Note 8 - Equity-based Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

8.	EQUITY - BASED COMPENSATION

Through June 30, 2015, certain of the Company’s employees participated in an equity-based incentive compensation plan maintained by GHC for the benefit of certain officers, directors and employees. Equity-based awards issued to employees include non-qualified stock options and restricted stock awards. These compensation costs are recognized within selling, general and administrative expenses.

Adoption of Certain Compensation and Benefit Plans

On June 5, 2015, the Cable One board of directors (the “Board”) adopted the Cable One, Inc. 2015 Omnibus Incentive Compensation Plan (the “2015 Plan”), contingent upon the approval of such plan by GHC and effective as of the date of the spin-off, and on the same date, GHC approved the 2015 Plan.

The 2015 Plan is designed to promote the interests of the Company and its stockholders by providing the employees and directors of the Company with incentives and rewards to encourage them to continue in the service of the Company and with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. Any of the directors, officers and employees of the Company and its affiliates are eligible to be granted one or more of the following types of awards under the 2015 Plan: (1) incentive stock options, (2) non-qualified stock options, (3) restricted stock awards, (4) stock appreciation rights, (5) RSUs, (6) cash-based awards, (7) performance-based awards, (8) dividend equivalent rights and (9) other stock-based awards, including, without limitation, performance stock units and deferred stock units. The 2015 Plan includes the authority to grant awards that are intended to qualify as “qualified performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended. Unless the 2015 Plan is sooner terminated by the Board, no awards may be granted under the 2015 Plan after the tenth anniversary of its effective date.

The 2015 Plan provides that, subject to certain adjustments for certain corporate events, the maximum number of shares of Company common stock that may be issued under the plan is equal to 600,000, and no more than 400,000 shares may be issued pursuant to incentive stock options.

The 2015 Plan became effective on July 1, 2015, the date the spin-off was completed.

Compensation Expense

. Total equity-based compensation costs recognized were $4.0 million and $0.5 million for the three months ending June 30, 2015 and 2014, respectively, and were $4.3 million and $1.0 million for the six months ending June 30, 2015 and 2014, respectively. A portion of these charges relates to costs allocated to the Company for GHC corporate employees not solely dedicated to the Company. As of June 30, 2015 and 2014, there were 0 and 20,403, respectively, in GHC restricted stock awards outstanding related to the Company’s specific employees. As of June 30, 2015 and 2014, there were approximately 750 and 22,000, respectively, in GHC stock options outstanding related to the Company’s specific employees. These awards and related amounts are not necessarily indicative of awards and amounts that would have been granted if the Company had been an independent, publicly traded company for the periods presented.

Also, in connection with the spin-off GHC modified the terms of 10,830 restricted stock awards in the second quarter of 2015 affecting 21 Cable One employees. The modification resulted in the acceleration of the vesting period of 6,324 restricted stock awards and the forfeiture of 4,506 restricted stock awards. The Company recorded incremental stock compensation expense, net of forfeitures, in the second quarter of 2015 amounting to $3.7 million, which is included in selling, general and administrative expense in the condensed consolidated statement of operations.