UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Soliciting Material Pursuant to §240.14a-12 | ||||||
| Charter Communications, Inc. | ||||||
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March 20, 2012
You are invited to attend the annual meeting of stockholders of Charter Communications, Inc. (the “Company” or “Charter”), which will be held at the Four SeasonsThe Ritz Carlton Hotel, 1111 14thDenver, 1881 Curtis Street, Denver, Colorado 80202 on Tuesday, April 26, 2011May 1, 2012 at 10:00 a.m.a. m. (Mountain Daylight Time).
All stockholders of record at the close of business on February 25, 2011March 2, 2012 are invited to attend the meeting. For security reasons, however, to gain admission to the meeting you may be required to present identification containing a photograph and to comply with other security measures. Parking at the Hotel for the Annual Meeting will be complimentary. Please inform the attendant you are attending the Charter Annual Meeting.
Details of the business to be conducted at the annual meeting are provided in the attached Notice of Annual Meeting and Proxy Statement.
Whether or not you attend the annual meeting, it is important that your shares be represented and voted at the meeting. Therefore, I urge you to sign, date, and promptly return the enclosed proxy in the postage-paid envelope that is provided, or you may vote via the Internet pursuant to the instructions on the proxy card. If you decide to attend the annual meeting, you will have the opportunity to vote in person.
On behalf of the Board of Directors, I would like to express our appreciation for your continued interest in the affairs of the Company.
| Sincerely, |
 |
| Thomas M. Rutledge |
| President and Chief Executive Officer |
12405 Powerscourt Drive
St. Louis, Missouri 63131
NOTICE OF CONTENTS
OF
CHARTER COMMUNICATIONS, INC.
Time: | 10:00 a.m. (Mountain Daylight Time) | |||
Place: | ||||
| 1881 Curtis Street | ||||
| Denver, Colorado 80202 | ||||
Matters to be voted on:
| 1 | |
To elect eleven Class A directors, nominated by our board of directors and named in this proxy statement; |
| 2 | |
To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, |
| 3 | To vote on any other matters properly brought before the stockholders at the meeting. |
The proxy statement more fully describes these proposals.
| By order of the Board of Directors, |
 |
| RICHARD R. DYKHOUSE |
| Corporate Secretary |
March 15, 2011
PROXY STATEMENT
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on April 26, 2011.May 1, 2012. The 20112012 notice and proxy statement and the 20102011 annual report to stockholders are available at www.proxyvote.com.www.proxyvote.com.
This proxy statement and Thethe Notice of Internet Availability of Proxy Materials were first mailed to stockholders on or about March 15, 2011.
Questions and Answers about Voting and the Annual Meeting
What matters will be voted on at the annual meeting?
As a holder of Class A common stock, you are being asked to vote, on the following:
Proposal 1: To elect eleven Class A directors, nominated by our board of directors and named in this proxy statement;
Proposal 2: To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2012; and
Proposal 3: To vote on any other matters properly brought before the stockholders at the meeting.
How does the board of directors recommend that I vote?
The board of directors recommends that you vote:
FORthe election of the eleven Class A directors, nominated by our board of directors and named in this proxy statement; and
FORthe ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2012.
What if other matters come up at the annual meeting?
The items listed on the Notice of Annual Meeting of Stockholders are the only matters that we know will be voted on at the annual meeting. Your proxy gives discretionary authority to the persons named on the proxy card to vote on other matters. On such other business as may properly come before the meeting, your shares will be voted in the discretion and judgment of the proxy holder.
The board of directors has nominated the eleven current directors for re-election.election. The eleven directors who have been nominated by the board of directors and agreed to serve as directors are: Messrs. Cohn, Conn, Glatt, Jacobson, Karsh, Lee, Lovett,Marcus, Markley, Merritt, Parker, Rutledge and Zinterhofer.
Who can vote at the annual meeting?
Holders of a total of 114,489,841100,514,716 shares of Class A common stock, as of the close of business on February 25, 2011March 2, 2012 (the “Record Date”), are entitled to vote at the annual meeting. Each holder of Class A common stock is entitled to one vote per share. The enclosed proxy card indicates the number of Class A shares that our records show you are entitled to vote.
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What is the difference between being a stockholder of record and a beneficial owner?
