance Awards or Other Stock-Based Awards as set forth in Exhibit A hereto; (vii) award any Stock Option or Stock Appreciation Right in replacement of a canceled Stock Option or Stock Appreciation Right with a higher exercise price than the replacement award; or (viii) require stockholder approval in order for the Plan to continue to comply with the applicable provisions of Section 162(m) of the Code or, to the extent applicable to Incentive Stock Options, Section 422 of the Code.  In no event may the Plan be amended without the approval of the stockholders of the Company in accordance with the applicable laws of the State of Delaware to increase the aggregate number of shares of Common Stock that may be issued under the Plan, decrease the minimum exercise price of any Award, or to make any other amendment that would require stockholder approval under Financial Industry Regulatory Authority (FINRA) rules and regulations or the rules of any exchange or system on which the Company’s securities are listed or traded at the request of the Company.  Notwithstanding anything herein to the contrary, the Board may amend the Plan or any Award Agreement at any time without a Participant’s consent to comply with applicable law including Section 409A of the Code.  The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Article IV or as otherwise specifically provided herein, no such amendment or other action by the Committee shall impair the rights of any holder without the holder’s consent.

 

ARTICLE XIII

UNFUNDED STATUS OF PLAN

 

The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.  With respect to any payment as to which a Participant has a fixed and vested interest but which are not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any right that is greater than those of a general unsecured creditor of the Company.

 

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ARTICLE XIV

GENERAL PROVISIONS

 

14.1                         Legend .  The Committee may require each person receiving shares of Common Stock pursuant to a Stock Option or other Award under the Plan to represent to and agree with the Company in writing that the Participant is acquiring the shares without a view to distribution thereof.  In addition to any legend required by the Plan, the certificates for such shares may include any legend that the Committee deems appropriate to reflect any restrictions on Transfer.  All certificates for shares of Common Stock delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed or any national securities exchange system upon whose system the Common Stock is then quoted, any applicable federal or state securities law, and any applicable corporate law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

14.2                         Other Plans .  Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases.

 

14.3                         No Right to Employment/Directorship/Consultancy .  Neither the Plan nor the grant of any Option or other Award hereunder shall give any Participant or other employee, Consultant or Non-Employee Director any right with respect to continuance of employment, consultancy or directorship by the Company or any Affiliate, nor shall there be a limitation in any way on the right of the Company or any Affiliate by which an employee is employed or a Consultant or Non-Employee Director is retained to terminate such employment, consultancy or directorship at any time.

 

14.4                         Withholding of Taxes .  The Company shall have the right to deduct from any payment to be made pursuant to the Plan, or to otherwise require, prior to the issuance or delivery of shares of Common Stock or the payment of any cash hereunder, payment by the Participant of, any federal, state or local taxes required by law to be withheld.  Upon the vesting of Restricted Stock (or other Award that is taxable upon vesting), or upon making an election under Section 83(b) of the Code, a Participant shall pay all required withholding to the Company.  Any minimum statutorily required withholding obligation with regard to any Participant may be satisfied, subject to the consent of the Committee, by reducing the number of shares of Common Stock otherwise deliverable or by delivering shares of Common Stock already owned.  Any fraction of a share of Common Stock required to satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash by the Participant.

 

14.5                         No Assignment of Benefits .  No Award or other benefit payable under the Plan shall, except as otherwise specifically provided by law or permitted by the Committee, be Transferable in any manner, and any attempt to Transfer any such benefit shall be void, and any such benefit shall not in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person who shall be entitled to such benefit, nor shall it be subject to attachment or legal process for or against such person.

 

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14.6                         Listing and Other Conditions .

 

(a)                                  Unless otherwise determined by the Committee, as long as the Common Stock is listed on a national securities exchange or system sponsored by a national securities association, the issuance of shares of Common Stock pursuant to an Award shall be conditioned upon such shares being listed on such exchange or system.  The Company shall have no obligation to issue such shares unless and until such shares are so listed, and the right to exercise any Option or other Award with respect to such shares shall be suspended until such listing has been effected.

 

(b)                                  If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to an Option or other Award is or may in the circumstances be unlawful or result in the imposition of excise taxes on the Company under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise, with respect to shares of Common Stock or Awards, and the right to exercise any Option or other Award shall be suspended until, in the opinion of said counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company.

 

(c)                                   Upon termination of any period of suspension under this Section 14.6, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all shares available before such suspension and as to shares which would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Award.

 

(d)                                  A Participant shall be required to supply the Company with certificates, representations and information that the Company requests and otherwise cooperate with the Company in obtaining any listing, registration, qualification, exemption, consent or approval the Company deems necessary or appropriate.

 

14.7                         Stockholders Agreement and Other Requirements .  Notwithstanding anything herein to the contrary, as a condition to the receipt of shares of Common Stock pursuant to an Award under the Plan, to the extent required by the Committee, the Participant shall execute and deliver a stockholder’s agreement or such other documentation that shall set forth certain restrictions on transferability of the shares of Common Stock acquired upon exercise or purchase, and such other terms as the Board or Committee shall from time to time establish.  Such stockholder’s agreement or other documentation shall apply to the Common Stock acquired under the Plan and covered by such stockholder’s agreement or other documentation.  The Company may require, as a condition of exercise, the Participant to become a party to any other existing stockholder agreement (or other agreement).

 

14.8                         Governing Law .  The Plan and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws).

 

14.9                         Jurisdiction; Waiver of Jury Trial .  Any suit, action or proceeding with respect to the Plan or any Award Agreement, or any judgment entered by any court of competent

 

29



 

jurisdiction in respect of any thereof, shall be resolved only in the courts of the State of Delaware or the United States District Court for the District of Delaware and the appellate courts having jurisdiction of appeals in such courts.  In that context, and without limiting the generality of the foregoing, the Company and each Participant shall irrevocably and unconditionally (a) submit in any proceeding relating to the Plan or any Award Agreement, or for the recognition and enforcement of any judgment in respect thereof (a “ Proceeding ”), to the exclusive jurisdiction of the courts of the State of Delaware, the court of the United States of America for the District of Delaware, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree that all claims in respect of any such Proceeding shall be heard and determined in such Delaware State court or, to the extent permitted by law, in such federal court, (b) consent that any such Proceeding may and shall be brought in such courts and waives any objection that the Company and each Participant may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agree not to plead or claim the same, (c) waive all right to trial by jury in any Proceeding (whether based on contract, tort or otherwise) arising out of or relating to the Plan or any Award Agreement, (d) agree that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party, in the case of a Participant, at the Participant’s address shown in the books and records of the Company or, in the case of the Company, at the Company’s principal offices, attention General Counsel, and (e) agree that nothing in the Plan shall affect the right to effect service of process in any other manner permitted by the laws of the State of Delaware.

 

14.10                  Construction .  Wherever any words are used in the Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply.

 

14.11                  Other Benefits .  No Award granted or paid out under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its Affiliates nor affect any benefit under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.

 

14.12                  Costs .  The Company shall bear all expenses associated with administering the Plan, including expenses of issuing Common Stock pursuant to Awards hereunder.

 

14.13                  No Right to Same Benefits .  The provisions of Awards need not be the same with respect to each Participant, and such Awards to individual Participants need not be the same in subsequent years.

 

14.14                  Death/Disability .  The Committee may in its discretion require the transferee of a Participant to supply it with written notice of the Participant’s death or Disability and to supply it with a copy of the will (in the case of the Participant’s death) or such other evidence as the Committee deems necessary to establish the validity of the transfer of an Award.  The Committee may also require that the agreement of the transferee to be bound by all of the terms and conditions of the Plan.

 

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14.15                  Section 16(b) of the Exchange Act .  All elections and transactions under the Plan by persons subject to Section 16 of the Exchange Act involving shares of Common Stock are intended to comply with any applicable exemptive condition under Rule 16b-3.  The Committee may establish and adopt written administrative guidelines, designed to facilitate compliance with Section 16(b) of the Exchange Act, as it may deem necessary or proper for the administration and operation of the Plan and the transaction of business thereunder.

 

14.16                  Section 409A of the Code .  The Plan is intended to comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.  To the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto.  Notwithstanding anything herein to the contrary, any provision in the Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply with Section 409A of the Code and to the extent such provision cannot be amended to comply therewith, such provision shall be null and void.  The Company shall 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 of the Code is not so exempt or compliant or for any action taken by the Committee or the Company and, in the event that any amount or benefit under the Plan becomes subject to penalties under Section 409A of the Code, responsibility for payment of such penalties shall rest solely with the affected Participants and not with the Company.  Notwithstanding any contrary provision in the Plan or Award Agreement, any payment(s) of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) that are otherwise required to be made under the Plan to a “specified employee” (as defined under Section 409A of the Code) as a result of such employee’s separation from service (other than a payment that is not subject to Section 409A of the Code) shall be delayed for the first six (6) months following such separation from service (or, if earlier, the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) upon expiration of such delay period.

 

14.17                  Successor and Assigns .  The Plan shall be binding on all successors and permitted assigns of a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate.

 

14.18                  Severability of Provisions .  If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provisions had not been included.

 

14.19                  Payments to Minors, Etc .  Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipt thereof shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Committee, the Board, the Company, its Affiliates and their employees, agents and representatives with respect thereto.

 

14.20                  Lock-Up Agreement .  As a condition to the grant of an Award, if requested by the Company and the lead underwriter of any public offering of the Common Stock (the “ Lead Underwriter ), a Participant shall irrevocably agree not to sell, contract to sell, grant any option to

 

31



 

purchase, transfer the economic risk of ownership in, make any short sale of, pledge or otherwise transfer or dispose of, any interest in any Common Stock or any securities convertible into, derivative of, or exchangeable or exercisable for, or any other rights to purchase or acquire Common Stock (except Common Stock included in such public offering or acquired on the public market after such offering) during such period of time following the effective date of a registration statement of the Company filed under the Securities Act that the Lead Underwriter shall specify (the “ Lock-Up Period ”).  The Participant shall further agree to sign such documents as may be requested by the Lead Underwriter to effect the foregoing and agree that the Company may impose stop-transfer instructions with respect to Common Stock acquired pursuant to an Award until the end of such Lock-Up Period.

 

14.21                  Headings and Captions .  The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.

 

14.22                  Section 162(m) of the Code .  Notwithstanding any other provision of the Plan to the contrary, (i) prior to the Registration Date and during the Transition Period, the provisions of the Plan requiring compliance with Section 162(m) of the Code for Awards intended to qualify as “performance-based compensation” shall only apply to the extent required by Section 162(m) of the Code, and (ii) the provisions of the Plan requiring compliance with Section 162(m) of the Code shall not apply to Awards granted under the Plan that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

 

14.23                  Post-Transition Period .  Following the Transition Period, any Award granted under the Plan that is intended to be “performance-based compensation” under Section 162(m) of the Code, shall be subject to the approval of the material terms of the Plan by a majority of the stockholders of the Company in accordance with Section 162(m) of the Code and the treasury regulations promulgated thereunder.

 

14.24                  Company Recoupment of Awards .  A Participant’s rights with respect to any Award hereunder shall in all events be subject to (i) any right that the Company may have under any Company recoupment policy or other agreement or arrangement with a Participant, or (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.

 

ARTICLE XV

EFFECTIVE DATE OF PLAN

 

The Plan shall become effective on [ · ] which is the date of its adoption by the Board, subject to the approval of the Plan by the stockholders of the Company in accordance with the requirements of the laws of the State of Delaware.

 

ARTICLE XVI

TERM OF PLAN

 

No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the earlier of the date that the Plan is adopted or the date of stockholder approval, but Awards granted

 

32



 

prior to such tenth anniversary may extend beyond that date; provided that no Award (other than a Stock Option or Stock Appreciation Right) that is intended to be “performance-based compensation” under Section 162(m) of the Code shall be granted on or after the fifth anniversary of the stockholder approval of the Plan unless the Performance Goals are re-approved (or other designated Performance Goals are approved) by the stockholders no later than the first stockholder meeting that occurs in the fifth year following the year in which stockholders approve the Performance Goals.

 

ARTICLE XVII

NAME OF PLAN

 

The Plan shall be known as the “WideOpenWest, Inc. 2017 Omnibus Incentive Plan.”

 

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EXHIBIT A

 

PERFORMANCE GOALS

 

To the extent permitted under Section 162(m) of the Code, performance goals established for purposes of Awards intended to be “performance-based compensation” under Section 162(m) of the Code, shall be based on the attainment of certain target levels of, or a specified increase or decrease (as applicable) in one or more of the following performance goals:

 

·                   earnings per share;

·                   operating income;

·                   gross income;

·                   net income (before or after taxes);

·                   cash flow;

·                   gross profit;

·                   gross profit return on investment;

·                   gross margin return on investment;

·                   gross margin;

·                   operating margin;

·                   working capital;

·                   earnings before interest and taxes;

·                   earnings before interest, tax, depreciation and amortization;

·                   return on equity;

·                   return on assets;

·                   return on capital;

·                   return on invested capital;

·                   net revenues;

·                   gross revenues;

·                   revenue growth;

·                   annual recurring revenues;

·                   recurring revenues;

·                   license revenues;

·                   sales or market share

·                   total stockholder return

·                   economic value added

·                   specified objectives with regard to limiting the level of increase in all or a portion of our bank debt or other long-term or short-term public or private debt or other similar financial obligations, which may be calculated net of cash balances and other offsets and adjustments as may be established by the Compensation Committee

·                   the fair market value of a share of our common stock

 

A- 1



 

·                   the growth in the value of an investment in our common stock assuming the reinvestment of dividends;

·                   reduction in operating expenses.

 

With respect to Awards t hat are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, to the extent permitted under Section 162(m) of the Code, the Committee may, in its sole discretion, also exclude, or adjust to reflect, the impact of an event or occurrence that the Committee determines should be appropriately excluded or adjusted, including:

 

(a)                                  restructurings, discontinued operations, extraordinary items or events, and other unusual or non-recurring charges as described in Accounting Standards Codification 225-20, “Extraordinary and Unusual Items,” and/or management’s discussion and analysis of financial condition and results of operations appearing or incorporated by reference in the Company’s Form 10-K for the applicable year;

 

(b)                                  an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; or

 

(c)                                   a change in tax law or accounting standards required by generally accepted accounting principles.

 

Performance goals may also be based upon individual participant performance goals, as determined by the Committee, in its sole discretion.  In addition, Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code may be based on the performance goals set forth herein or on such other performance goals as determined by the Committee in its sole discretion.

 

In addition, such performance goals may be based upon the attainment of specified levels of Company (or subsidiary, division, other operational unit, administrative department or product category of the Company) performance under one or more of the measures described above relative to the performance of other corporations.  With respect to Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, to the extent permitted under Section 162(m) of the Code, but only to the extent permitted under Section 162(m) of the Code (including, without limitation, compliance with any requirements for stockholder approval), the Committee may also:

 

(a)                                  designate additional business criteria on which the performance goals may be based; or

 

(b)                                  adjust, modify or amend the aforementioned business criteria.

 

A- 2




Exhibit 10.16

 

RESTRICTED STOCK AGREEMENT

PURSUANT TO THE

WIDEOPEN WEST, INC. 2017 OMNIBUS INCENTIVE PLAN

 

*  *  *  *  *

 

Participant:                          

 

Grant Date:                         

 

Number of Shares of

Restricted Stock Granted:                          

 

*  *  *  *  *

 

THIS RESTRICTED STOCK AWARD AGREEMENT (this “ Agreement ”), dated as of the Grant Date specified above, is entered into by and between WideOpenWest, Inc., a corporation organized in the State of Delaware (the “ Company ”), and the Participant specified above, pursuant to the WideOpenWest, Inc 2017 Omnibus Incentive Plan, as in effect and as amended from time to time (the “ Plan ”), which is administered by the Committee; and

 

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the shares of Restricted Stock provided herein to the Participant.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

 

1.             Incorporation By Reference; Plan Document Receipt .  This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein.  Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

 

2.             Grant of Restricted Stock Award .  The Company hereby grants to the Participant, as of the Grant Date specified above, the number of shares of Restricted Stock specified above.  Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other

 



 

property, distributions or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan or this Agreement.  Subject to Section 5 hereof, the Participant shall not have the rights of a stockholder in respect of the shares underlying this Award until such shares are delivered to the Participant in accordance with Section 4 hereof.

 

3.             Vesting .

 

(a)           Subject to the provisions of Sections 3(b) and 3(c) hereof, t he Restricted Stock subject to this grant shall become unrestricted and vested as follows, provided that the Participant has not incurred a Termination prior to each such vesting date:

 

Vesting Date

 

Number of Shares

[•]

 

[•]

 

There shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the Participant’s continued service with the Company or any of its Subsidiaries on each applicable vesting date.

 

(b)           Committee Discretion to Accelerate Vesting .  Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of the Restricted Stock at any time and for any reason.

 

(c)           [Change in Control .]

 

(d)           Forfeiture .  Subject to the Committee’s discretion to accelerate vesting hereunder, all unvested shares of Restricted Stock shall be immediately forfeited upon the Participant’s Termination for any reason.

 

4.             Period of Restriction; Delivery of Unrestricted Shares .   During the Period of Restriction, the Restricted Stock shall bear a legend as described in Section 8.2(c) of the Plan.  When shares of Restricted Stock awarded by this Agreement become vested, the Participant shall be entitled to receive unrestricted shares and if the Participant’s stock certificates contain legends restricting the transfer of such shares, the Participant shall be entitled to receive new stock certificates free of such legends (except any legends requiring compliance with securities laws).

 

5.             Dividends and Other Distributions; Voting .  Participants holding Restricted Stock shall be entitled to receive all dividends and other distributions paid with respect to such shares, provided that any such dividends or other distributions will be subject to the same vesting requirements as the underlying Restricted Stock and shall be paid at the time the Restricted Stock becomes vested pursuant to Section 3 hereof.  If any dividends or distributions are paid in shares, the shares shall be deposited with the Company and shall be subject to the same restrictions on transferability and forfeitability as the Restricted Stock with respect to which they were paid.  The Participant may exercise full voting rights with respect to the Restricted Stock granted hereunder.

 

6.             Non-Transferability .  The shares of Restricted Stock, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not, prior to

 

2



 

vesting, be sold, exchanged, transferred, assigned or otherwise disposed of in any way by the Participant (or any beneficiary of the Participant), other than by testamentary disposition by the Participant or the laws of descent and distribution.  Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way any of the Restricted Stock, or the levy of any execution, attachment or similar legal process upon the Restricted Stock, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

7.             Governing Law .  All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.

 

8.             Withholding of Tax .  The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the Restricted Stock and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement.  Any minimum statutorily required withholding obligation with regard to the Participant may be satisfied by reducing the amount of cash or shares of Common Stock otherwise deliverable to the Participant hereunder.

 

9.             Section 83(b) .  If the Participant properly elects (as required by Section 83(b) of the Code) within 30 days after the issuance of the Restricted Stock to include in gross income for federal income tax purposes in the year of issuance the Fair Market Value of such shares of Restricted Stock, the Participant shall pay to the Company or make arrangements satisfactory to the Company to pay to the Company upon such election, any federal, state or local taxes required to be withheld with respect to the Restricted Stock.  If the Participant shall fail to make such payment, the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to the Restricted Stock, as well as the rights set forth in Section 8 hereof.  The Participant acknowledges that it is the Participant’s sole responsibility, and not the Company’s, to file timely and properly the election under Section 83(b) of the Code and any corresponding provisions of state tax laws if the Participant elects to make such election, and the Participant agrees to timely provide the Company with a copy of any such election.

 

10.          Legend .  All certificates representing the Restricted Stock shall have endorsed thereon the legend set forth in Section 8.2(c) of the Plan.  Notwithstanding the foregoing, in no event shall the Company be obligated to deliver to the Participant a certificate representing the Restricted Stock prior to the vesting dates set forth above.

 

11.          Securities Representations .  The shares of Restricted Stock are being issued to the Participant and this Agreement is being made by the Company in reliance upon the following express representations and warranties of the Participant.  The Participant acknowledges, represents and warrants that:

 

3



 

(a)           The Participant has been advised that the Participant may be an “affiliate” within the meaning of Rule 144 under the Securities Act and in this connection the Company is relying in part on the Participant’s representations set forth in this Section 11.

 

(b)           If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the shares of Restricted Stock must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to the shares of Restricted Stock and the Company is under no obligation to register the shares of Restricted Stock (or to file a “re-offer prospectus”).

 

(c)           If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the Participant understands that (i) the exemption from registration under Rule 144 will not be available unless (A) a public trading market then exists for the Common Stock of the Company, (B) adequate information concerning the Company is then available to the public, and (C) other terms and conditions of Rule 144 or any exemption therefrom are complied with, and (ii) any sale of the shares of vested Restricted Stock hereunder may be made only in limited amounts in accordance with the terms and conditions of Rule 144 or any exemption therefrom.

 

12.          Entire Agreement; Amendment .  This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan.  This Agreement may also be modified or amended by a writing signed by both the Company and the Participant.  The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

13.          Notices .  Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company.  Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.

 

14.          Acceptance .  As required by Section 8.2 of the Plan, the Participant shall forfeit the Restricted Stock if the Participant does not execute this Agreement within a period of sixty (60) days from the date that the Participant receives this Agreement (or such other period as the Committee shall provide).

 

15.          No Right to Employment .  Any questions as to whether and when there has been a Termination and the cause of such Termination shall be determined in the sole discretion of the Committee.  Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause.

 

4



 

16.          Transfer of Personal Data .  The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the Restricted Stock awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan).  This authorization and consent is freely given by the Participant.

 

17.          Compliance with Laws .  The issuance of the Restricted Stock or unrestricted shares pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto.  The Company shall not be obligated to issue the Restricted Stock or any of the shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

18.          Section 409A .  Notwithstanding anything herein or in the Plan to the contrary, the shares of Restricted Stock are intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

 

19.          Binding Agreement; Assignment .  This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.  The Participant shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.

 

20.          Headings .  The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

21.          Counterparts .  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

22.          Further Assurances .  Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

23.          Severability .  The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

24.          Acquired Rights .  The Participant acknowledges and agrees that:  (a) the Company may terminate or amend the Plan at any time; (b) the award of Restricted Stock made under this Agreement is completely independent of any other award or grant and is made at the

 

5



 

sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Restricted Stock awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) a ny benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

[Remainder of Page Intentionally Left Blank]

 

6



 

IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date first written above.

 

 

WideOpenWest, Inc.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

PARTICIPANT

 

 

 

 

 

Name:

 

 

7




Exhibit 10.17

 

RESTRICTED STOCK UNIT AGREEMENT

PURSUANT TO THE

WIDEOPEN WEST, INC. 2017 OMNIBUS INCENTIVE PLAN

 

*  *  *  *  *

 

Participant:                       

 

Grant Date:                      

 

Number of Restricted Stock Units Granted:                   

 

*  *  *  *  *

 

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “ Agreement ”), dated as of the Grant Date specified above, is entered into by and between WideOpenWest, Inc., a corporation organized in the State of Delaware (the “ Company ”), and the Participant specified above, pursuant to the WideOpenWest, Inc. 2017 Omnibus Incentive Plan, as in effect and as amended from time to time (the “ Plan ”), which is administered by the Committee; and

 

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“ RSUs ”) provided herein to the Participant.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

 

1.             Incorporation By Reference; Plan Document Receipt .  This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein.  Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

 

2.             Grant of Restricted Stock Unit Award .  The Company hereby grants to the Participant, as of the Grant Date specified above, the number of RSUs specified above.  Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of Common Stock underlying the RSUs, except as otherwise specifically provided for in the Plan or this Agreement.

 



 

3.             Vesting .

 

(a)           Subject to the provisions of Sections 3(b) and 3(c) hereof, the RSUs subject to this Award shall become vested as follows, provided that the Participant has not incurred a Termination prior to each such vesting date:

 

Vesting Date

 

Number of RSUs

[•]

 

[•]

 

There shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the Participant’s continued service with the Company or any of its Subsidiaries on each applicable vesting date.

 

(b)           Committee Discretion to Accelerate Vesting .  Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of the RSUs at any time and for any reason.

 

(c)           [Change in Control .]

 

(d)           Forfeiture .  Subject to the Committee’s discretion to accelerate vesting hereunder, all unvested RSUs shall be immediately forfeited upon the Participant’s Termination for any reason.

 

4.             Delivery of Shares .

 

(a)           General .  Subject to the provisions of Sections 4(b) and 4(c) hereof, within thirty (30) days following the vesting of the RSUs, the Participant shall receive the number of shares of Common Stock that correspond to the number of RSUs that have become vested on the applicable vesting date; provided that the Participant shall be obligated to pay to the Company the aggregate par value of the shares of Common Stock to be issued within ten (10) days following the issuance of such shares unless such shares have been issued by the Company from the Company’s treasury.

 

(b)           Blackout Periods .  If the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 4(a) hereof, such distribution shall be instead made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (A) the end of the calendar year in which such distribution would otherwise have been made and (B) a date that is immediately prior to the expiration of two and one-half months following the date such distribution would otherwise have been made hereunder.

 

(c)           Deferrals .  If permitted by the Company, the Participant may elect, subject to the terms and conditions of the Plan and any other applicable written plan or procedure adopted by the Company from time to time for purposes of such election, to defer the distribution of all or any portion of the shares of Common Stock that would otherwise be distributed to the Participant hereunder (the “ Deferred Shares ”), consistent with the requirements of Section 409A of the Code.  Upon the vesting of RSUs that have been so deferred, the

 

2



 

applicable number of Deferred Shares shall be credited to a bookkeeping account established on the Participant’s behalf (the “ Account ”).  Subject to Section 5 hereof, the number of shares of Common Stock equal to the number of Deferred Shares credited to the Participant’s Account shall be distributed to the Participant in accordance with the terms and conditions of the Plan and the other applicable written plans or procedures of the Company, consistent with the requirements of Section 409A of the Code.

 

5.             Dividends; Rights as Stockholder .  Cash dividends on shares of Common Stock issuable hereunder shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in shares of Common Stock and shall be held uninvested and without interest and paid in cash at the same time that the shares of Common Stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof.  Stock dividends on shares of Common Stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such stock dividends shall be paid in shares of Common Stock at the same time that the shares of Common Stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof.  Except as otherwise provided herein, the Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by any RSU unless and until the Participant has become the holder of record of such shares.

 

6.             Non-Transferability .  No portion of the RSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the RSUs as provided herein, unless and until payment is made in respect of vested RSUs in accordance with the provisions hereof and the Participant has become the holder of record of the vested shares of Common Stock issuable hereunder.

 

7.             Governing Law .  All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.

 

8.             Withholding of Tax .  The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the RSUs and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement.  Any minimum statutorily required withholding obligation with regard to the Participant may be satisfied by reducing the amount of cash or shares of Common Stock otherwise deliverable to the Participant hereunder.

 

9.             Legend .  The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Common Stock issued pursuant to this Agreement.  The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of

 

3



 

Common Stock acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section 9.

 

10.          Securities Representations .  This Agreement is being entered into by the Company in reliance upon the following express representations and warranties of the Participant.  The Participant hereby acknowledges, represents and warrants that:

 

(a)           The Participant has been advised that the Participant may be an “affiliate” within the meaning of Rule 144 under the Securities Act and in this connection the Company is relying in part on the Participant’s representations set forth in this Section 10.

 

(b)           If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the shares of Common Stock issuable hereunder must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such shares of Common Stock and the Company is under no obligation to register such shares of Common Stock (or to file a “re-offer prospectus”).

 

(c)           If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the Participant understands that (i) the exemption from registration under Rule 144 will not be available unless (A) a public trading market then exists for the Common Stock of the Company, (B) adequate information concerning the Company is then available to the public, and (C) other terms and conditions of Rule 144 or any exemption therefrom are complied with, and (ii) any sale of the shares of Common Stock issuable hereunder may be made only in limited amounts in accordance with the terms and conditions of Rule 144 or any exemption therefrom.

 

11.          Entire Agreement; Amendment .  This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan.  This Agreement may also be modified or amended by a writing signed by both the Company and the Participant.  The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

12.          Notices .  Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company.  Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.

 

13.          No Right to Employment .  Any questions as to whether and when there has been a Termination and the cause of such Termination shall be determined in the sole discretion of the Committee.  Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause.

 

4



 

14.          Transfer of Personal Data .  The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the RSUs awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan).  This authorization and consent is freely given by the Participant.

 

15.          Compliance with Laws .  The grant of RSUs and the issuance of shares of Common Stock hereunder shall be subject to, and shall comply with, any applicable requirements o f any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto.  The Company shall not be obligated to issue the RSUs or any shares of Common Stock pursuant to this Agreement if any such issuance would violate any such requirements.  As a condition to the settlement of the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.

 

16.          Binding Agreement; Assignment .  This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.  The Participant shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.

 

17.          Headings .  The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

18.          Counterparts .  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

19.          Further Assurances .  Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

20.          Severability .  The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

21.          Acquired Rights .  The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the Award of RSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Participant any right to any grants or awards in the future

 

5



 

whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

[Remainder of Page Intentionally Left Blank]

 

6



 

IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date first written above.

 

 

WideOpenWest, Inc.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

PARTICIPANT

 

 

 

 

 

 

 

 

Name:

 

 

7




Exhibit 10.18

 

INCENTIVE STOCK OPTION AGREEMENT

PURSUANT TO THE

WideOpenWest, Inc. 2017 OMNIBUS INCENTIVE PLAN

 

*  *  *  *  *

 

Participant:                  

 

Grant Date:                     

 

Per Share Exercise Price:  $          

 

Number of Shares subject to this Option:                     

 

*  *  *  *  *

 

THIS INCENTIVE STOCK OPTION AWARD AGREEMENT (this “ Agreement ”), dated as of the Grant Date specified above, is entered into by and between WideOpenWest, Inc., a corporation organized in the State of Delaware (the “ Company ”), and the Participant specified above, pursuant to the WideOpenWest, Inc. 2017 Omnibus Incentive Plan, as in effect and as amended from time to time (the “ Plan ”), which is administered by the Committee; and

 

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Incentive Stock Option provided for herein to the Participant.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

 

1.             Incorporation By Reference; Plan Document Receipt .  This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein.  Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

 

2.             Grant of Option .  The Company hereby grants to the Participant, as of the Grant Date specified above, an Incentive Stock Option (this “ Option ”) to acquire from the Company at the Per Share Exercise Price specified above, the aggregate number of shares of Common Stock specified above (the “ Option Shares ”).  Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides,

 



 

or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason.  The Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by the Option unless and until the Participant has become the holder of record of such shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan or this Agreement.

 

3.             Tax Matters .  The Option granted hereunder is intended to qualify as an “incentive stock option” under Section 422 of the Code.  Notwithstanding the foregoing, the Option will not qualify as an “incentive stock option,” among other events, (a) if the Participant disposes of the Option Shares at any time during the two-year period following the date of this Agreement or the one-year period following the date of any exercise of the Option; (b) except in the event of the Participant’s death or Disability, if the Participant is not employed by the Company, a Parent or a Subsidiary at all times during the period beginning on the date of this Agreement and ending on the day that is three months before the date of any exercise of the Option; or (c) to the extent that the aggregate fair market value of the Common Stock subject to “incentive stock options” held by the Participant which become exercisable for the first time in any calendar year (under all plans of the Company, a Parent or a Subsidiary) exceeds $100,000.  For purposes of clause (c) above, the “fair market value” of the Common Stock shall be determined as of the Grant Date.  To the extent that the Option does not qualify as an “incentive stock option,” it shall not affect the validity of the Option and shall constitute a separate non-qualified stock option.  In the event that the Participant disposes of the Option Shares within either two (2) years following the Grant Date or one year following the date of exercise of the Option, the Participant must deliver to the Company, within seven (7) days following such disposition, a written notice specifying the date on which such shares were disposed of, the number of shares so disposed, and, if such disposition was by a sale or exchange, the amount of consideration received.

 

4.             Vesting and Exercise .

 

(a)           Vesting .  Subject to the provisions of Sections 4(b) and 4(c) hereof, the Option shall vest and become exercisable as follows, provided that the Participant has not incurred a Termination prior to each such vesting date:

 

Vesting Date

 

Number of Shares

[ · ]

 

[ · ]

 

There shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the Participant’s continued service with the Company or any of its Subsidiaries on each applicable vesting date.  Upon expiration of the Option, the Option shall be cancelled and no longer exercisable.

 

(b)           Committee Discretion to Accelerate Vesting .  Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of the Option at any time and for any reason.

 

(c)           [Change in Control .]

 

2



 

(d)           Expiration .  Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all portions of the Option (whether vested or not vested) shall expire and shall no longer be exercisable after the expiration of ten (10) years from the Grant Date.

 

5.             Termination .  Subject to the terms of the Plan and this Agreement, the Option, to the extent vested at the time of the Participant’s Termination, shall remain exercisable as follows:

 

(a)           Termination due to Death or Disability .  In the event of the Participant’s Termination by reason of death or Disability, the vested portion of the Option shall remain exercisable until the earlier of (i) one (1) year from the date of such Termination, and (ii) the expiration of the stated term of the Option pursuant to Section 4(d) hereof.

 

(b)           Involuntary Termination Without Cause .  In the event of the Participant’s involuntary Termination by the Company without Cause, the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination, and (ii) the expiration of the stated term of the Option pursuant to Section 4(d) hereof.

 

(c)           Voluntary Resignation .  In the event of the Participant’s voluntary Termination (other than a voluntary Termination described in Section 5(d) hereof), the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination, and (ii) the expiration of the stated term of the Option pursuant to Section 4(d) hereof.

 

(d)           Termination for Cause .  In the event of the Participant’s Termination for Cause or in the event of the Participant’s voluntary Termination (as provided in Section 5(c) hereof) after an event that would be grounds for a Termination for Cause, the Participant’s entire Option (whether or not vested) shall terminate and expire upon such Termination.

 

(e)           Treatment of Unvested Options upon Termination .  Any portion of the Option that is not vested as of the date of the Participant’s Termination for any reason shall terminate and expire as of the date of such Termination.

 

6.             Method of Exercise and Payment .  Subject to Section 9 hereof, to the extent that the Option has become vested and exercisable with respect to a number of shares of Common Stock as provided herein, the Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with Sections 6.4(c) and 6.4(d) of the Plan, including, without limitation, by the filing of any written form of exercise notice as may be required by the Committee and payment in full of the Per Share Exercise Price specified above multiplied by the number of shares of Common Stock underlying the portion of the Option exercised.

 

7.             Non-Transferability .  The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned or otherwise disposed of in any way by the Participant (or any beneficiary(ies) of the Participant), other than by testamentary disposition by the Participant or the laws of descent and distribution.  Any attempt to sell, exchange, transfer, assign, pledge,

 

3



 

encumber or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

8.             Governing Law .  All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.

 

9.             Withholding of Tax .  The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the Option and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement. Any minimum statutorily required withholding obligation with regard to the Participant may be satisfied by reducing the amount of cash or shares of Common Stock otherwise deliverable upon exercise of the Option.

 

10.          Entire Agreement; Amendment .  This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan.  This Agreement may also be modified or amended by a writing signed by both the Company and the Participant.  The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

11.          Notices .  Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company.  Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.

 

12.          No Right to Employment .  Any questions as to whether and when there has been a Termination and the cause of such Termination shall be determined in the sole discretion of the Committee.  Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without cause.

 

13.          Transfer of Personal Data .  The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan).  This authorization and consent is freely given by the Participant.

 

4



 

14.          Compliance with Laws .  The issuance of the Option (and the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto.  The Company shall not be obligated to issue the Option or any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

15.          Section 409A .  Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

 

16.          Binding Agreement; Assignment .  This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.  The Participant shall not assign (except in accordance with Section 7 hereof) any part of this Agreement without the prior express written consent of the Company.

 

17.          Headings .  The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

18.          Counterparts .  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

19.          Further Assurances .  Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

20.          Severability .  The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

21.          Acquired Rights .  The Participant acknowledges and agrees that:  (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

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[Remainder of Page Intentionally Left Blank]

 

6



 

IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date first written above.

 

 

WideOpenWest, Inc. By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

PARTICIPANT

 

 

 

 

 

Name:

 

 

7




Exhibit 10.19

 

NONQUALIFIED STOCK OPTION AGREEMENT

PURSUANT TO THE

WIDEOPEN WEST, INC. 2017 OMNIBUS INCENTIVE PLAN

 

*  *  *  *  *

 

Participant:                                  

 

Grant Date:                                   

 

Per Share Exercise Price:  $         

 

Number of Shares subject to this Option:                                                

 

*  *  *  *  *

 

THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “ Agreement ”), dated as of the Grant Date specified above, is entered into by and between WideOpenWest, Inc., a corporation organized in the State of Delaware (the “ Company ”), and the Participant specified above, pursuant to the WideOpenWest, Inc. 2017 Omnibus Incentive Plan, as in effect and as amended from time to time (the “ Plan ”), which is administered by the Committee; and

 

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Non-Qualified Stock Option provided for herein to the Participant.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

 

1.             Incorporation By Reference; Plan Document Receipt .  This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein.  Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.  No part of the Option granted hereby is intended to qualify as an “incentive stock option” under Section 422 of the Code.