You are a stockholder of record if at the close of business on the Record Date;Date, your shares were registered in your name with BNY Mellon ShareholderComputershare Shareowner Services, our transfer agent and registrar.
You are a beneficial owner if at the close of business on the Record Date, your shares were held by a brokerage firm or other nominee and not directly in your name, but are held in “street name.” As the beneficial owner of your shares, you have the right to direct your broker or other nominee how to vote your shares, i.e., for or against the proposals to be considered at the annual meeting. If you do not provide your broker or nominee with instructions on how to vote your shares, your broker or nominee will be able to vote your shares with respect to some of the proposals, but not all. See,“What if I do not provide instructions on how to vote my shares,”below.
What do I do if my shares are held in “street name”?
If your shares are held in the name of your broker or other nominee, you should return your proxy in the envelope provided by such broker or nominee or instruct the person responsible for holding your shares to execute a proxy on your behalf. In either case, your shares will be voted according to your instructions.
What if I do not provide instructions on how to vote my shares?
If you are a stockholder of record and you submit a proxy, but do not provide voting instructions, your shares will be voted for the election of the Company’s director nominees and“FOR”the proposals as described above.
If you are a beneficial owner and you do not provide the broker or other nominee which holds your shares with voting instructions, the broker or other nominee has discretionary authority to vote for certain proposals, but not others pursuant to the rules of NASDAQ and the Securities and Exchange Commission (“SEC”). Brokers and other nominees have the discretion to vote on routine matters such as Proposal 6,2, but not on non-routine matters such as Proposals 1, 2, 3, 4 and 5 .Proposal 1. Therefore, if you do not provide voting instructions to the broker or other nominee that holds your shares, the broker or other nominee may only vote for Proposal 62 and any other routine matters properly presented for a vote at the annual meeting.
What is the quorum required for the meeting?
We will hold the annual meeting if holders of shares having a majority of the record and beneficial holdersvoting power of the Class A common stock as of the Record Date either sign and return their proxy cards, vote via the Internet or attend the meeting. If you sign and return your proxy card or vote via the Internet, your shares will be counted to determine whether we have a quorum, even if you fail to indicate your vote.
Abstentions and broker “non-votes” will be counted as present for purposes of determining whether a quorum exists at the annual meeting.
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A broker “non-vote” occurs when a broker or other nominee holding shares for a beneficial owner votes on one proposal but does not vote on another proposal because the broker or other nominee does not have discretionary voting power for that particular proposal and has not received voting instructions from the beneficial owner.
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What is the vote required for the proposals on the agenda?
The affirmative vote of the holders of a majority of Class A shares cast is required for (i) the election of the Class A directors, (ii) approval of the Company’s Executive Bonus Plan, (iii) approval of the Company’s Executive Incentive Performance Plan, (iv) approval, on an advisory basis, of the compensation of our named executive officers, (v) approval, on an advisory basis, of a triennial advisory vote on executive compensation, and (vi)(ii) the ratification of the appointment of KPMG as our independent registered public accounting firm, Proposals 1 through 6,and 2, respectively. Under our Certificate of Incorporation and Bylaws, for purposes of determining whether votes have been cast, abstentions and broker “non-votes” will not be counted.
A stockholder may vote to “abstain” on any of the proposals. If you vote to “abstain,” your shares will be counted as present at the meeting for purposes of determining a quorum on all matters, but will not be considered to be votes cast with respect to such matters. Abstentions will not be voted and will have the effect of a vote against the proposals. If an executed proxy is returned by a broker holding shares in street name that indicates that the broker does not have discretionary authority as to certain shares to vote on one or more matters (a broker non-vote), such shares will be considered present at the meeting for purposes of determining a quorum on all matters, but will not be considered to be votes cast with respect to such matters. Therefore, broker non-votes will have the effect of a vote against the proposals. In addition, in the election of directors, a stockholder may withhold such stockholder’s vote.
What are my choices in the proposals on the agenda?
On Proposal 1, you can vote your shares “FOR,” or you can withhold your vote for the Class A director nominees. On ProposalsProposal 2, 3, 4 and 6, you can (1) vote for a proposal, (2) vote against a proposal, or (3) abstain from voting. On Proposal 5, you can vote for an advisory vote on when to review executive compensation every (1) one year, (2) two years, or (3) years or (4) you may abstain from voting.