 

2.             Grant of Option .  The Company hereby grants to the Participant, as of the Grant Date specified above, a Non-Qualified Stock Option (this “ Option ”) to acquire from the Company at the Per Share Exercise Price specified above, the aggregate number of shares of

 



 

Common Stock specified above (the “ Option Shares ”).  Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason.  The Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by the Option unless and until the Participant has become the holder of record of such shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan or this Agreement.

 

3.             Vesting and Exercise .

 

(a)           Vesting .  Subject to the provisions of Sections 3(b) and 3(c) hereof, the Option shall vest and become exercisable as follows, provided that the Participant has not incurred a Termination prior to each such vesting date:

 

Vesting Date

 

Number of Shares

[•]

 

[•]

 

There shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the Participant’s continued service with the Company or any of its Subsidiaries on each applicable vesting date.  Upon expiration of the Option, the Option shall be cancelled and no longer exercisable.

 

(b)           Committee Discretion to Accelerate Vesting .  Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of the Option at any time and for any reason.

 

(c)           [Change in Control .]

 

(d)           Expiration .  Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all portions of the Option (whether vested or not vested) shall expire and shall no longer be exercisable after the expiration of ten (10) years from the Grant Date.

 

4.             Termination .  Subject to the terms of the Plan and this Agreement, the Option, to the extent vested at the time of the Participant’s Termination, shall remain exercisable as follows:

 

(a)           Termination due to Death or Disability .  In the event of the Participant’s Termination by reason of death or Disability, the vested portion of the Option shall remain exercisable until the earlier of (i) one (1) year from the date of such Termination, and (ii) the expiration of the stated term of the Option pursuant to Section 3(d) hereof; provided , however , that in the case of a Termination due to Disability, if the Participant dies within such one (1) year exercise period, any unexercised Option held by the Participant shall thereafter be exercisable by the legal representative of the Participant’s estate, to the extent to which it was exercisable at the time of death, for a period of one (1) year from the date of death, but in no event beyond the expiration of the stated term of the Option pursuant to Section 3(d) hereof.

 

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(b)           Involuntary Termination Without Cause .  In the event of the Participant’s involuntary Termination by the Company without Cause, the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination, and (ii) the expiration of the stated term of the Option pursuant to Section 3(d) hereof.

 

(c)           Voluntary Resignation .  In the event of the Participant’s voluntary Termination (other than a voluntary Termination described in Section 4(d) hereof), the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination, and (ii) the expiration of the stated term of the Option pursuant to Section 3(d) hereof.

 

(d)           Termination for Cause .  In the event of the Participant’s Termination for Cause or in the event of the Participant’s voluntary Termination (as provided in Section 4(c) hereof) after an event that would be grounds for a Termination for Cause, the Participant’s entire Option (whether or not vested) shall terminate and expire upon such Termination.

 

(e)           Treatment of Unvested Options upon Termination .  Any portion of the Option that is not vested as of the date of the Participant’s Termination for any reason shall terminate and expire as of the date of such Termination.

 

5.             Method of Exercise and Payment .  Subject to Section 8 hereof, to the extent that the Option has become vested and exercisable with respect to a number of shares of Common Stock as provided herein, the Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with Sections 6.4(c) and 6.4(d) of the Plan, including, without limitation, by the filing of any written form of exercise notice as may be required by the Committee and payment in full of the Per Share Exercise Price specified above multiplied by the number of shares of Common Stock underlying the portion of the Option exercised.

 

6.             Non-Transferability .  The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned or otherwise disposed of in any way by the Participant (or any beneficiary of the Participant), other than by testamentary disposition by the Participant or the laws of descent and distribution.  Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the Option to be Transferred to a Family Member for no value, provided that such Transfer shall only be valid upon execution of a written instrument in form and substance acceptable to the Committee in its sole discretion evidencing such Transfer and the transferee’s acceptance thereof signed by the Participant and the transferee, and provided, further, that the Option may not be subsequently Transferred other than by will or by the laws of descent and distribution or to another Family Member (as permitted by the Committee in its sole discretion) in accordance with the terms of the Plan and this Agreement, and shall remain subject to the terms of the Plan and this Agreement.  Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

3



 

7.             Governing Law .  All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.

 

8.             Withholding of Tax .  The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the Option and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement.  Any minimum statutorily required withholding obligation with regard to the Participant may be satisfied by reducing the amount of cash or shares of Common Stock otherwise deliverable upon exercise of the Option.

 

9.             Entire Agreement; Amendment .  This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan.  This Agreement may also be modified or amended by a writing signed by both the Company and the Participant.  The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

10.          Notices .  Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company.  Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.

 

11.          No Right to Employment .  Any questions as to whether and when there has been a Termination and the cause of such Termination shall be determined in the sole discretion of the Committee.  Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause.

 

12.          Transfer of Personal Data .  The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan).  This authorization and consent is freely given by the Participant.

 

13.          Compliance with Laws .  The issuance of the Option (and the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act,

 

4



 

the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto.  The Company shall not be obligated to issue the Option or any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

14.          Section 409A .  Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

 

15.          Binding Agreement; Assignment .  This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.  The Participant shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.

 

16.          Headings .  The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

17.          Counterparts .  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

18.          Further Assurances .  Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

19.          Severability .  The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

20.          Acquired Rights .  The Participant acknowledges and agrees that:  (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) a ny benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

[Remainder of Page Intentionally Left Blank]

 

5



 

IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date first written above.

 

 

WIDEOPEN WEST, INC.

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

PARTICIPANT

 

 

 

 

 

 

 

 

Name:

 

 

6




Exhibit 10.20

 

STOCKHOLDERS’ AGREEMENT

 

This STOCKHOLDERS’ AGREEMENT (as the same may be amended from time to time in accordance with its terms, the “ Agreement ”) is made as of [ · ], 2017, among (i) WideOpenWest, Inc. (the “ Company ”), (ii) the Avista Investor Group, (iii) the Crestview Investor Group (each of the Avista Investor Group and the Crestview Investor Group, an “ Investor ” and collectively, the “ Investors ”), (iv) each of the Management Stockholders named on the signature pages hereto and (v) the Persons who from time to time become stockholders of the Company and execute and deliver a Joinder Agreement, substantially as set forth on Exhibit A hereto.

 

WHEREAS, in connection with the consummation by the Company of an initial public offering of its Common Stock (the “ IPO ”), the parties hereto desire to enter into this Agreement to govern certain of their rights, duties and obligations with respect to their ownership of shares of Common Stock after consummation of the IPO.

 

THEREFORE, in consideration of the promises and mutual covenants and agreements contained herein, the parties mutually agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                     Definitions . As used in this Agreement, the following terms shall have the meanings set forth below:

 

Affiliate ” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. Notwithstanding the foregoing, for purposes hereof, none of the Investors, the Company, or any of their respective Subsidiaries shall be considered Affiliates of any portfolio operating company in which the Investors or any of their investment fund Affiliates have made a debt or equity investment, and none of the Investors or any of their Affiliates shall be considered an Affiliate of (a) the Company or any of its Subsidiaries or (b) each other.

 

Avista Investor Group ” means, collectively, Avista Capital Partners, L.P., Avista Capital Partners (Offshore), L.P., Avista Capital Partners III, L.P., Avista Capital Partners (Offshore) III, L.P., Avista Capital Partners (Offshore) III-A, L.P., ACP Racecar Co-Invest, LLC and ACP Racecar Co-Invest II, LLC and any of their respective Affiliates who beneficially own Common Stock from time to time.

 

beneficial ownership ” and “ beneficially own ” and similar terms have the meaning set forth in Rule 13d-3 under the Exchange Act; provided, however, that no Stockholder shall be deemed to beneficially own any securities of the Company held by any other Stockholder solely

 



 

by virtue of the provisions of this Agreement (other than this definition which shall be deemed to be read for this purpose without the proviso hereto).

 

Board ” means the Board of Directors of the Company.

 

Business Day ” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York, are authorized or required by law to close.

 

Common Stock ” means common stock, par value $0.01 per share, of the Company, and any securities into which such shares of common stock shall have been changed or any securities resulting from any reclassification or recapitalization of such shares of common stock.

 

Company ” has the meaning set forth in the Preamble.

 

Company Group ” has the meaning set forth in Section 6.5(a) .

 

Coordination Committee ” has the meaning set forth in Section 5.1(a) .

 

Crestview Investor Group ” means, collectively, Crestview W1 Co Investors, LLC, Crestview W1 TE Holdings, LLC, and Crestview W1 Holdings, L.P. and any of their respective Affiliates who beneficially own Common Stock from time to time.

 

Determination Time ” has the meaning set forth in Section 5.2(b) .

 

Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, as the same may be amended from time to time.

 

Family Group ” shall mean, with respect to a natural Person, such Person’s spouse, ancestors and descendants (whether natural or adopted) and any trust or other entity (including a partnership or limited liability company) solely for the benefit of such Person and/or for such Person’s spouse, their respective ancestors or descendants.

 

FCC ” means the U.S. Federal Communications Commission.

 

GAAP ” means generally accepted accounting principles in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession that are in effect from time to time.

 

Indemnified Liabilities ” has the meaning set forth in Section 6.5 .

 

Indemnitees ” has the meaning set forth in Section 6.5 .

 

Initial Shares ” means, with respect to any Management Stockholder, all vested and unvested Common Stock owned by such Management Stockholder as of the date hereof, after

 

2



 

giving effect to all Common Stock issued or received at the time of the IPO but not any Common Stock issued or received after the time of the IPO.

 

IPO ” has the meaning set forth in the Recitals.

 

Investors ” has the meaning set forth in the Preamble. For purposes of clarity, there are two Investors: the Avista Investor Group, which shall collectively be deemed an “ Investor ,” and the Crestview Investor Group, which shall collectively be deemed an “ Investor .” Any determination, appointment, designation, consent or approval to be made, given or withheld by the Avista Investor Group in its capacity as an Investor under this Agreement shall be made, given or withheld by the Person or Persons holding a majority of the shares of Common Stock that are then deemed to be held by the Avista Investor Group and any determination, appointment, designation, consent or approval to be made, given or withheld by the Crestview Investor Group under this Agreement shall be made, given or withheld by the Person or Persons holding a majority of the shares of Common Stock that are then deemed to be held by the Crestview Investor Group.

 

Investor Director Designee ” has the meaning set forth in Section 3.1(a) .

 

Investor Ownership Percentage ” means, with respect to any Investor and as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the number of shares of Common Stock held or beneficially owned by such Investor and its Affiliates as of such date and the denominator of which is the aggregate number of shares of Common Stock issued and outstanding as of such date.

 

Law ” with respect to any Person, means (a) all provisions of all laws, statutes, ordinances, rules, regulations, permits, certificates or orders of any governmental authority applicable to such Person or any of its assets or property or to which such Person or any of its assets or property is subject and (b) all judgments, injunctions, orders and decrees of all courts and arbitrators in proceedings or actions in which such Person is a party or by which it or any of its assets or properties is or may be bound or subject.

 

Management Ownership Percentage ” has the meaning set forth in Section 5.2(b) .

 

Management Permitted Transferee ” means (i) in the case of a natural Person, by will or pursuant to applicable laws of descent and distribution or among such Person’s Family Group and (ii) in the case of a non-natural Person, (A) to its members, partners or shareholders (including by way of distribution) or (B) among its wholly-owned Affiliates.

 

Management Stockholder ” means each officer or employee of the Company party to this Agreement who owns Common Stock.

 

Minimum Ownership Percentage ” has the meaning set forth in Section 5.2(b) .

 

Necessary Action ” means, with respect to any party and a specified result, all actions (solely to the extent such actions are permitted by Law and within such party’s control) necessary to cause such result, including (i) voting or providing a written consent or proxy with respect to the Common Stock, (ii) causing the adoption of stockholders’ resolutions and

 

3



 

amendments to the organizational documents of the Company, (iii) executing agreements and instruments and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.

 

Other Investor ” has the meaning set forth in Section 5.1(b) .

 

Ownership Year ” has the meaning set forth in Section 5.2(b) .

 

Person ” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, limited liability company or any other entity of whatever nature, and shall include any successor (by merger or otherwise) of such entity.

 

Proprietary Information ” has the meaning set forth in Section 6.7 .

 

Public Offering ” means any public offering and sale of equity securities of the Company or any successor to the Company for cash pursuant to an effective registration statement (other than on Form S-4, S-8 or a comparable form) under the Securities Act.

 

Registration Rights Agreement ” has the meaning set forth in Article IV .

 

Reimbursable Expenses ” has the meaning set forth in Section 6.3 .

 

Representatives ” has the meaning set forth in Section 6.7(i) .

 

Requisite FCC Approval ” means any action by the FCC, including any action by any of its bureaus or offices pursuant to delegated authority, approving the proposed transfer of control of the FCC authorizations held by the Company and its Subsidiaries to allow either Investor or both Investors to relinquish the negative control of the Company each holds as of the date hereof.

 

Rule 144 ” means Rule 144 under the Securities Act (or any successor rule or regulation).

 

Rule 144 Transfer ” has the meaning set forth in Section 5.1(b) .

 

Rule 144 Transferring Investor ” has the meaning set forth in Section 5.1(b) .

 

SEC ” means the U.S. Securities and Exchange Commission.

 

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder, as the same may be amended from time to time.

 

Share Equivalents ” means, for a Person or Persons, (a) Common Stock beneficially owned as of such determination date by such Person or Persons, and (b) the number of shares of Common Stock issuable upon exercise, conversion or exchange of any security that is currently exercisable for, convertible into or exchangeable for, on any such date of determination, Common Stock.

 

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Stockholder ” means each member of the Avista Investor Group and Crestview Investor Group who owns shares of Common Stock and each Management Stockholder who owns shares of Common Stock.

 

Subsidiary ” means, with respect to any Person, any corporation, partnership, trust, limited liability company or other non-corporate business enterprise in which such Person (or another Subsidiary of such Person) holds stock or other ownership interests representing (a) more than fifty percent (50%) of the voting power of all outstanding stock or ownership interests of such entity, (b) the right to receive more than fifty percent (50%) of the net assets of such entity available for distribution to the holders of outstanding stock or ownership interests upon a liquidation or dissolution of such entity or (c) a general or managing partnership interest in such entity.

 

Transfer ” means, with respect to any Common Stock or Share Equivalents, a direct or indirect transfer (including through one or more transfers), sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of such Common Stock or Share Equivalents, including the grant of an option or other right, whether directly or indirectly, whether voluntarily, involuntarily or by operation of Law; provided, that a Transfer shall not include any direct or indirect transfer (including through one or more transfers), sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of Common Stock or Share Equivalents as a result of any direct or indirect transfer (including through one or more transfers), sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of an interest in an Investor, including the grant of an option or other right, whether voluntarily, involuntarily or by operation of Law.  “ Transferred ,” “ Transferring ” and “ Transferee ” shall each have a correlative meaning to the term “ Transfer .”

 

Unwinding Event ” has the meaning set forth in Section 5.3(b) .

 

Section 1.2                                     General Interpretive Principles . The name assigned to this Agreement and the section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof. Unless otherwise specified, the terms “ hereof ,” “ herein ” and similar terms refer to this Agreement as a whole, and references herein to Articles or Sections refer to Articles or Sections of this Agreement. For purposes of this Agreement, the words, “ include ,” “ includes ” and “ including ,” when used herein, shall be deemed in each case to be followed by the words “ without limitation .” The terms “ dollars ” and “ $ ” shall mean United States dollars. Except as otherwise set forth herein, Common Stock underlying unexercised options that have been issued by the Company shall not be deemed “ outstanding ” for any purposes in this Agreement. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.

 

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ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

 

Section 2.1                                     Representations and Warranties of the Stockholders . Each Stockholder, severally and not jointly, hereby represents and warrants to the Company and each other Stockholder that on the date hereof:

 

(a)                                  This Agreement has been duly authorized, executed and delivered by such Stockholder and, assuming the due execution and delivery of this Agreement by the other parties hereto, this Agreement constitutes the valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar Laws affecting creditors’ rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at Law).

 

(b)                                  The execution, delivery and performance by such Stockholder of this Agreement and the consummation by such Stockholder of the transactions contemplated hereby do not and will not, with or without the giving of notice or the passage of time or both: (i) violate the provisions of any Law, rule or regulation applicable to such Stockholder or his or her properties or assets; (ii) violate any judgment, decree, order or award of any court, governmental or quasi-governmental agency or arbitrator applicable to such Stockholder or his or her properties or assets; or (iii) conflict with, or result in a breach or default under, any term or condition of or constitute a default under, any organizational documents, contract, agreement or instrument to which such Stockholder is a party or by which such Stockholder or his or her properties or assets are bound.

 

(c)                                   Such Stockholder understands that the Common Stock may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the shares of Common Stock or an available exemption from registration under the Securities Act, Common Stock must be held indefinitely.

 

Section 2.2                                     Entitlement of the Company and the Stockholders to Rely on Representations and Warranties . The representations and warranties contained in Section 2.1 may be relied upon by the Company and by the other Stockholders in connection with the entering into of this Agreement.

 

Section 2.3                                     Representations and Warranties of the Company . The Company hereby represents and warrants to the Stockholders that as of the date of this Agreement:

 

(a)                                  It is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, it has full power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance by it of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action.

 

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(b)                                  This Agreement has been duly and validly executed and delivered by the Company and constitutes a legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar Laws affecting creditors’ rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at Law).

 

(c)                                   The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby do not and will not, with or without the giving of notice or lapse of time, or both, (i) violate the provisions of Law, rule or regulation applicable to the Company or its properties or assets, (ii) violate any judgment, decree, order or award of any court, governmental or quasi-governmental agency or arbitrator applicable to the Company or its properties or assets or (iii) conflict with, or result in a breach or default under, any term or condition of the Company’s organizational documents, contract, agreement or instrument to which the Company is a party or by which it or its properties or assets are bound.

 

ARTICLE III

 

MANAGEMENT

 

Section 3.1                                     Composition of the Board of Directors .

 

(a)                                  Concurrently with the effectiveness of this Agreement, the Avista Investor Group and the Crestview Investor Group shall each have the right to designate the number of directors specified in the table below to the Board based on their respective Investor Ownership Percentage (any individual designated by the Avista Investor Group or the Crestview Investor Group, as applicable, an “ Investor Director Designee ”). The Company and each Stockholder shall take all Necessary Action to cause the Investor Director Designees to be elected and/or appointed to the Board.

 

Investor Ownership
Percentage

 

Number of Avista
Investor Group
Director Designees

 

Number of Crestview
Investor Group
Director Designees

 

22.5% or more

 

3

 

3

 

15-22.5%

 

2

 

2

 

5-15%

 

1

 

1

 

 

(b)                                  As of the date hereof, the directors designated for appointment to the Board (i) by the Avista Investor Group shall be Phil Seskin, designated as a Class I Director, Joshua Tamaroff, designated as a Class II Director, and David Burgstahler, designated as a Class III Director and (ii) by the Crestview Investor Group shall be Jeffrey Marcus, designated as a Class I Director, Daniel Kilpatrick, designated as a Class II Director, and Brian Cassidy, designated as a Class III Director. In addition, the Company’s Chief Executive Officer, Steven Cochran, will initially serve as a Class I Director.

 

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(c)                                   It is the intent of the Investors to cause the Board to be comprised of eight directors, until such time as the Requisite FCC Approval is obtained, and thereafter to expand the Board to nine directors at the discretion of the Board.  In the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal of any director who was an Investor Director Designee, the Company agrees to take at any time and from time to time all actions necessary to cause the vacancy created thereby to be filled as promptly as practicable by a new Investor Director Designee designated by the same Investor that designated the Investor Director Designee to the Board seat that has become vacant; provided that, for the avoidance of doubt, an Investor shall not have the right to designate a replacement director, and the Board of Directors and the Stockholders shall not be required to take any action to cause any vacancy to be filled with any such Investor Director Designee, to the extent that election or appointment of such Investor Director Designee to the Board of Directors would result in a number of directors designated by the Investor in excess of the number of directors that the Investor is then entitled to designate for membership on the Board of Directors pursuant to Section 3.1(a) .

 

(d)                                  No Stockholder shall take any action with respect to the Company that would be inconsistent with the provisions of this Agreement.

 

(e)                                   The Company and its Subsidiaries shall reimburse the Investor Director Designees for all reasonable out-of-pocket costs or expenses incurred in connection with their attendance at meetings of the Board or the board of directors of any of the Company’s Subsidiaries, and any committees thereof, including, without limitation, travel, lodging and meal expenses.

 

(f)                                    The Company and its Subsidiaries shall obtain customary director and officer indemnity insurance on commercially reasonable terms which insurance shall cover each member of the Board and the members of each board of directors of each of the Company’s Subsidiaries. The Company and its Subsidiaries shall enter into director and officer indemnification agreements, in form and substance reasonably satisfactory to each of the Investors, with each of the Investor Director Designees.  The provisions of this Section 3.1(f)  shall survive any termination of this Agreement.

 

ARTICLE IV

 

REGISTRATION RIGHTS

 

The Company shall grant to each of the Investors the registration rights set forth in the Registration Rights Agreement in Exhibit B hereto (the “ Registration Rights Agreement ”).

 

ARTICLE V

 

TRANSFER RESTRICTIONS

 

Section 5.1                                     Coordination Committee; Transfer Restrictions .

 

(a)                                  The Company shall create a coordination committee (the “ Coordination Committee ”), which shall not be a committee of the Board, and will maintain such committee for so long as each of the Investors has an Investor Ownership Percentage of more than 5% or until

 

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disbanded with the written consent of each Investor. The Coordination Committee shall facilitate coordination of dispositions of the Common Stock held by the Investors pursuant to Rule 144, as provided in Section 5.1(b) . The Investors each shall be permitted to designate an equal number of representatives (who may, but need not, be a director of the Company) to participate on the Coordination Committee, and shall be permitted to remove and replace such designee from time to time. The procedures governing the conduct of the Coordination Committee shall be established from time to time by the written consent of each Investor. The Coordination Committee shall meet as needed. The Coordination Committee shall notify the Company of any disposition or distribution of the Common Stock which is effected and of which such committee has been notified. If requested by the Company (and at the expense of the Company) any such disposition or distribution shall be supported by an opinion of reputable counsel acceptable to the parties retained by the Investors as to applicability of the Securities Act and any applicable exemptions thereunder.

 

(b)                                  Notwithstanding anything to the contrary herein, for so long as each of the Investors has an Investor Ownership Percentage of more than 5%, an Investor wishing to effectuate a Transfer of some or all of its Common Stock pursuant to a Transfer under Rule 144 (such Transfer, a “ Rule 144 Transfer ”; and such Investor, a “ Rule 144 Transferring Investor ”) shall consult with the other Investor (the “ Other Investor ”) at least two Business Days prior to effectuating any such Rule 144 Transfer, and shall provide the Other Investor with the opportunity to participate in the contemplated Rule 144 Transfer by selling its Common Stock up to an amount equal to (x) the number of shares of Common Stock proposed to be Transferred by the Rule 144 Transferring Investor in such Rule 144 Transfer multiplied by (y) such Other Investor’s percentage ownership of the aggregate number of shares of Common Stock held by both Investors as of the date hereof; it being understood that if such product is fractional, it shall be rounded down to the nearest whole number.

 

(c)                                   The restrictions in this Section 5.1 may not be avoided by the holding of shares of Common Stock directly or indirectly through a Person that can itself be sold to dispose of an interest in Common Stock free of such restrictions.

 

Section 5.2                                     Restrictions on Transfer by Management Stockholders . Notwithstanding anything in this Agreement to the contrary:

 

(a)                                  For the first 180 days following the IPO, no Management Stockholder shall Transfer any Common Stock.

 

(b)                                  No Management Stockholder shall Transfer any Common Stock (other than to Management Permitted Transferees pursuant to Section 5.3 ) to the extent that such Transfer would result in the Management Ownership Percentage of such Management Stockholder immediately following the effective time of such Transfer (the “ Determination Time ”) being less than the Minimum Ownership Percentage during the relevant period. For purposes of this Section 5.2(b) , “ Management Ownership Percentage ” means a fraction (expressed as a percentage), (A) the numerator of which is the number of shares of Common Stock owned by such Management Stockholder immediately following the Determination Time and (B) the denominator of which is the number of Initial Shares that are or have become vested as of immediately following the Determination Time.  For the purposes of this Section 5.2(b) ,

 

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Minimum Ownership Percentage ” means the Management Ownership Percentage that must be held by each Management Stockholder during each year beginning 181 days after the consummation of the IPO (“ Ownership Year ”), as set forth below:

 

Ownership Year

 

Minimum Ownership Percentage

 

1

 

75%

 

2

 

50%

 

3

 

25%

 

4

 

0%

 

 

(c)                                   In connection with each underwritten Public Offering (as defined in the Registration Rights Agreement) and if requested by the managing underwriter, each of the Management Stockholders agree not to effect any public sale or private offer or distribution of any shares of Common Stock during the 10 days prior to the consummation of such Public Offering and during such time period after the consummation of such Public Offering, not to exceed 90 days (180 days in the case of the IPO) as may be requested by the managing underwriter.  Any discretionary waiver or reduction of the requirements under the foregoing provisions made by the Company or the applicable lead managing underwriters shall apply to each Management Stockholder on a pro rata basis. The Company may impose stop-transfer instructions with respect to the Common Stock (or other securities) subject to the foregoing restriction until the end of such period.

 

(d)                                  Any attempt by a Management Stockholder to Transfer any Common Stock and Share Equivalents not in compliance with this Section 5.2 shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in the Company’s stock records to such attempted Transfer. The parties hereto acknowledge that the transfer restrictions contained herein are reasonable and in the best interests of the Company.

 

(e)                                   No Management Stockholder shall transfer any Initial Shares other than pursuant to a prearranged trading plan in accordance with Rule 10b5-1 under the Exchange Act approved by the Company.

 

Section 5.3                                     Management Permitted Transferees .

 

(a)                                  Any Management Stockholder may at any time Transfer any or all of its Common Stock to a Management Permitted Transferee without the consent of any Person and without compliance with Section 5.2(b)  and Section 5.2(e) , so long as such Management Permitted Transferee shall have agreed in writing to be bound by the terms of this Agreement by executing a Joinder Agreement. Such Management Stockholder must give prior written notice to the Company of any proposed Transfer to a Management Permitted Transferee, including the identity of such proposed Management Permitted Transferee and such other documentation reasonably requested by the Company, to ensure compliance with the terms of this Agreement.

 

(b)                                  If, while a Management Permitted Transferee holds any shares of Common Stock, a Management Permitted Transferee ceases to qualify as a Management

 

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Permitted Transferee in relation to the initial transferring Management Stockholder from whom or which such Management Permitted Transferee or any previous Management Permitted Transferee of such initial transferring Management Stockholder received such Common Stock (an “ Unwinding Event ”), then:

 

(i)                                      the relevant initial transferor Management Stockholder shall forthwith notify the other Stockholders and the Company of the pending occurrence of such Unwinding Event; and

 

(ii)                                   immediately following such Unwinding Event, without limiting any other rights or remedies, such initial transferor Management Stockholder shall take all actions necessary to effect a Transfer of all the Common Stock held by the relevant Management Permitted Transferee either back to such Management Stockholder or, pursuant to this Section 5.3 , to another Person that qualifies as a Management Permitted Transferee of such initial transferring Management Stockholder.

 

ARTICLE VI

 

ADDITIONAL AGREEMENTS OF THE PARTIES

 

Section 6.1                                     Obligation to Update Investors . The Company shall keep the Investor Director Designees informed, on a current basis, of any events, discussions, notices or changes with respect to any tax (other than ordinary course communications which could not reasonably be expected to be material to the Company), criminal or regulatory investigation or action involving the Company or any of its Subsidiaries, and shall reasonably cooperate with the Investors, their members and their respective Affiliates in an effort to avoid or mitigate any cost or regulatory consequences to the Investors or their Affiliates that might arise from such investigation or action (including by reviewing written submissions in advance, attending meetings with authorities and coordinating and providing assistance in meeting with regulators).

 

Section 6.2                                     Logo of the Company and its Subsidiaries . The Company grants the Investors permission to use the Company’s and its Subsidiaries’ names and logos in the Investors’ or their respective Affiliates’ marketing materials solely to reflect that the Company is, or was, at one time a portfolio company of the Investor. The Investors or their respective Affiliates, as applicable, shall include a trademark attribution notice giving notice of the Company’s or its Subsidiaries’ ownership of its trademarks in the marketing materials in which the Company’s or its Subsidiaries’ names and logos appear.

 

Section 6.3                                     Expenses . The Company will pay (or cause to be paid) to an Investor (or an Affiliate thereof) on demand all Reimbursable Expenses whether incurred prior to or following the date of this Agreement. As used herein, “ Reimbursable Expenses ” means, all reasonable out-of-pocket costs and expenses (including the reasonable fees and expenses of, and any amounts paid in respect of indemnities in favor of, any attorneys, accountants, consultants and other third parties) incurred by such Investor or an Affiliate thereof (i) on behalf of the Company (with the Company’s consent), (ii) in connection with any services provided by such Investor or its Affiliates to the Company or any of its Affiliates from time to time or (iii) in connection with such Investor’s enforcement of rights or taking of actions under this Agreement,

 

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the constitutive documents of the Company or any of its Subsidiaries, or any transaction or agreement to which the Company or any of its Subsidiaries is a party.

 

Section 6.4                                     Management Stockholders Non-Compete .

 

(a)                                  Except as provided below, each Management Stockholder agrees that for so long as he or she is employed by the Company or any of its Subsidiaries, and for one year thereafter (the “ Non-Competition Period ”), such Management Stockholder shall not, without the express written consent of the Company, directly or indirectly, engage in any activity which is in competition with the Company, or participate or invest in or assist (whether as owner, part-owner, stockholder, partner, director, officer, trustee, employee, agent, independent contractor or consultant, or in any other capacity) any competitor of the Company.

 

(b)                                  Each Management Stockholder agrees that for so long as he or she is employed by the Company or any of its Subsidiaries, and for the Non-Competition Period, such Management Stockholder shall not, directly or indirectly, (i) solicit for employment or employ any person who is employed by the Company, (ii) encourage any officer, employee, client, customer or supplier to terminate or alter his, her, or its relationship or employment with the Company or any of its Subsidiaries, or (iii) solicit for or on behalf of any competitor of the Company any client, customer or supplier of the Company or any of its Subsidiaries, or divert to any Person any client or business opportunity of the Company or any of its Subsidiaries.

 

(c)                                   In furtherance and not in limitation of the foregoing restrictions, during each Management Stockholder’s employment with the Company or any of its Subsidiaries and the Non-Competition Period, subject to each Management Stockholder’s duties of employment, each Management Stockholder shall not devote any time to consulting, lecturing or engaging in other self-employment or employment activities without the prior written consent of the Company.

 

(d)                                  If any court of competent jurisdiction in a final, non-appealable judgment determines that a specified time period, a geographical area, a specified business limitation or any other relevant feature of this Section 6.4 is unreasonable, arbitrary or against public policy, then a lesser time period, geographical area, business limitation or other relevant feature which is determined by such court to be reasonable, not arbitrary and not against public policy may be enforced against the applicable party.

 

(e)                                   Each Management Stockholder, while he or she is employed by the Company and its Subsidiaries, agrees to offer or otherwise make known or available to the Company or any Subsidiary, as directed by the Company and without additional compensation or consideration, any business prospects, contracts or other business opportunities that he or she may discover, find, develop or otherwise have available to him or her in any field in which the Company or any of its Subsidiaries is engaged, and further agrees that any such prospects, contracts or other business opportunities shall be the property of the Company.

 

Section 6.5                                     Indemnity and Liability .

 

(a)                                  The Company hereby indemnifies and agrees to exonerate and hold each of the Investors and each of its respective shareholders, members, affiliates, directors, officers,

 

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fiduciaries, managers, controlling persons, employees, representatives and agents, and each of the partners, shareholders, members, affiliates, directors, officers, fiduciaries, managers, controlling persons, employees, representatives and agents of each of the foregoing (collectively, the “ Indemnitees ”), each of whom is an intended third-party beneficiary of this Agreement and may specifically enforce the Company’s obligations hereunder, free and harmless from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages and costs and expenses or any other amounts in connection therewith, including without limitation all actual out-of-pocket attorneys’ fees and expenses (collectively, the “ Indemnified Liabilities ”), incurred by the Indemnitees or any of them as a result of, arising out of, or in any way relating to (i) services provided by any Investor or its Indemnitees to the Company or to any of the Company’s Subsidiaries (collectively, the “ Company Group ”), (ii) this Agreement, except for any breach of this Agreement by such Investor or such Investor’s respective Indemnitee, or (iii) any claim, cause of action or suit against the Investor or any Indemnitee solely by reason of the Investor’s status as a stockholder of the Company and which arises out of or relates to actions, liabilities or losses of the Company or its Subsidiaries, but not including any Indemnified Liabilities arising from or primarily related to such Indemnitee’s willful misconduct, fraud or gross negligence, or filings with the SEC describing its ownership in the Company, or in connection with any Public Offering (as defined in the Registration Rights Agreement) where information provided by an Investor is the cause of any claim relating to that Public Offering. If, and to the extent that, the foregoing undertaking may be unavailable or unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable Law. For purposes of this Section 6.5 , none of the circumstances described in the limitations contained in the first sentence of this Section 6.5(a)  shall be deemed to apply absent a final non-appealable judgment of a court of competent jurisdiction to such effect, in which case to the extent any such limitation is so determined to apply to any Indemnitee as to any previously advanced indemnity payments made by the Company, then such payments shall be repaid by such Indemnitee to the Company.

 

(b)                                  Any Indemnitee may, at its own expense, retain separate counsel to participate in such defense, and in any action, claim, suit, investigation or proceeding in which the Company, on the one hand, and an Indemnitee, on the other hand, is, or is reasonably likely to become, a party. An Indemnitee shall have the right to employ separate counsel at the expense of the Company and to control its own defense of such action, claim, suit, investigation or proceeding if, in the reasonable opinion of counsel to such Indemnitee, a conflict or potential conflict exists between the Company, on the one hand, and such Indemnitee, on the other hand, that would make such separate representation advisable. The Company agrees that it will not, without the prior written consent of the applicable Indemnitee, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, suit, investigation, action or proceeding relating to the matters contemplated hereby (if any Indemnitee is a party thereto or has been threatened to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of the applicable Indemnitee and each other Indemnitee from all liability arising or that may arise out of such claim, suit, investigation, action or proceeding.

 

(c)                                   The rights of any Indemnitee to indemnification hereunder will be in addition to any other rights any such Person may have under any other agreement or instrument to which such Indemnitee is or becomes a party or is or otherwise becomes a beneficiary or

 

13



 

under Law or regulation. The Company hereby agrees that it is the indemnitor of first resort (i.e., its obligations to any Indemnitee under this Agreement are primary and any obligation of any Investor (or any Affiliate thereof other than the Company) to provide advancement or indemnification for the same Indemnified Liabilities (including all interest, assessment and other charges paid or payable in connection with or in respect of such Indemnified Liabilities) incurred by Indemnitee are secondary), and if any Investor (or any Affiliate thereof other than the Company) pays or causes to be paid, for any reason, any amounts otherwise indemnifiable hereunder or under any other indemnification agreement (whether pursuant to contract, bylaws or charter) with any Indemnitee, then (i) such Investor shall be fully subrogated to all rights of Indemnitee with respect to such payment, and (ii) the Company shall reimburse such Investor (or such other Affiliate) for the payments actually made. The Company hereby unconditionally and irrevocably waives, relinquishes and releases (and covenants and agrees not to exercise, and to cause each of its Affiliates not to exercise), any claims or rights that the Company may now have or hereafter acquire against any Indemnitee (in any capacity) that arise from or relate to the existence, payment, performance or enforcement of the Company’s obligations under this Agreement or under any indemnification obligation (whether pursuant to any other contract, any organizational document or otherwise), including any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Indemnitee against any Indemnitee, whether such claim, remedy or right arises in equity or under contract, statute, common law or otherwise, including any right to claim, take or receive from any Indemnitee, directly or indirectly, in cash or other property or by set-off or in any other manner, any payment or security or other credit support on account of such claim, remedy or right. Except as specifically provided otherwise in this Agreement, none of the Indemnitees will be liable to the Company or any of its Affiliates for any act or omission suffered or taken by such Indemnitee that does not constitute willful misconduct, fraud or gross negligence.