How do I vote by proxy?
Follow the instructions on the enclosed proxy card.Sign and date the proxy card and mail it back to us in the enclosed envelope. If you receive more than one proxy card it may mean that you hold shares in more than one account. Sign and return all proxy cards to ensure that all of your shares are voted. The proxy holder named on the proxy card will vote your shares as you instruct. If you sign and return the proxy card but do not indicate your vote, the proxy holder will vote on your behalf“FOR”each of the Proposals as noted above.
Can I vote via the Internet?
Stockholders with shares registered in their names with BNY MellonComputershare Shareowner Services, our transfer agent, may authorize a proxy via the Internet at the following address:http://www.proxyvote.com.addresswww.proxyvote.com. A number of brokerage firms and banks participate in a program that permits Internet voting. If your shares are held in an account at a brokerage firm or bank that participates in such a program, you may direct the vote of those shares by following the instructions on the voting form enclosed with the proxy from the brokerage firm or bank.
Proxies submitted via the Internet must be received by 11:59 p.m. (EDT) on April 25, 2011.30, 2012. Please refer to your voting instruction formand/or your proxy card for specific voting instructions. If you vote this year’s proxy via the Internet, you may also elect to receive future proxy and other materials electronically by following the instructions when you vote. Making this election will save the Company the cost of producing and mailing these documents.
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Yes. At any time before the vote at the annual meeting, you can change your vote either by giving our Corporate Secretary a written notice revoking your proxy card, or by signing, dating and submitting a new proxy card. We will honor the latest dated proxy card which has been received prior to the closing of the voting. You may also attend the meeting and vote in person.
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Can I vote in person at the annual meeting rather than by completing the proxy card?
Although we encourage you to complete and return the proxy card to ensure that your vote is counted, you can attend the annual meeting and vote your shares in person. If you wish to attend the annual meeting and vote your shares in person and you are the beneficial owner of your shares, you must obtain the documents required to vote your shares in person at the annual meeting from your broker, or other nominee.
Who will count the votes?
Broadridge Financial Solutions, Inc. has been appointed to receive and tabulate stockholder votes and to act as the inspector of election and certify to the election results.
Who is soliciting my vote?
The board of directors is soliciting your vote.
Who pays for this proxy solicitation?
The Company pays for the proxy solicitation. We will ask banks, brokers and other nominees and fiduciaries to forward the proxy material to the beneficial owners of the Class A common stock and to obtain the authority of executed proxies. We will reimburse them for their reasonable expenses.
Proposal No. 1: Election of Class A Directors
(Item 1 on Proxy Card)
The Company currently has eleven directors, each of whom is elected on an annual basis. The board of directors is soliciting your vote for the Class A directors to be elected at the annual meeting of stockholders. Once elected, each of the directors will hold office until his or her successor is elected, which we expect to occur at next year’s annual meeting of stockholders.
THE BOARD OF DIRECTORS RECOMMENDS VOTING “FOR” THE CLASS A DIRECTOR NOMINEES.
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The following information concerns the eleven individuals who have been nominated by the board of directors for election by the Class A stockholders. EachExcept for Mr. Marcus, who has been nominated by the board to replace Robert Cohn, each of the following individuals currently serves as a Class A director.
Directors | Position(s) | |
W. Lance Conn | Director | |
Darren Glatt | Director | |
Craig A. Jacobson | Director | |
Bruce A. | Director | |
Edgar Lee | Director | |
Jeffrey A. Marcus | Director | |
John D. Markley, Jr | Director | |
David C. Merritt | Director | |
Stan Parker | Director | |
Thomas M. Rutledge. | Director, President and Chief Executive Officer | |
Eric L. Zinterhofer | Chairman of the Board of Directors |
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W. Lance Conn, 42,43, was elected to the board of directors of Charter on November 30, 2009. Mr. Conn previously served on Charter’s board of directors since September 2004. From July 2004 to May 2009, Mr. Conn served as the President of Vulcan Capital, the investment arm of Vulcan, Inc. Prior to joining Vulcan, Inc., Mr. Conn was employed by America Online, Inc., an interactive online services company, from March 1996 to May 2003. From September 1994 to February 1996, Mr. Conn was an attorney with Shaw, Pittman, Potts & Trowbrige LLP in Washington, D.C. Mr. Conn served as an officer of Charter Investment, Inc. prior to and during the time of its Chapter 11 bankruptcy proceedings filed concurrently with Charter’s Chapter 11 proceedings. Mr. Conn holds a J.D. degree from the University of Virginia, a M.A. degree in history from the University of Mississippi and an A.B degree in history from Princeton University. We believe Mr. Conn’s qualifications to sit on Charter’s board include his experience in the media business and as a director.