 

Section 6.6                                     Access to Information and Personnel .

 

(a)                                  For so long as either (x) an Investor is entitled to designate at least one Investor Director Designee pursuant to Section 3.1(a)  or (y) an Investor has provided a written request, the Company will deliver, or will cause to be delivered, the following to such Investor (unless such Investor has informed the Company that it does not wish to receive any such information):

 

(i)                                      unaudited consolidated quarterly financial reports of the Company and its consolidated subsidiaries prepared in accordance with GAAP for the first three fiscal quarters of each year, which shall be provided no later than the date upon which the Form 10-Q for the Company is due for such fiscal quarter;

 

(ii)                                   audited consolidated annual financial reports of the Company and its consolidated subsidiaries prepared in accordance with GAAP, which shall be provided no later than the date upon which the Form 10-K for the Company is due for such fiscal year;

 

(iii)                                as soon as available after each month and in any event within 15 days after the date on which such information is delivered in final form to the Board, unaudited

 

14



 

consolidated monthly financial reports of the Company and its consolidated subsidiaries prepared in accordance with GAAP;

 

(iv)                               the annual business plan (including operating budget and capital expenditures presented on a monthly basis); and

 

(v)                                  such other information and data as the Investor may reasonably request in connection with its ownership of Common Stock, including, but not limited to any information necessary to assist such Investor in preparing its tax, regulatory or other similar filings or as otherwise required for administrative purposes.

 

(b)                                  The Company shall, and shall cause its Subsidiaries to, provide the Avista Investor Group and the Crestview Investor Group, as applicable, full access to all books, records, policies and procedures, internal audit and compliance reports, and to officers, personnel, accountants and other representatives of the Company and its Subsidiaries and their respective businesses, whether located in the United States or outside the United States, including, without limitation, the right to audit any such books, records, policies and procedures, and reports and to make copies therefrom.

 

Section 6.7                                     Confidentiality . Each Stockholder shall maintain the confidentiality of any confidential and proprietary information of the Company and its Subsidiaries (“ Proprietary Information ”) using the same standard of care, but in no event less than reasonable care, as it applies to its own confidential information, except (i) for any Proprietary Information which is publicly available (other than as a result of dissemination by such Stockholder in violation of this Section 6.7 ) or a matter of public knowledge generally, (ii) if the release of such Proprietary Information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, following delivery of prior written notice to the Company (to the extent permitted under applicable Law), or (iii) for Proprietary Information that was known to such Stockholder prior to its disclosure by the Company, or becomes known by such Stockholder, in each case on a non-confidential basis, without, to such Stockholder’s knowledge, breach of any third-party’s confidentiality obligations. Each Stockholder further acknowledges and agrees that it shall not disclose any Proprietary Information to any Person, except that Proprietary Information may be disclosed:

 

(i)                                      to its and its Affiliates’ directors, officers, employees, stockholders, members, partners, agents, counsel, investment advisers or other representatives (all such persons being collectively referred to as “ Representatives ”) in the normal course of the performance of their duties to the Investor or its Affiliates; provided such recipient agrees to be bound by a confidentiality agreement consistent with the provisions hereunder or is otherwise bound under Law or contract to a duty of confidentiality to the Investor or its Affiliate;

 

(ii)                                   to any regulatory authority to which the Stockholder or any of its Affiliates is subject or with which it has regular dealings in connection with a general regulatory inquiry not specifically targeted at the Company; provided that to the extent legally permissible and practicable, the Stockholder gives prior notice of such disclosure

 

15



 

to the Company, and provided further, that such authority is advised of the confidential nature of such information;

 

(iii)                                to the extent related to the tax treatment and tax structure of the transactions contemplated by this Agreement (including all materials of any kind, such as opinions or other tax analyses that the Company, its Affiliates or any of its Representatives have provided to such Stockholder relating to such tax treatment and tax structure); provided that the foregoing does not constitute an authorization to disclose the identity of any existing or future party to the transactions contemplated by this Agreement or their Affiliates or Representatives, or, except to the extent relating to such tax structure or tax treatment, any specific pricing terms or commercial or financial information; or

 

(iv)                               if the prior written consent of the Board shall have been obtained.

 

Nothing contained herein shall prevent the use (subject, to the extent possible, to a protective order) of Proprietary Information in connection with the assertion or defense of any claim by or against the Company or any Stockholder.

 

Section 6.8                                     Matters Requiring Stockholder Consent . The Company shall not (and shall not permit any of its Subsidiaries to) take any of the actions listed below without the consent of each Investor until the later of (x) such time as the Requisite FCC Approval is obtained and (y) the earlier of (1) June 30, 2018 or (2) such time as such Investor no longer has an Investor Ownership Percentage of at least 22.5% at such time (in which case such Investor's consent shall not be required for any of the actions listed below):

 

(i)                                      enter into or effect any transaction or series of related transactions, involving the purchase, rent, license, exchange or other acquisition by the Company or any of its Subsidiaries of any assets (including any securities of any other Person) for consideration having a fair market value (as reasonably determined by the Board) in excess of $250,000,000 other than transactions in the ordinary course of business exclusively between and among any of the Company’s direct or indirect wholly-owned Subsidiaries;

 

(ii)                                   enter into or effect any transaction or series of related transactions, involving the sale of at least a majority of the issued and outstanding Common Stock of the Company or the sale by the company of all or substantially all of its assets;

 

(iii)                                hire or remove, with or without cause, the Chief Executive Officer of the Company or any of its Subsidiaries, from time to time.

 

Section 6.9                                     Certain Other Matters . Neither the Company nor any of its Subsidiaries shall enter into any contract, agreement, arrangement or understanding containing any provision or covenant that purports to, or could reasonably be expected to, limit in any respect the ability of any Investor or any of their respective Affiliates or portfolio companies to (i) sell any products or services of or to any other Person or in any geographic region, (ii) engage in any line of business, (iii) compete with or obtain products or services from any Person or (iv) provide products or services to the Company or any of its Subsidiaries.

 

16



 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.1                                     No Exclusive Duty to the Company .

 

In recognition that the Investors currently have, and will in the future have or will consider acquiring, investments in numerous companies with respect to which such Investor (or one or more Affiliates, associated investment funds, portfolio companies or employees) may serve as an advisor, a director or in some other capacity, and in recognition that such Investor (or one or more Affiliates, associated investment funds, portfolio companies or employees) may have a myriad of duties to various investors and partners, and in anticipation that the Company, on the one hand, and such Investor (or one or more Affiliates, associated investment funds, portfolio companies or employees), on the other hand, may engage in the same or similar activities or lines of business and have an interest in the same areas of corporate opportunities, and in recognition of the benefits to be derived by the Company hereunder and in recognition of the difficulties which may confront any Investor who desires and endeavors fully to satisfy such Investor’s duties, in determining the full scope of such duties in any particular situation, the provisions of this Section 7.1 are set forth to regulate, define and guide the conduct of certain affairs of the Company as they may involve such Investor.

 

(a)                                  Such Investor shall have the right:

 

i.                   to directly or indirectly engage in or invest in any business (including any business activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Company or any of its Subsidiaries);

 

ii.                to directly or indirectly do business with any client or customer of the Company or any of its Subsidiaries;

 

iii.             to take any other action that such Investor believes in good faith is necessary to or appropriate to fulfill its obligations as described in the first sentence of this Section 7.1 ; and

 

iv.            not to present potential transactions, matters or business opportunities to the Company or any of its Subsidiaries, and to pursue, directly or indirectly, any such opportunity for itself, and to direct any such opportunity to another person.

 

(b)                                  Such Investor (or one or more Affiliates, associated investment funds, portfolio companies or employees) shall have no duty (contractual or otherwise) to communicate or present any corporate opportunities to the Company or any of its Subsidiaries or to refrain from any actions specified in Section 7.1(a) , and the Company, on its own behalf and on behalf of its Subsidiaries, hereby renounces and waives any right to require such Investor (or one or more Affiliates, associated investment funds, portfolio companies or employees) to act in a manner inconsistent with the provisions of Section 7.1(a) .

 

17



 

(c)                                   Such Investor and its Affiliates, associated investment funds, portfolio companies and employees shall not be liable to the Company or any of its Subsidiaries for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the types referred to in this Section 7.01 or such Investor’s or its Affiliates’, associated investment funds’, portfolio companies’ or employees’ participation therein.

 

Section 7.2                                     Entire Agreement . This Agreement constitutes the entire understanding and agreement between the parties as to the matters covered herein and supersedes and replaces any prior understandings or agreements between the parties as to the matters covered herein and supersedes and replaces any prior understandings or agreements, in each case, written or oral, of any and every nature with respect thereto. In the event of any inconsistency between this Agreement and any document executed or delivered to effect the purposes of this Agreement, including, without limitation, the by-laws of any company, this Agreement shall govern as among the parties hereto.

 

Section 7.3                                     Governing Law; Submission to Jurisdiction; Waiver of Jury Trial .

 

(a)                                  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.

 

(b)                                  EACH OF THE PARTIES SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN WILMINGTON, DELAWARE IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, AGREES THAT ALL CLAIMS IN RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND AGREES NOT TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO IN ANY OTHER COURT. EACH OF THE PARTIES WAIVES ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT THERETO. EACH PARTY AGREES THAT SERVICE OF SUMMONS AND COMPLAINT OR ANY OTHER PROCESS THAT MIGHT BE SERVED IN ANY ACTION OR PROCEEDING MAY BE MADE ON SUCH PARTY BY SENDING OR DELIVERING A COPY OF THE PROCESS TO THE PARTY TO BE SERVED AT THE ADDRESS OF THE PARTY AND IN THE MANNER PROVIDED FOR THE GIVING OF NOTICES IN SECTION 7.9 . NOTHING IN THIS SECTION 7.3(B) , HOWEVER, SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PROVIDED BY LAW. EACH PARTY HERETO AGREES THAT A FINAL, NON- APPEALABLE JUDGMENT IN ANY ACTION OR PROCEEDING SO BROUGHT SHALL BE CONCLUSIVE AND MAY BE ENFORCED BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

18



 

(c)                                   EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PARTY TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

Section 7.4                                     Obligations; Remedies . The Company and the Stockholders shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement (including, without limitation, costs of enforcement) and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement, and that the Company or any Stockholder may in its sole discretion apply to any court of Law or equity of competent jurisdiction for specific performance or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement. All remedies, either under this Agreement or by Law or otherwise afforded to any party, shall be cumulative and not alternative. All obligations hereunder shall be satisfied in full without set-off, defense or counterclaim.

 

Section 7.5                                     Amendment and Waiver .

 

(a)                                  The terms and provisions of this Agreement may be modified or amended at any time and from time to time only by the written consent of (i) the Company, (ii) the Person or Persons holding a majority of the shares of Common Stock that are then deemed to be held by the Avista Investor Group and (iii) the Person or Persons holding a majority of the Shares that are then deemed to be held by the Crestview Investor Group; provided , however , that any waiver, amendment or modification that adversely affects Management Stockholders disproportionately as compared to the Investors (taking into account and considering the rights of Management Stockholders prior to such amendment or modification), shall require the prior written consent of the holders of a majority of the shares of Common Stock then held by the Management Stockholders. If requested by the Investors, the Company agrees to execute and deliver any amendments to this Agreement which are not adverse to the Company or its public stockholders to the extent so requested by the Investors in connection with the addition of (i) a transferee of Common Stock or Share Equivalents or (ii) a recipient of any newly-issued Common Stock or Share Equivalents as a party hereto; provided that such amendments are in compliance with the immediately foregoing sentence and the terms of this Agreement. Any amendment, modification or waiver effected in accordance with the foregoing shall be effective and binding on the Company, each Investor and each of the Management Stockholders.

 

19



 

(b)                                  Any failure by any party at any time to enforce any of the provisions of this Agreement, or single or partial enforcement of any rights, powers or remedies conferred by this Agreement, shall not be construed as a waiver of such provision or any other provisions hereof, or preclude any other or further exercise thereof.

 

Section 7.6                                     Binding Effect; Assignment . The rights and obligations under this Agreement shall not be assignable without the prior written consent of (i) the Company, (ii) the Person or Persons holding a majority of the Shares that are then deemed to be held by the Avista Investor Group and (iii) the Person or Persons holding a majority of the shares of Common Stock that are then deemed to be held by the Crestview Investor Group, and any attempted assignment of rights or obligations in violation of this Section 7.6 shall be null and void.

 

Section 7.7                                     Termination . This Agreement shall terminate automatically (without any action by any party hereto) as to each Investor when such Investor ceases have an Investor Ownership Percentage of at least 5% and shall terminate automatically (without any action by any party hereto) as to all parties when each Investor ceases to have an Investor Ownership Percentage of at least 5%. In the event of any termination of this Agreement as provided in this Section 7.7 , this Agreement shall forthwith become wholly void and of no further force or effect (except for Section 3.1(f) , Section 6.5 and this Article VII ) and there shall be no liability on the part of any parties hereto or their respective officers or directors, except as provided in this Article VII . Notwithstanding the foregoing, no party hereto shall be relieved from liability for any willful breach of this Agreement.

 

Section 7.8                                     Non-Recourse . Notwithstanding anything that may be expressed or implied in this Agreement or any document or instrument delivered in connection herewith, and notwithstanding the fact that certain of the Investors may be partnerships or limited liability companies, by its acceptance of the benefits of this Agreement, the Company and each Stockholder covenant, agree and acknowledge that no Person (other than the parties hereto) has any obligations hereunder, and that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, general or limited partner or member of any Investor or of any Affiliate or assignee thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current and future Investor, controlling persons, directors, officers, employees, agents, affiliates, members, managers, general or limited partners or assignees of the Investors or any former, current or future Investor, controlling person, director, officer, employee, general or limited partner, member, manager, Affiliate, agent or assignee of any of the foregoing, as such for any obligation of any Investor under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

 

Section 7.9                                     Notices . Any and all notices, designations, offers, acceptances or other communications provided for herein shall be given (a) when delivered personally by hand, (b) when sent by email or facsimile, (c) when received or rejected by the addressee if sent by registered or certified mail, postage prepaid, return receipt requested, or (d) when received or rejected if sent by overnight courier:

 

20


 

if to the Company, to:

 

WideOpenWest, Inc.

7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

Attn: Craig Martin, General Counsel

Facsimile: (269) 567-4193

 

with a copy (which shall not constitute notice) to:

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attention: Joshua N. Korff, P.C. and Brian Hecht

Facsimile: (212) 446-4900

 

if to the Avista Investor Group, to:

 

Avista Capital Partners

65 East 55th Street, 18th Floor

New York, New York 10022

Attention: David Burgstahler, Joshua Tamaroff and Ben Silbert

Facsimile: (212) 593-6901

 

with a copy (which shall not constitute notice) to:

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attention: Joshua N. Korff, P.C. and Brian Hecht

Facsimile: (212) 446-4900

 

if to the Crestview Investor Group, to:

 

c/o Crestview Partners III, L.P.

667 Madison Avenue, 10th Floor

New York, New York 10065

Attention: Brian Cassidy, Daniel Kilpatrick and Jeff Marcus

Facsimile: (212) 906-0780

 

21



 

with a copy (which shall not constitute written notice) to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention: Kenneth M. Schneider and Neil Goldman

Facsimile:  (212) 757-3990

or to such other address as may be designated by such party in writing to the Company, and to any other Stockholder, to such Stockholder’s address as set forth in the records of the Company.

 

Section 7.10          Severability . If any portion of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, then, so long as no party is deprived of the benefits of this Agreement in any material respect, such portion shall be deemed severable from the remainder of this Agreement, which shall continue in all respects valid and enforceable.

 

Section 7.11          Headings . The headings and subheadings in this Agreement are included for convenience and identification only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereto.

 

Section 7.12          No Third-Party Beneficiaries . This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and successors, and, except as provided in Section 6.5 , Section 7.4 and Section 7.8 , nothing herein, express or implied, is intended to or shall confer upon any other Person or entity, any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 7.13          Recapitalizations; Exchanges, Etc . The provisions of this Agreement shall apply to the full extent set forth herein with respect to Common Stock, to any and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution of the Common Stock, by reason of a stock dividend, stock split, stock issuance, reverse stock split, combination, recapitalization, reclassification, merger, consolidation or otherwise.

 

Section 7.14          Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute a single instrument. Copies of executed counterparts transmitted by telecopy or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 7.14.

 

[The remainder of this page intentionally left blank]

 

22



 

IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as of the date first written above.

 

 

WIDEOPENWEST, INC.

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[ Signature Page to Stockholders’ Agreement ]

 



 

 

AVISTA CAPITAL PARTNERS, L.P.

 

 

 

By:

Avista Capital Partners GP, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

AVISTA CAPITAL PARTNERS (OFFSHORE), L.P.

 

 

 

By:

Avista Capital Partners GP, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

AVISTA CAPITAL PARTNERS III, L.P.

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

General Partner

 

 

 

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[ Signature Page to Stockholders’ Agreement ]

 



 

 

AVISTA CAPITAL PARTNERS (OFFSHORE) III, L.P.

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

General Partner

 

 

 

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

AVISTA CAPITAL PARTNERS (OFFSHORE) III-A, L.P.

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

General Partner

 

 

 

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

ACP RACECAR CO-INVEST, LLC

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

Manager

 

 

 

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[ Signature Page to Stockholders’ Agreement ]

 


 

 

ACP RACECAR CO-INVEST II, LLC

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

Manager

 

 

 

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[ Signature Page to Stockholders’ Agreement ]

 



 

 

CRESTVIEW W1 CO-INVESTORS, LLC

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

CRESTVIEW W1 TE HOLDINGS, LLC

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

CRESTVIEW W1 HOLDINGS, L.P.

 

 

 

 

By:

Crestview W1 GP, LLC

 

Its:

General Partner

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[ Signature Page to Stockholders’ Agreement ]

 



 

 

MANAGEMENT STOCKHOLDERS:

 

[ Signature Page to Stockholders’ Agreement ]

 



 

EXHIBIT A

JOINDER TO THE STOCKHOLDERS’ AGREEMENT

 

[ · ], 20[ · ]

 

This Joinder Agreement (the “ Joinder Agreement ”) is made as of the date written above by the undersigned (the “ Joining Party ”) in accordance with the Stockholders’ Agreement dated as of [ · ], 2017 (as amended and restated or otherwise modified from time to time, the “ Stockholders’ Agreement ”) among WideOpenWest, Inc. and the other persons listed on the signature pages thereto. Capitalized terms used, but not defined, herein shall have the respective meanings of ascribed to such terms in the Stockholders’ Agreement.

 

The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to the Stockholders’ Agreement as of the date hereof and shall have all of the rights and obligations of a[n] [“Investor”] // [“Management Stockholder”] thereunder as if it had executed the Stockholders’ Agreement Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Stockholders’ Agreement Agreement.

 

 

 

 

 

Name:

 

Address:

 

Telephone:

 

Facsimile:

 

AGREED ON THIS [ ] day of [ ], 20  :

 

WIDEOPENWEST, INC.

 

 

By:

 

 

Name:

 

 

Title:

 

 

 



 

Exhibit B

 

Registration Rights Agreement

 




Exhibit 10.21

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (the “ Agreement ”), dated as of [ · ], 2017, by and among WideOpenWest, Inc., a Delaware corporation (together with its successors and assigns, the “ Company ”), the Avista Investor Group (as hereinafter defined), the Crestview Investor Group (as hereinafter defined, and together with the Avista Investor Group, the “ Investors ”) and the other signatories hereto who execute an agreement to bound to this Agreement in the form of Exhibit A hereto and any other Person who becomes a party hereto.

 

WHEREAS, the Holders (as defined below) own Registrable Securities (as defined below); and

 

WHEREAS, the parties desire to set forth certain registration rights applicable to the Registrable Securities.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the parties hereto, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.01                              Definitions . As used in this Agreement, the following terms shall have the following meanings:

 

Affiliate ” means, with respect to any Person, any other Person who, directly or indirectly, controls such first Person or is controlled by said Person or is under common control with said Person, where “control” means the power and ability to direct, directly or indirectly, or share equally in or cause the direction of, the management and/or policies of a Person, whether through ownership of voting shares or other equivalent interests of the controlled Person, by contract (including proxy) or otherwise; provided , that no Holder shall be deemed an Affiliate of any other Holder by reason of an investment in, or holding Shares of, the Company.

 

Agreement ” has the meaning set forth in the Preamble.

 

Avista Holder ” means any holder of Registrable Securities that is a member of the Avista Investor Group.

 

Avista Investor Group ” means, collectively, Avista Capital Partners, L.P., Avista Capital Partners (Offshore), L.P., Avista Capital Partners III, L.P., Avista Capital Partners (Offshore) III, L.P., Avista Capital Partners (Offshore) III-A, L.P., ACP Racecar Co-Invest, LLC and ACP Racecar Co-Invest II, LLC and any of their respective Affiliates who beneficially own Common Stock from time to time.

 

Board ” means the Board of Directors of the Company.

 

1



 

Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in New York City, New York are authorized or required by applicable law to close.

 

Commission ” means the United States Securities and Exchange Commission.

 

Common Stock ” means common stock, par value $0.01 per share, of the Company, and any securities into which such shares of common stock shall have been changed or any securities resulting from any reclassification or recapitalization of such shares of common stock.

 

Company ” has the meaning set forth in the Preamble.

 

Crestview Holder ” means any holder of Registrable Securities that is a member of the Crestview Investor Group.

 

Crestview Investor Group ” means, collectively, Crestview W1 Co Investors, LLC, Crestview W1 TE Holdings, LLC, and Crestview W1 Holdings, L.P. and any of their respective Affiliates who beneficially own Common Stock from time to time.

 

Damages ” has the meaning set forth in Section 3.01(a) .

 

Demand Maximum Offering Size ” has the meaning set forth in Section 2.01(d) .

 

Demand Registration ” has the meaning set forth in Section 2.01(a) .

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time.

 

FINRA ” means the Financial Industry Regulatory Authority, Inc.

 

Governmental Authority ” means any federal, state, local or foreign governmental authority, department, commission, board, bureau, agency, court, instrumentality or judicial or regulatory body or entity.

 

Holder ” means any Avista Holder, any Crestview Holder or any other holder of Registrable Securities who is a party hereto and their Permitted Transferees.

 

Initial Public Offering ” means any initial underwritten sale of Common Stock of the Company, any of its Subsidiaries or any Person that holds, directly or indirectly, all of the Common Stock or Share Equivalents or assets of the Company, pursuant to an effective Registration Statement under the Securities Act filed with the Commission on Form S-1 (or a successor form) after which sale such Common Stock is (a) listed on a national securities exchange or authorized to be quoted on an inter-dealer quotation system of a registered national securities association and (b) registered under the Exchange Act.

 

Indemnified Party ” shall mean (i) each officer and director of the Company and (ii) each Holder and their respective Affiliates, officers, managers, directors, employees, shareholders, partners, members, advisors or sub-advisors.

 

2



 

Indemnifying Party ” has the meaning set forth in Section 3.01(c) .

 

Inspectors ” has the meaning set forth in Section 2.05(g) .

 

Investors ” has the meaning set forth in the Preamble.  For purposes of clarity, there are two Investors: the Avista Investor Group, which shall collectively be deemed an “ Investor ,” and the Crestview Investor Group, which shall collectively be deemed an “ Investor .” Any determination, demand, consent or approval to be made, given or withheld by the Avista Investor Group (or its successor) in its capacity as an Investor under this Agreement shall be made, given or withheld by the Person or Persons holding a majority of the shares of Common Stock that are then deemed to be held by the Avista Investor Group (or its successor) and any determination, demand, consent or approval to be made, given or withheld by the Crestview Investor Group (or its successor) under this Agreement shall be made, given or withheld by the Person or Persons holding a majority of the shares of Common Stock that are then deemed to be held by the Crestview Investor Group (or its successor).

 

IPO Indemnified Parties ” has the meaning set forth in Section 3.01(a) .

 

Participating Holders ” has the meaning set forth in Section 2.01(a) .

 

Permitted Transferee ” means, (i) with respect to any Investor, (x) any Affiliate of such Investor or (y) any passive Person, vehicle, account or fund that is managed, sponsored or advised by, such Investor or any Affiliate thereof, so long as the decision-making control with respect to such interests after such Transfer to such passive Person, vehicle, account or fund remains with such Investor or any Affiliate thereof and (ii) with respect to any Holder who is an individual, (A) in the event of such Holder’s death, such Holder’s heirs, executors, administrators, testamentary trustees, legatees or beneficiaries, (B) a trust, the beneficiaries of which include only such Holder and the spouse and lineal descendants of such Holder and pursuant to which the Holder retains all of the voting interest in the Company, (C) a charitable trust pursuant to which the Holder retains all of the voting interests in the Company, or (D) a closely held company with respect to which the Holder together with the Holder’s immediate family holds 100% of the beneficial interests.

 

Person ” means any individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a Governmental Authority and, where the context so permits, the legal representatives, successors in interest and permitted assigns of such Person.

 

Piggyback Maximum Offering Size ” has the meaning set forth in Section 2.02(b) .

 

Piggyback Registration ” has the meaning set forth in Section 2.02(a) .

 

Public Offering ” means a public offering and sale of Common Stock for cash pursuant to an effective Registration Statement under the Securities Act.

 

Records ” has the meaning set forth in Section 2.05(g) .

 

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Registrable Securities ” shall mean, at any time, any Common Stock or Share Equivalents (other than non-participating, non-convertible preferred stock) of the Company held by any Investor (including any Crestview Holder and any Avista Holder) or any of their respective Permitted Transferees; provided , that Registrable Securities shall not include any shares (i) the sale of which has been registered pursuant to the Securities Act and which shares have been sold pursuant to such registration, (ii) which have been sold or distributed pursuant to Rule 144 or (iii) which have been registered for resale pursuant to an effective Registration Statement on a Form S-8 (or any successor or similar form).

 

Registration Expenses ” means any and all expenses incident to the performance of or compliance with any registration or marketing of securities, including all (i) registration and filing fees, FINRA fees and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (ii) fees and expenses of compliance with any securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the securities registered), (iii) expenses in connection with the preparation, printing, mailing and delivery of any Registration Statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto, (iv) security engraving and printing expenses, (v) internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties), (vi) fees and disbursements of all counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of any comfort letters to be provided pursuant to Section 2.05(h)  hereof), (vii) fees and expenses of any special experts retained by the Company in connection with such registration, (viii) reasonable fees and expenses of all counsel to the Investors, (ix) fees and expenses in connection with any review of the underwriting arrangements or other terms of the offering, and all fees and expenses of any “qualified independent underwriter” or other independent appraiser participating in any offering, including the fees and expenses of any counsel thereto, (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities, (xi) costs of printing and producing any agreements among underwriters, underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering, (xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in connection with the registration, marketing or selling of the Registrable Securities, (xiv) fees and expenses payable in connection with any ratings of the Registrable Securities, including expenses relating to any presentations to rating agencies, and (xv) all other costs and expenses incurred by the Company or its officers in connection with their compliance with Articles II, III and Sections 4.08 and 4.09 .

 

Registration Statement ” shall mean any registration statement of the Company, under the Securities Act which permits the Public Offering of any of the Registrable Securities pursuant to the provisions of this Agreement, including the prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and

 

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all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

 

Requesting Investor ” has the meaning set forth in Section 2.01(a) .

 

Securities Act ” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.

 

Share Equivalents ” means (i) shares of Common Stock, stock or other equity interests (including other classes or series thereof having such relative rights, powers and/or obligations as may from time to time be established by the Board, including rights, powers and/or duties different from, senior to or more favorable than existing classes and series of shares, stock and other equity interests, and including any profits interests), (ii) obligations, evidences of indebtedness or other securities or interests convertible or exchangeable into shares, stock or other equity interests, and (iii) warrants, options or other rights to purchase or otherwise acquire shares, stock or other equity interests. Unless the context otherwise indicates, the term “Share Equivalents” refers to Share Equivalents of the Company.

 

Shelf Registration ” has the meaning set forth in Section 2.03(a) .

 

Shelf Request ” has the meaning set forth in Section 2.03(a) .

 

Stockholders’ Agreement ” means the Stockholders’ Agreement, dated as of the date hereof, among the Company and the Investors, as the same may be amended from time to time in accordance with the terms thereof.

 

Subsidiary ” means, with respect to any specified Person, any other Person in which such specified Person, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least fifty percent (50%) of the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.

 

Transfer ” means, with respect to any Common Stock or Share Equivalents, every absolute or conditional method of transferring a legal or equitable, record or beneficial, direct or indirect ownership (including the granting of an option or other right, or through the transfer of capital stock of any Person that holds, or controls any Person that holds an interest) of a Holder’s interest in the Company, or a part thereof, whether voluntarily, involuntarily, or by operation of law (including a change in beneficiaries or trustees of a trust) and including directly or indirectly (including through one or more transfers) selling, exchanging, assigning, transferring, conveying, giving away, pledging, mortgaging, or otherwise create, incur or assume any encumbrance with respect to, such interest; provided , however , that a Transfer shall not include any direct or indirect transfer (including through one or more transfers), sale, exchange, assignment, conveyance, gift, pledge, mortgage or other disposition of an interest in the Avista Investor Group or the Crestview Investor Group, including the grant of an option or other right, whether voluntarily, involuntarily or by operation of law.

 

Underwritten Shelf Take-Down ” has the meaning set forth in Section 2.03(a) .

 

Withdrawing Holders ” has the meaning set forth in Section 2.04(c) .

 

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Section 1.02                              General Interpretive Principles . The name assigned to this Agreement and the section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof. Unless otherwise specified, the terms “hereof,” “herein” and similar terms refer to this Agreement as a whole, and references herein to Articles or Sections refer to Articles or Sections of this Agreement. For purposes of this Agreement, the words, “include,” “includes” and “including,” when used herein, shall be deemed in each case to be followed by the words “without limitation.” The terms “dollars” and “$” shall mean United States dollars. Except as otherwise set forth herein, Shares underlying unexercised options that have been issued by the Company shall not be deemed “outstanding” for any purposes in this Agreement. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.

 

ARTICLE II

 

REGISTRATION RIGHTS

 

Section 2.01                              Demand Registration .

 

(a)                                  Registration Request . At any time following the Initial Public Offering, each Investor may request (the “ Requesting Investor ”) in writing that the Company effect the registration under the Securities Act of all or any portion of their Registrable Securities, specifying the intended method of disposition thereof (each such request, a “ Demand Registration ”) and the Company shall then provide prompt notice to the other Investor and any other Holders and shall thereupon use its reasonable best efforts to effect, as expeditiously as possible, the registration under the Securities Act of all Registrable Securities for which such Investor has requested registration under this Section 2.01(a) ; provided that the Company shall not be obligated to effect a Demand Registration unless the aggregate gross proceeds expected to be received from the sale of the Registrable Securities requested to be included by such Investor in such Demand Registration are at least $20,000,000.  Subject to the restrictions set forth in Section 2.01(d) , all other Registrable Securities that any other Investor (all such Investors, together with the Requesting Stockholders and any other Person participating in the registration, the “ Participating Holders ”) have requested the Company to register by request received by the Company within 10 days after such Investor receives the Company’s notice of the Demand Registration, all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered; provided that if the Demand Registration involves an underwritten Public Offering, no Person may participate in any Registration Statement pursuant to this Section 2.01(a)  unless such Person agrees to sell their Registrable Securities to the underwriters selected as provided in Section 2.05(f)  on the same terms and conditions as apply to the Requesting Investor and no such Person shall be required to make any representations or warranties, or provide any indemnity, in connection with any such registration other than representations and warranties (or indemnities with respect thereto) as to (i) such Person’s ownership of his, her or its Registrable Securities to be transferred free and clear of all liens, claims, and encumbrances, (ii) such Person’s power and authority to effect such transfer, (iii) such matters pertaining to compliance with securities laws

 

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by such Person as may be reasonably requested and (iv) such information furnished in writing to the Company by such Person or on behalf of such Person expressly for use in the Registration Statement; provided , further , however , that the obligation of such Person to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among such Persons selling Registrable Securities, and the liability of each such Person will be in proportion thereto; and provided , further , that such liability will be limited to the net proceeds received by such Person from the sale of his, her or its Registrable Securities pursuant to such registration.

 

(b)                                  Effective Registration . At any time prior to the effective date of the Registration Statement relating to such Demand Registration, the Requesting Investor may revoke their registration request without liability to such Investor, by providing a notice to the Company revoking such request.

 

(c)                                   Registration Expenses . The Company shall be liable for and pay all Registration Expenses in connection with each Demand Registration, regardless of whether such registration is effected; provided , that the Participating Holders holding Registrable Securities shall each pay their pro rata portion (based on the number of shares each Participating Holder is selling) of all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities.

 

(d)                                  Reduction of Public Offering . The Company shall not include in any Demand Registration any securities which are not Registrable Securities without the prior written consent of the Investors.  If a Demand Registration involves a Public Offering and the managing underwriter advises the Company and the Investors that, in its view, the number of Registrable Securities that the Investors, the Holders (pursuant to Section 2.02 ) and the Company propose to include in such registration exceeds the largest number of Registrable Securities that can be sold without having an adverse effect on such offering, including the price at which such Registrable Securities can be sold (the “ Demand Maximum Offering Size ”), the Company shall only include in such registration Registrable Securities of the Investors and the Holders up to the Demand Maximum Offering Size (with the number of Registrable Securities of the Investors and the Holders included in such registration reduced pro rata based on their relative number of Registrable Securities beneficially owned by the Investors as of the date thereof).

 

(e)                                   Deferral or Suspension of Registration Statement . The Company may defer the filing (but not the preparation) of a Registration Statement, or suspend the continued use of a Registration Statement, required by this Section 2.01 for a period of up to 30 days after the request to file a Registration Statement if at the time the Company receives the request to register Registrable Securities, the Company or any of its Subsidiaries are engaged in confidential negotiations or other confidential business activities, disclosure of which would be required in such Registration Statement (but would not be required if such Registration Statement were not filed), and the Board determines in good faith, after consultation with external legal counsel, that such disclosure would have a material adverse effect on the Company or its business or on the Company’s ability to effect a proposed material acquisition, disposition, financing, reorganization, recapitalization or similar transaction.

 

(i)                                      A deferral of the filing of a Registration Statement, or the suspension of the continued use of a Registration Statement, pursuant to this Section 2.01(e) , shall be

 

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promptly lifted, and the requested Registration Statement shall be filed as expeditiously as possible, in the case of a deferral, if the negotiations or other activities are disclosed or terminated.

 

(ii)                                   In order to defer the filing of a Registration Statement, or suspend the continued use of a Registration Statement, pursuant to this Section 2.01(e) , the Company shall promptly (but in any event within five days), upon determining to seek such deferral or suspension, deliver to the Investors a certificate signed by the Board stating that the Company is deferring such filing, or suspending the continued use of a Registration Statement, pursuant to this Section 2.01(e)  and a general statement of the reason for such deferral or suspension, as the case may be, and an approximation of the anticipated delay.

 

(iii)                                The Company may defer the filing, or suspend the continued use of, a particular Registration Statement pursuant to this Section 2.01(e)  no more than twice in any 12 month period; provided , that there must be an interim period of at least 90 days between the end of one deferral or suspension period and the beginning of a subsequent deferral or suspension period.

 

(iv)                               In the event the Company exercises its rights under this Section 2.01(e) , the Company will, within 10 days following receipt by the Investors of the notice of deferral or suspension, as the case may be, update the deferred or suspended Registration Statement as may be necessary to permit the Investors to resume use thereof in connection with the offer and sale of its Registrable Securities in accordance with applicable law.

 

Section 2.02                              Piggyback Registration .

 

(a)                                  Participation . If the Company proposes to register any Common Stock or Share Equivalents under the Securities Act (whether for itself or otherwise in connection with a sale of securities by another Person (including a Shelf Registration or a Demand Registration by an Investor), but other than (i) a registration on a Form S-4 (or any successor or similar form) in connection with a direct or indirect acquisition by the Company of another Person, (ii) a registration on a Form S-8 (or any successor or similar form), or (iii) an Initial Public Offering unless Registrable Securities of an Investor are registered, the Company shall at each such time give prompt written notice at least three days prior to the anticipated filing date of the Registration Statement relating to such registration to each Investor and any other Holder holding Registrable Securities hereunder, which notice shall set forth such Investor’s rights under this Section 2.02 and shall offer such Investor the opportunity to include in such Registration Statement all or any portion of the Registrable Securities held by such Investor (a “ Piggyback Registration ”), subject to the restrictions set forth herein.