Darren Glatt, 35,36, was elected to the board of directors of Charter on November 30, 2009. Mr. Glatt is a Principalpartner at Apollo Management, L.P. and has been with Apollo since 2006. During his tenure at Apollo, Mr. Glatt has focused on investments in the media, communications and leisure sectors. Prior to joining Apollo, Mr. Glatt was a member of the Media Group at Apax Partners from 2004 to 2006, a member of the Media Group at the Cypress Group from 2000 to 2002 and a member of the Mergers & Acquisitions Group at Bear, Stearns & Co. from 1998 to 2000. Mr. Glatt also serves on the board of directors of CKX Entertainment Holdings, Inc., PlayPower Holdings, Inc., Principal Maritime Holdings, LLC and Veritable Maritime Holdings, LLC. Mr. Glatt received a M.B.A.his MBA from the Harvard Business School and graduated summa cum laude from George Washington University’s School of Business & Public Management. We believe Mr. Glatt’s qualifications to sit on Charter’s board include his experience in the media, banking and investmentsinvestment industries.
Craig A. Jacobson, 58,59, was elected to the board of directors of Charter on July 27, 2010. Mr. Jacobson is a founding partner at the law firm of Hansen, Jacobson, Teller, Hoberman, Newman, Warren, & Richman, Rush and Kaller, L.L.P., where he has practiced entertainment law for the past 2025 years. Mr. Jacobson is a member of the Board of Directors of Expedia, Inc. and, Aver Media, a privately held Canadian lending institution.institution, and Eventful, Inc., a privately held digital entertainment and live event service company. Mr. Jacobson was a director of Ticketmaster from August 2008 until its merger with Live-Nation, Inc. in January 2010. Mr. Jacobson received his Bachelor of Arts degree from Brown University in 1974, where he was a member of Phi Beta Kappa, and his J.D.
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Bruce A. Karsh, 55,56, was elected to the board of directors of Charter on November 30, 2009. Since 1995, Mr. Karsh has served as President and co-founder of Oaktree Capital Management, L.P., formerly Oaktree Capital Management, LLC, a Los Angeles- basedAngeles-based investment management firm. Prior to co-founding Oaktree, Mr. Karsh was a Managing Director of Trust Company of the West (“TCW”) and its affiliate, TCW Asset Management Company, and the portfolio manager of the Special Credits Funds for seven years. Prior to joining TCW, Mr. Karsh worked as Assistant to the Chairman of Sun Life Insurance Company of America and of SunAmerica, Inc., its parent. Prior to that, he was an attorney with the law firm of O’Melveny & Myers. Mr. Karsh holds an A.B. degree in Economics from Duke University and a J.D. from the University of Virginia School of Law. Mr. Karsh serves as the Chairman of the Board of Directors for Duke University’s investment management company and serves as a director of Oaktree Capital Group, LLC, LBI Media Holdings, Inc. and LBI Media, Inc. During the last five years, Mr. Karsh has also served as a director of Littelfuse, Inc. We believe Mr. Karsh’s qualifications to sit on Charter’s board include his business and investment experience.
Edgar Lee, 35,36, was elected to the board of directors of Charter on January 18, 2011. He is Senior Vice President of Oaktree Capital Management, L.P. Mr. Lee joined Oaktree Capital Management in 2007. From 2005 to 2007, Mr. Lee was an Associate Director in the TMT Investment Banking division of UBS Investment Bank in Los Angeles. Prior to UBS, Mr. Lee was an Associate in the Fixed Income Division at Lehman Brothers Inc. Mr. Lee received a B.A. in Economics from Swarthmore College and a M.P.P. with a concentration in Applied Economics from Harvard University. We believe Mr. Lee’s qualifications to sit on Charter’s board include his business and investment experience.