 

(i)                                      Upon any such request of any such Investor made within three days after the receipt of notice from the Company (which request shall specify the number of Registrable Securities intended to be registered by such Investor), the Company shall use its reasonable best efforts to effect the registration under the Securities Act of all such Registrable Securities that the Company has been so requested to register by all such Investors; provided , that if such registration involves a Public Offering, all such Investors

 

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requesting to be included in the Company’s registration must sell their Registrable Securities to the underwriters selected as provided in Section 2.05(f)  on the same terms and conditions as apply to the Company or any other selling equity holders; provided , however , that no such Person shall be required to make any representations or warranties, or provide any indemnity, in connection with any such registration other than representations and warranties (or indemnities with respect thereto) as to (i) such Person’s ownership of his, her or its Registrable Securities to be transferred free and clear of all liens, claims, and encumbrances, (ii) such Person’s power and authority to effect such transfer, (iii) such matters pertaining to compliance with securities laws by such Person as may be reasonably requested and (iv) such information furnished in writing to the Company by such Person or on behalf of such Person expressly for use in the Registration Statement; provided , further , however , that the obligation of such Person to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among such Persons selling Registrable Securities, and the liability of each such Person will be in proportion thereto; and provided , further , that such liability will be limited to the net proceeds received by such Person from the sale of his, her or its Registrable Securities pursuant to such registration.

 

(ii)                                   If, at any time after giving notice of its intention to register any Registrable Securities pursuant to this Section 2.02(a)  and prior to the effective date of the Registration Statement filed in connection with such registration, the initiating Investors shall decide for any reason not to register such securities, the Company shall give notice to all such Investors and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. No registration effected under this Section 2.02 shall relieve the Company of its obligations to effect a Demand Registration to the extent required by Section 2.01 . The Company shall be liable for and pay all Registration Expenses in connection with each Piggyback Registration, regardless of whether such registration is effected.

 

(b)                                  Reduction of Piggyback Offering . If a Piggyback Registration involves a Public Offering and the managing underwriter advises the Company that, in its view, the number of shares of Common Stock or Share Equivalents that the Company and all selling Holders propose to include in such registration exceeds the largest number of shares of Common Stock or Share Equivalents that can be sold without having an adverse effect on such offering, including the price at which such shares of Common Stock or Share Equivalents can be sold (the “ Piggyback Maximum Offering Size ”), the Company shall include in such registration, in the following priority, up to the Piggyback Maximum Offering Size:

 

(i)                                      first, such number of shares of Common Stock or Share Equivalents proposed to be registered for the account of the Company, if any, as would not cause the offering to exceed the Piggyback Maximum Offering Size;

 

(ii)                                   second, all Registrable Securities requested to be included in such registration by the Investors or any other Holder pursuant to Section 2.01 and this Section 2.02 (the Registrable Securities in this clause (ii) allocated, if necessary for the offering not to exceed the Piggyback Maximum Offering Size, pro rata among such Holders

 

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based on their relative number of Registrable Securities beneficially owned by the Investor as of the date thereof.

 

Section 2.03                              Shelf Registration .

 

(a)                                  Shelf Registration Request .

 

(i)                                      As soon as reasonably practicable after the Initial Public Offering, the Company will use its reasonable best efforts, consistent with the terms of this Agreement, to qualify for and remain eligible to use Form S-3 registration or a similar short-form registration. At any time after the Company becomes eligible to use Form S-3 registration or a similar short-form registration, upon receipt of a written request (the “ Shelf Request ”) from either of the Investors that the Company file a “shelf” Registration Statement pursuant to Rule 415 under the Securities Act (the “ Shelf Registration ”) on Form S-3 (or any successor form to Form S-3, or any similar short form Registration Statement), covering the resale of Registrable Securities, the Company shall (i) consistent with the terms of this Agreement, cause the Shelf Registration to be filed with the Commission as soon as practicable (but in no event later than 20 days following its receipt of the Shelf Request) and (ii) use its reasonable best efforts, consistent with the terms of this Agreement, to cause such Shelf Registration to be declared effective by the Commission as soon as possible.

 

(ii)                                   In connection with any proposed firmly underwritten resale of Registrable Securities which is not pursuant to a Demand Registration under Section 2.01 and with respect to which such Shelf Registration is expressly being utilized to effect such resale (an “ Underwritten Shelf Take-Down ”) pursuant to a Shelf Registration, each Investor agrees, in an effort to conduct any such Underwritten Shelf Take-Down in the most efficient and organized manner, to coordinate with the other Investor prior to initiating any sales efforts and cooperate with the other Investor as to the terms of such Underwritten Shelf Take-Down, including the aggregate amount of securities to be sold and the number of Registrable Securities to be sold by each Investor.  In furtherance of the foregoing, the Company shall give prompt notice to the non-initiating Investor (if such Investor’s Registrable Securities are included in the Shelf Registration) of the receipt of a request from the initiating Investor (whose Registrable Securities are included in the Shelf Registration) of a proposed Underwritten Shelf Take-Down under and pursuant to the Shelf Registration and, notwithstanding anything to the contrary contained herein, will provide such non-initiating Investor a period of one Business Day to participate in such Underwritten Shelf Take-Down, subject to the terms negotiated by and applicable to the initiating Investor and subject to “ cutback ” limitations set forth in Section 2.01(d)  as if the subject Underwritten Shelf Take-Down was being effected pursuant to a Demand Registration.  All such Investors electing to be included in an Underwritten Shelf Take-Down must sell their Registrable Securities to the underwriters selected as provided in Section 2.05(f)  on the same terms and conditions as apply to any other selling stockholders; provided , however , that no such Person shall be required to make any representations or warranties, or provide any indemnity, in connection with any such registration other than representations and warranties (or indemnities with respect thereto) as to (i) such Person’s ownership of his, her or its Registrable Securities to be

 

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transferred free and clear of all liens, claims, and encumbrances, (ii) such Person’s power and authority to effect such transfer, and (iii) such matters pertaining to compliance with securities laws by such Person as may be reasonably requested; provided , further , however , that the obligation of such Person to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among such Persons selling Registrable Securities, and the liability of each such Person will be in proportion thereto, and provided , further , that such liability will be limited to, the net proceeds received by such Person from the sale of his, her or its Registrable Securities pursuant to such registration.

 

(iii)                                At any time that an Investor holds 5% or less of the outstanding Common Stock and does not have an Investor Director Designee (as defined in the Stockholders’ Agreement) on the Board, such Investor may, at its option, unilaterally engage in an Underwritten Shelf Take-Down without any requirement to coordinate with the other Investor pursuant to Section 2.03(a)(ii) by providing notice of such intention to the Company and the Company shall not provide the other Investor any advance notice of the Underwritten Shelf-Take-Down or provide the other Investor or any other Person (including the Company) an opportunity to participate in such Underwritten Shelf Take-Down.  For the avoidance of doubt, the other provisions herein applicable to any Underwritten Shelf Take-Down, including Section 2.03(d) and Section 2.05 shall apply to any offering conducted pursuant to this paragraph.

 

(b)                                  Effectiveness . The Company shall use reasonable best efforts to maintain in effect, supplement and amend, if necessary the Shelf Registration, as required by the instructions applicable to such registration form or by the Securities Act or as reasonably requested by the Investors and will furnish to the holders of Registrable Securities copies of any supplement or amendment to such Shelf Registration.

 

(i)                                      If at any time the Shelf Registration ceases to be effective, then the Company shall use its reasonable best efforts to file and cause to become effective a new “shelf” Registration Statement as promptly as practicable. If, after the Shelf Registration has become effective, any stop order, injunction or other order or requirement of the Commission or other Governmental Authority or other Person with regulatory authority over the Company is threatened, then the Company shall use its reasonable best efforts to prevent the issuance of any order suspending the effectiveness of the Shelf Registration or any order preventing or suspending the use of any preliminary prospectus and, if any such order is issued, to obtain the withdrawal of any such order as soon as reasonably practicable.

 

(c)                                   Limitation . The provisions of this Section 2.03 shall be applicable to each take-down from a Shelf Registration initiated under this Section 2.03 and any subsequent resale of Registrable Securities pursuant thereto; provided , that the reasonably anticipated gross proceeds from any such take-down from a shelf registration initiated under this Section 2.03 shall equal at least $10,000,000.

 

(d)                                  Shelf Registration Expenses . The Company shall be liable for and pay all Registration Expenses in connection with each Shelf Registration, regardless of whether such

 

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Shelf Registration is effected, and any underwritten resale of Registrable Securities which is not pursuant to a Demand Registration under Section 2.01 and with respect to an Underwritten Shelf Take-Down; provided , that the Participating Holders holding Registrable Securities shall each pay their pro rata portion (based on the number of shares each Participating Holder is selling) of all underwriting discounts, selling commissions and stock transfer taxes applicable to such resale of Registrable Securities.

 

Section 2.04                              Lock-Up Agreements .

 

(a)                                  Lock-up . In connection with each underwritten Public Offering including any Demand Registration, any Piggyback Registration or Underwritten Shelf Take-Down, and if requested by the managing underwriter, the Holders agree not to effect any public sale or private offer or distribution (other than a distribution-in-kind pro rata to all stockholders, limited partners or members, as the case may be, or to immediate family members, of such Holder) of any Registrable Securities during the 10 days prior to the consummation of such Public Offering and during such time period after the consummation of such Public Offering, not to exceed 90 days as may be requested by the managing underwriter.  Notwithstanding the foregoing, this Section 2.04 shall not apply to any sale by a Holder or a director or officer of a Holder of Common Stock acquired in open market transactions or block purchases by such Holder or its Affiliates. Any discretionary waiver or reduction of the requirements under the foregoing provisions made by the Company or the applicable lead managing underwriters shall apply to each Holder on a pro rata basis except as otherwise agreed in any lock-up agreement delivered by a Holder to the underwriter(s) in connection with any underwritten Public Offering.  The provisions of this Section 2.04(a)  shall not apply to any Investor that holds 5% or less of the outstanding Common Stock and does not have an Investor Director Designee (as defined in the Stockholders’ Agreement) on the Board unless such Investor actually participates in the underwritten Public Offering.  Moreover, the provisions of this Section 2.04(a)  shall not apply to any unilateral Underwritten Shelf Take-Down effectuated pursuant to Section 2.03(a)(iii) .

 

(b)                                  Notwithstanding anything herein to the contrary, if the Company shall, at any time, register under the Securities Act an offering and sale of Registrable Securities held by the Holders for sale to the public pursuant to an underwritten Public Offering including any Demand Registration, any Piggyback Registration or Underwritten Shelf Take-Down, the Company shall not, without the prior written consent of the lead underwriters for such offering, effect any public sale or distribution of securities similar to those being registered, or any securities convertible into or exercisable or exchangeable for such securities, for such period, not to exceed 90 days, as shall be determined by the lead underwriters and that is for the same period and on substantially similar terms as agreed to by the Investors participating in such offering.

 

(c)                                   At any time following the Initial Public Offering, any Investor that holds less than five percent of the outstanding Common Stock may elect (the “ Withdrawing Holders ”), by written notice to the Company, to withdraw from the provisions of Articles II, III and Sections 4.07 , 4.08 and 4.09 and as a result of such withdrawal, such Withdrawing Holders shall no longer be entitled to the rights, nor be subject to the obligations, of Articles II, III and Sections 4.07 , 4.08 and 4.09 and the Common Stock and Share Equivalents held by the Withdrawing Holders shall conclusively be deemed thereafter not to be “Registrable Securities” under this Agreement. No withdrawal pursuant to this Section 2.04(c)  shall release any

 

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Withdrawing Holder from its indemnification and contribution rights and obligations, if any, pursuant to Article III.

 

Section 2.05                              Registration Procedures . Whenever any Investors request that any Registrable Securities be registered pursuant to, and in accordance with, Section 2.01 , Section 2.02 , or Section 2.03 hereof, subject to the provisions of such Sections, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as quickly as practicable, and, in connection with any such request:

 

(a)                                  The Company shall, as expeditiously as possible, subject to Section 2.01 and 2.03 hereof, upon receipt by the Company of the written request, prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies and the managing underwriter, if any, and the Investors shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its reasonable best efforts to cause such filed Registration Statement to become and remain effective for a period of not less than 180 days or in the case of a Shelf Registration, not less than two years (or such shorter period in which all of the Registrable Securities of the Investors included in such Registration Statement shall have actually been sold thereunder); provided , however , that such 180 day period or two year period, as applicable, shall be extended for a period of time equal to the period any Holder refrains from selling any securities included in such registration at the request of an underwriter and, in the case of any Shelf Registration, subject to compliance with applicable Commission rules, such two year period shall be extended, if necessary, to keep the Registration Statement effective until all such Registrable Securities are sold.

 

(b)                                  Prior to filing a Registration Statement or prospectus or any amendment or supplement thereto, the Company shall furnish to each Holder covered by such Registration Statement and each underwriter, if any, of the Registrable Securities covered by such Registration Statement, copies of such Registration Statement as proposed to be filed, and thereafter the Company shall furnish to such Investor and underwriter, if any, such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A under the Securities Act and such other documents as such Investor or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor.

 

(c)                                   After the filing of the Registration Statement, the Company shall (i) promptly notify each Investor holding Registrable Securities covered by such Registration Statement of the time when such Registration Statement has been declared effective or a supplement or amendment to any prospectus forming a part of such Registration Statement has been filed, (ii) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act and shall incorporate such information as the managing underwriter or underwriters and the Investors agree should be included therein relating to the plan of distribution, (iii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities

 

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covered by such Registration Statement during the applicable period in accordance with the intended methods of disposition thereof by the Investors set forth in such Registration Statement or supplement to such prospectus, and (iv) promptly notify each Investor holding Registrable Securities covered by such Registration Statement of any stop order issued or threatened by the Commission or any state securities commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.

 

(d)                                  The Company shall use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by such Registration Statement under such other securities or “blue sky” laws of such jurisdictions in the United States as any Investor holding such Registrable Securities reasonably (in light of such Investor’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other Governmental Authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable Investors to consummate the disposition of the Registrable Securities owned by them; provided , that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 2.05(d) , (B) subject itself to taxation in any such jurisdiction, or (C) consent to general service of process in any such jurisdiction.

 

(e)                                   The Company shall immediately notify each Holder holding Registrable Securities covered by such Registration Statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly prepare and make available to each such Holder and file with the Commission any such supplement or amendment.

 

(f)                                    The Board shall have the right to select the underwriter or underwriters in connection with any Public Offering, provided that the holders of a majority of the Registrable Securities included in any Demand Registration or Underwritten Shelf Take-Down shall have the right to select the underwriter or underwriters in connection with such Public Offering. In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form, provided that the scope of the indemnity contained in such underwriting agreement on the part of the selling Holders is not more extensive than the indemnity described in Section 3.01(b)  hereof), provided that such agreements are consistent with this Agreement, and take all such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with FINRA. The Company shall make such representations and warranties to the holders of Registrable Securities being registered, and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in secondary underwritten public offerings and take any other actions as the Investors or the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the registration and disposition of such Registrable Securities. Each Holder

 

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participating in such underwriting shall also enter into such agreement, provided that the terms of any such agreement are consistent with this Agreement.

 

(g)                                   Upon execution of confidentiality agreements in form and substance reasonably satisfactory to the Company, the Company shall make available for inspection by the Investors and any underwriter participating in any disposition pursuant to a Registration Statement being filed by the Company pursuant to this Section 2.05 and any attorney, accountant or other professional retained by the Investors or any such underwriter (collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the Company’s officers, managers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such Registration Statement. Records that the Company determines, in good faith, to be confidential and that it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or is otherwise required by law. Each Holder agrees that at the time that such Holder is a Participating Holder, information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it or its Affiliates as the basis for any market transactions in Common Stock unless and until such information is made generally available to the public, and further agrees that, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, it shall give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.

 

(h)                                  The Company shall cause to be furnished to each such underwriter, if any, a signed counterpart, addressed to such underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, as such managing underwriter therefor reasonably requests.

 

(i)                                      The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement or such other document that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder. The Company shall cooperate with each seller of Registrable Securities and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings to be made with FINRA.

 

(j)                                     The Company may require each Participating Holder, by written notice given to each such Participating Holder to promptly furnish in writing to the Company such information regarding the distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be legally required in connection with such registration. Each holder of Registrable Securities agrees to furnish such information to the Company and cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement.

 

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(k)                                  Each Holder agrees that at the time that such Holder is a Participating Holder, upon receipt of any written notice from the Company of the occurrence of any event requiring the preparation of a supplement or amendment of a prospectus relating to the Registrable Securities covered by a Registration Statement that is required to be delivered under the Securities Act so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or to make the statements therein not misleading, such Holder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Holder’s receipt of the copies of a supplemented or amended prospectus, and, if so directed by the Company, such Holder shall deliver to the Company all copies, other than any permanent file copies then in such Holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. If the Company shall give such notice, the Company shall extend the period during which such Registration Statement shall be maintained effective (including the period referred to in Section 2.05(a) ) by the number of days during the period from and including the date of the giving of notice pursuant to Section 2.05(e)  to the date when the Company shall make available to such Holder a prospectus supplemented or amended to conform with the requirements of Section 2.05(e) .

 

(l)                                      The Company shall use its reasonable best efforts to list all Registrable Securities covered by such Registration Statement on the New York Stock Exchange or any other securities exchange (including NASDAQ) on which any of the Registrable Securities are then listed or traded and if none of the Registrable Securities are so listed, on any securities exchange (including NASDAQ) on which similar securities issued by the Company are then listed, and if no such similar securities are listed, on any national securities exchange.

 

(m)                              The Company shall have appropriate officers of the Company (i) prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other reasonable actions to obtain ratings for any Registrable Securities, and (iii) otherwise use their reasonable best efforts to cooperate as requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

 

(n)                                  If any Registration Statement refers to any Holder by name or otherwise as the holder of any Common Stock, and if, based on the reasonable advice of such Holder’s counsel, such Holder is or would be deemed to be an underwriter or a controlling person of the Company, then such Holder shall have the right to require (i) the insertion of language in the Registration Statement, in form and substance satisfactory to such Holder and presented to the Company in writing, to the effect that the holding by such Holder of such Common Stock is not to be construed as a recommendation by such Holder of the investment quality of the Company’s equity securities covered thereby and that such holding does not imply that such Holder shall assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder.

 

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ARTICLE III

 

INDEMNIFICATION AND CONTRIBUTION

 

Section 3.01                              Indemnification .

 

(a)                                  Indemnification by the Company . The Company shall indemnify and hold harmless each Holder, its officers, directors, employees, managers, members, stockholders, partners, agents and Affiliates, and each Person, if any, who controls any such Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (the “ IPO Indemnified Parties ”) from and against any and all losses, claims, actions, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses), joint or several, (“ Damages ”) caused by, arising out of or relating to any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or prospectus relating to the Registrable Securities or any preliminary prospectus or free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) (each, as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or caused by or related to any violation or alleged violation of the Securities Act or Exchange Act, except insofar as such Damages are caused by or related to any such untrue statement or omission or alleged untrue statement or omission so made in reliance upon and in conformity with information furnished in writing to the Company by such Holder or on such Holder’s behalf expressly for use therein. The indemnification provided for under this Section 3.01 shall remain in full force and effect regardless of any investigation made by or on behalf of an IPO Indemnified Party or a subsequent Transfer by an IPO Indemnified Party of its equity securities in the Company. No Holder shall be liable under this Section 3.01 for any Damages in excess of the net proceeds realized by such Holder in the sale of Registrable Securities of such Holder to which such Damages relate.

 

(b)                                  Indemnification by the Participating Holders . Each Holder, at the time that such Holder is a Participating Holder, agrees, severally but not jointly, to indemnify and hold harmless from and against all Damages the Company, its officers, managers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act with respect to information furnished in writing to the Company by such Holder or on such Holder’s behalf expressly for use in any Registration Statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus. As a condition to including Registrable Securities in any Registration Statement filed in accordance with Articles II, III and Sections 4.08 , 4.09 and 4.10 , the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extent customarily provided by underwriters with respect to similar securities. No Holder shall be liable under this Section 3.01(b)  for any Damages in excess of the net proceeds realized by such Holder in the sale of Registrable Securities of such Holder to which such Damages relate.

 

(c)                                   Conduct of Indemnification Proceedings . If any proceeding (including any governmental investigation) shall be instituted involving any Indemnified Party in respect of

 

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which indemnity may be sought pursuant to Articles II, III and Sections 4.08 , 4.09 and 4.10 , such Indemnified Party shall promptly notify the Person against whom such indemnity may be sought (the “ Indemnifying Party ”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses, provided that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) in the reasonable judgment of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any Damages (to the extent stated above) by reason of such settlement or judgment. Without the prior written consent of the Indemnified Party, no Indemnifying Party shall effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement (a) includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding, (b) does not contain a statement about or an admission of fault, culpability or failure to act by or on behalf of such Indemnified Party and (c) does not commit such Indemnified Party to take, or hold back from taking, any action.

 

Section 3.02                              Contribution .

 

(a)                                  If the indemnification provided for in Section 3.01 is unavailable to the Indemnified Parties or insufficient in respect of any Damages (other than by reason of the exceptions provided herein), then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Damages, as between the Company on the one hand and each such Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each such Holder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of each such Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

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(b)                                  The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 3.02(b)  were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the Damages referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 3.02(b) , no Holder shall be required to contribute any amount in excess of the amount by which the net proceeds realized by such Holder in the sale of Registrable Securities of such Holder to which such Damages relate exceeds the amount of any Damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Subject to the foregoing and as among the Holders, each Holder’s obligation to contribute pursuant to this Section 3.02(b)  is several in the proportion that the proceeds of the offering received by such Holder bears to the total proceeds of the offering received by all such Participating Holders and not joint.

 

ARTICLE IV

 

MISCELLANEOUS

 

Section 4.01                              Term . This Agreement shall terminate upon the time as there are no Registrable Securities, except for the all the provisions of Articles III and IV, which shall survive any, such termination.

 

Section 4.02                              Existing Registration Statements . Notwithstanding anything herein to the contrary and subject to applicable law and regulation, the Company may satisfy any obligation hereunder to file a Registration Statement or to have a Registration Statement become effective by a specified date by designating, by notice to the Holders, a Registration Statement that previously has been filed with the Commission or become effective, as the case may be, as the relevant Registration Statement for purposes of satisfying such obligation, and all references to any such obligation shall be construed accordingly; provided , that such previously filed Registration Statement may be amended to add the number of Registrable Securities, and, to the extent necessary, to identify as selling stockholders those Holders demanding the filing of a Registration Statement pursuant to the terms of this Agreement. To the extent this Agreement refers to the filing or effectiveness of other Registration Statements by or at a specified time and the Company has, in lieu of then filing such Registration Statements or having such Registration Statements become effective, designated a previously filed or effective Registration Statement as the relevant Registration Statement for such purposes in accordance with the preceding sentence, such references shall be construed to refer to such designated Registration Statement.

 

Section 4.03                              Specific Performance, Cumulative Remedies . The parties hereto acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party, in addition to any other rights and remedies which the parties may have hereunder or at law or in equity, may, in his or its sole discretion, apply to a court of

 

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competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such rights, powers or remedies by such party.

 

Section 4.04                              Attorneys’ Fees . In any action or proceeding brought to enforce any provision of this Agreement or where any provision hereof is validly asserted as a defense, the successful party shall, to the extent permitted by applicable law, be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.

 

Section 4.05                              Notices . In the event a notice or other document is required to be sent hereunder to the Company or any Holder or legal representative of a Holder, such notice or other document shall be made in writing by hand-delivery, registered or certified first class mail, fax, email or courier guaranteeing overnight delivery to such party at the following addresses (or at such other address as shall be given in writing by any party to the others):

 

if to the Company, to:

 

WideOpenWest, Inc.

7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

Attn: Craig Martin, General Counsel

Facsimile: (269) 567-4193

 

with a copy (which shall not constitute notice) to:

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attention: Joshua N. Korff, P.C. and Brian Hecht

Facsimile: (212) 446-4900

 

if to the Avista Investor Group, to:

 

Avista Capital Partners

65 East 55th Street, 18th Floor

New York, New York 10022

Attention: David Burgstahler, Joshua Tamaroff and Ben Silbert

Facsimile: (212) 593-6901

 

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with a copy (which shall not constitute notice) to:

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attention: Joshua N. Korff, P.C. and Brian Hecht

Facsimile: (212) 446-4900

 

if to the Crestview Investor Group, to:

 

c/o Crestview Partners III, L.P.

667 Madison Avenue, 10th Floor

New York, New York 10065

Attention: Brian Cassidy, Daniel Kilpatrick and Jeff Marcus

Facsimile: (212) 906-0780

 

with a copy (which shall not constitute written notice) to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention: Kenneth M. Schneider and Neil Goldman

Facsimile: (212) 757-3990

If to any other Holder, to the address or email address set forth on the books of the Company or any other address or email address as a party may hereafter specify for such purpose to the Company. Any notice sent to one of the Investors shall also be sent to the other Investor.

 

The Company or any Holder or their respective legal representatives may effect a change of address for purposes of this Agreement by giving notice of such change to the Company, and the Company shall, upon the request of any such Person, notify the other parties hereto of such change in the manner provided herein. Until such notice of change of address is properly given, the addresses set forth herein shall be effective for all purposes.

 

All such notices shall be deemed to have been duly given: (a) when delivered personally by hand, (b) when sent by email or facsimile, (c) when received or rejected by the addressee if sent by registered or certified mail, postage prepaid, return receipt requested, or (d) when received or rejected if sent by overnight courier.

 

Section 4.06                              Amendment; Wavier . Any provision of this Agreement may be amended or waived if, and only if such amendment or waiver is in writing and signed, in the case of an amendment, by the Company and the Investors or, in the case of a waiver, by any of the following parties against whom such waiver is to be effective with respect to the Company or

 

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Holders, as applicable: (i) the Company and (ii) the Investors and (b) this Section 4.06 may not be amended without the prior written consent of all of the Holders.

 

Section 4.07                              Restriction on Company/Company Grants of Subsequent Registration Rights . So long as the Investors hold any Registrable Securities in respect of which registration rights provided for in Section 2.01 of this Agreement remain in effect, the Company will not, directly or indirectly, without the prior written consent of each of the Investors, grant to any Person or agree to otherwise become obligated in respect of (i) the rights of registration in the nature or substantially in the nature of those set forth in Section 2.01 of this Agreement that would have priority over or parity with the Registrable Securities with respect to the inclusion of such securities in any registration or (ii) demand registration rights exercisable prior to such time as the Investors can first exercise its rights under Section 2.01 .

 

Section 4.08                              Cooperation by the Company . With a view to making available to the Holders the benefits of certain rules and regulations of the Commission that may at any time permit the sale of securities to the public without registration, the Board agrees to use, and to cause the Company to use, its reasonable best efforts to:

 

(a)                                  make and keep public information available, as those terms are defined in Rule 144, at all times after the effective date that the Company becomes subject to the reporting requirements of the Securities Act or the Exchange Act;

 

(b)                                  file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements);

 

(c)                                   furnish to any Holder, so long as such Holder owns any Registrable Securities, (i) upon request by such Holder, a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after 90 days after the effective date of the first Registration Statement filed by the Company for a Public Offering), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements) or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) upon request by such Holder, a copy of the most recent annual or quarterly report of the Company and (iii) such other reports and documents of the Company and other information in the possession of, or reasonably obtainable by, the Company as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration; and

 

(d)                                  upon the request of any Holder, instruct the transfer agent in writing that it shall rely on the written legal opinion of such Holder’s counsel, and shall act in accordance with the written instructions of such Holder’s counsel, with respect to any transfer of Common Stock.

 

Section 4.09                              Successors, Assigns and Transferees .

 

(a)                                  Following an Initial Public Offering, the registration rights granted pursuant to this Agreement shall not be assignable or Transferred except to a Permitted Transferee in accordance with this Section 4.09 .

 

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(b)                                  If any Permitted Transferee shall acquire Common Stock or Share Equivalents from any Holder in compliance with the terms of this Agreement, such transferring Holder shall promptly notify the Company and, except to the extent limited by such Holder transferring such Common Stock or Share Equivalents, such Common Stock or Share Equivalents acquired from such Holder shall be subject to all of the terms of this Agreement, and any transferee thereof shall execute and deliver to the Company a joinder agreement in the form of Exhibit A, whereupon such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by and to perform, all of the terms and provisions of this Agreement that are applicable to the Holder transferring such Common Stock Common Stock or Share Equivalents.

 

Section 4.10                              Binding Effect . Except as otherwise provided in this Agreement, the terms and provisions of this Agreement shall be binding on and inure to the benefit of each of the parties hereto and their respective successors.

 

Section 4.11                              Third Parties . It is understood and agreed among the parties that this Agreement and the covenants made herein are made expressly and solely for the benefit of the parties hereto, and that no other Person, other than an Indemnified Party pursuant to Article III shall be entitled or be deemed to be entitled to any benefits or rights hereunder, nor be authorized or entitled to enforce any rights, claims or remedies hereunder or by reason hereof.

 

Section 4.12                              Governing Law; Submission to Jurisdiction; Waiver of Jury Trial .

 

(a)                                  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts entered into and performed entirely within such State.

 

(b)                                  Any claim, action, suit or proceeding (whether in contract or tort) seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be heard and determined in the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware), and each of the parties hereto hereby consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom in any such claim, action, suit or proceeding) and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such claim, action, suit or proceeding in any such court or that any such claim, action, suit or proceeding that is brought in any such court has been brought in an inconvenient forum.

 

(c)                                   Subject to applicable Law, process in any such claim, action, suit or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing and subject to applicable Law, each party agrees that service of process on such party as provided in Section 4.05 shall be deemed effective service of process on such party. Nothing herein shall affect the right of any party to serve legal process in any other manner permitted by Law or at equity. WITH RESPECT TO ANY SUCH CLAIM, ACTION, SUIT OR PROCEEDING IN ANY SUCH COURT, TO

 

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THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES IRREVOCABLY WAIVES AND RELEASES TO THE OTHER ITS RIGHT TO A TRIAL BY JURY, AND AGREES THAT IT WILL NOT SEEK A TRIAL BY JURY IN ANY SUCH PROCEEDING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 4.12 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 4.12 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

Section 4.13                              Severability . If any portion of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, then, so long as no party is deprived of the benefits of this Agreement in any material respect, such portion shall be deemed severable from the remainder of this Agreement, which shall continue in all respects valid and enforceable.

 

Section 4.14                              Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute a single instrument. Copies of executed counterparts transmitted by telecopy or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 4.14 .

 

Section 4.15                              Headings . The headings and subheadings in this Agreement are included for convenience and identification only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereto.

 

[REMAINDER INTENTIONALLY LEFT BLANK]

 

24



 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

 

 

 

WIDEOPENWEST, INC.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[ Signature Page to Registration Rights Agreement ]

 


 

 

AVISTA CAPITAL PARTNERS, L.P.

 

 

 

 

By:

Avista Capital Partners GP, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

AVISTA CAPITAL PARTNERS (OFFSHORE), L.P.

 

By:

Avista Capital Partners GP, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

AVISTA CAPITAL PARTNERS III, L.P.

 

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[ Signature Page to Registration Rights Agreement ]

 



 

 

AVISTA CAPITAL PARTNERS (OFFSHORE) III, L.P.

 

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

AVISTA CAPITAL PARTNERS (OFFSHORE) III-A, L.P.

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

General Partner

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ACP RACECAR CO-INVEST, LLC

 

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

Manager

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[ Signature Page to Registration Rights Agreement ]

 



 

 

ACP RACECAR CO-INVEST II, LLC

 

 

 

 

By:

Avista Capital Partners III GP, L.P.

 

Its:

Manager

 

 

 

 

By:

Avista Capital Managing Member, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[ Signature Page to Registration Rights Agreement ]

 



 

 

CRESTVIEW W1 CO-INVESTORS, LLC

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

CRESTVIEW W1 TE HOLDINGS, LLC

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

CRESTVIEW W1 HOLDINGS, L.P.

 

 

 

 

By:

Crestview W1 GP, LLC

 

Its:

General Partner

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[ Signature Page to Registration Rights Agreement ]

 



 

EXHIBIT A

JOINDER TO THE REGISTRATION RIGHTS AGREEMENT

 

[ · ], 20[ · ]

 

This Joinder Agreement (the “ Joinder Agreement ”) is made as of the date written above by the undersigned (the “ Joining Party ”) in accordance with the Registration Rights Agreement dated as of [ · ], 2017 (as amended and restated or otherwise modified from time to time, the “ Registration Rights Agreement ”) among WideOpenWest, Inc. and the other persons listed on the signature pages thereto. Capitalized terms used, but not defined, herein shall have the respective meanings of ascribed to such terms in the Registration Rights Agreement.

 

The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to the Registration Rights Agreement as of the date hereof and shall have all of the rights and obligations of a “Holder” thereunder as if it had executed the Registration Rights Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Registration Rights Agreement.

 

 

 

 

 

Name:

 

Address:

 

Telephone:

 

Facsimile:

 

AGREED ON THIS [ ] day of [ ], 20 :

 

WIDEOPENWEST, INC.

 

 

By:

 

 

Name:

 

 

Title:

 

 

 




Exhibit 21.1

 

Subsidiaries of WideOpenWest, Inc.

 

Subsidiary

 

State of Incorporation

WideOpenWest Networks, LLC

 

Delaware

WideOpenWest Michigan, LLC

 

Delaware

WideOpenWest Ohio, LLC

 

Delaware

WideOpenWest Illinois, LLC

 

Delaware

WideOpenWest Cleveland LLC

 

Delaware

Sigecom, LLC

 

Indiana

WideOpenWest Mid-Michigan Holdings, LLC

 

Delaware

WideOpenWest Mid-Michigan, LLC

 

Delaware

WideOpenWest Georgia LLC

 

Delaware

Kite Parent Corp.

 

Delaware

Knology, Inc.

 

Delaware

Knology of Montgomery, Inc.

 

Alabama

Knology Total Communications, Inc.

 

Alabama

Knology of the Wiregrass, Inc.

 

Alabama

Wiregrass Telcom, Inc.

 

Alabama

Communications One, Inc.

 

Alabama

Valley Telephone Co., LLC

 

Alabama

Knology Broadband, Inc.

 

Delaware

Knology Data Center Services, Inc.

 

Delaware

Knology of Central Florida, Inc.

 

Delaware

Knology Provider Solutions Group, Inc.

 

Delaware

Knology of Alabama, Inc.

 

Delaware

Knology of Augusta, Inc.

 

Delaware

Knology of Charleston, Inc.

 

Delaware

Knology of Columbus, Inc.

 

Delaware

Knology of Georgia, Inc.

 

Delaware

Knology of Huntsville, Inc.

 

Delaware

Knology of Kentucky, Inc.

 

Delaware

Knology of Knoxville, Inc.

 

Delaware

Knology of Nashville, Inc.

 

Delaware

Knology of South Carolina, Inc.

 

Delaware

Knology of South Dakota, Inc.

 

Delaware

Knology of Tennessee, Inc.

 

Delaware

Knology of Kansas, Inc.

 

Delaware

ITC Globe, Inc.

 

Delaware

Knology of Florida, LLC

 

Delaware

BHFC Publishing, LLC

 

Delaware

Globe Telecommunications, Inc.

 

Georgia

Knology of the Valley, Inc.

 

Georgia

Knology Community Telephone, Inc.

 

South Dakota

Black Hills Fiber Systems, Inc.

 

South Dakota

Knology of the Plains, Inc.

 

South Dakota

Knology of the Black Hills, LLC

 

South Dakota

Knology Condominium Association, Inc.

 

South Dakota

WOW Business Services, LLC

 

Delaware

Maryland Broadband, LLC

 

Delaware

Anne Arundel Broadband, LLC

 

Delaware

WideOpenWest Finance, LLC

 

Delaware

WideOpenWest Networks, Inc.

 

Delaware

 




Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

WideOpenWest, Inc.
7887 East Belleview Avenue, Suite 1000
Englewood, Colorado 80111

 

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated March 23, 2017, relating to the combined consolidated financial statements of WideOpenWest, Inc., which is contained in that Prospectus.

 

We also consent to the reference to us under the caption “Experts” in the Prospectus.

 

/s/ BDO USA, LLP

May 15, 2017