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Michael J. LovettJeffrey A. Marcus, 49, was elected65, Mr. Marcus joined Crestview Partners, L.P. in 2004 as a directorManaging Director. He is a media and communications entrepreneur who previously served as the President and Chief Executive Officer of the Company on April 12, 2010, having previously served as Interim President and Chief Executive Officer and Chief Operating Officer from February 28, 2010 through April 12, 2010. Mr. Lovett previously served as Executive Vice President and Chief Operating Officer since 2005. Prior to that, he served as Executive Vice President, Operations and Customer Care from September 2004 through March 2005; as Senior Vice President, Midwest Division Operations; and as Senior Vice President of Operations Support of Charter from August 2003 through September 2004. Mr. Lovett was Chief Operating Officer of Voyant Technologies,AMFM, Inc., from December 2001 to August 2003(formerly Chancellor Media Corporation), one of the nation’s largest radio broadcasting companies. Mr. Marcus was also the founder and from November 2000 to December 2001, he was Executive Vice President of Operations for OneSecure, Inc. Prior to that, Mr. Lovett served in a number of operating and leadership positions at AT&T and Jones Intercable. Mr. Lovett served as anchief executive officer of Charter duringMarcus Cable Company, which was the pendencylargest privately held cable company in the United States at the time of its Chapter 11 casessale in 2009.1998. Mr. Marcus also founded an earlier cable company, Marcus Communications, Inc., which was merged into Western Tele-Communications, Inc. Mr. Marcus served as the chief executive officer of the merged and renamed company, WestMarc Communications, Inc. until 1988. In 1989, the company was sold to Tele-Communications, Inc. Mr. Marcus is currently a director of Cumulus Media, Inc., CWGS Enterprises, LLC, OneLink Communications (MCNA Cable Holdings LLC and San Juan Cable LLC) and Insight Communications Company, Inc. and has served on public and private company boards of directors, including Brinker International, Inc., AMFM Inc. and WestMarc Communications, Inc. Mr. Marcus received his B.A. in Economics from the University of California — Berkeley. We believe that Mr. Lovett’sMarcus’ qualifications to sit on ourCharter’s board include his many years of experience as an executive in the media industry.
John D. Markley, JrJr.., 45,46, was elected to the board of directors of Charter on November 30, 2009. Since 1996, Mr. Markley has been affiliated with Columbiaserved as Managing Director of Bear Creek Capital aManagement, an investment firm focused on public and private companies in the communications, media and technology investment firm, where he has served inindustries, since 2009. From 1996 to 2009, Mr. Markley was a number of capacities, including portfolio company executive, general partner andat Columbia Capital, a venture partner.capital firm. Prior to joining Columbia Capital, Mr. Markley servedwas at the Federal Communications Commission where he developed U.S.US Government wireless communicationsspectrum policy, and spectrum auction policy. He also held positions in corporate finance forwith Kidder, Peabody, & Co. in both New York City and Hong Kong.an investment firm. Mr. Markley is currently a director of Telecom Transport Management, Inc., Broadsoft, Inc.,a publicly traded company, and Millennial Media, Inc. Henumerous private companies. Mr. Markley received a B.A. degree from Washington and& Lee University and a M.B.A.an M.B.A degree from Harvard University.Business School. We believe Mr. Markley’s qualifications to sit on Charter’s board include his experience in the telecommunications and media industries.
David C. Merritt, 56,57, was elected to the board of directors of Charter on December 15, 2009, and was also appointed as Chairman of Charter’s Audit Committee at that time. Mr. Merritt previously served on Charter’s board and Audit Committee since 2003. Effective March 2009, he is the president of BC Partners, Inc., a financial advisory firm. From October 2007 to March 2009, Mr. Merritt served as Senior Vice President and Chief Financial Officer of iCRETE, LLC. From October 2003 to September 2007, Mr. Merritt was a Managing Director of Salem Partners, LLC, an investment banking firm. Mr. Merritt is a director of Outdoor Channel Holdings, Inc. and of Calpine Corporation and currently serves as Chairman of the Audit Committee of each company. He is also a director of Buffet Restaurants Holdings, Inc. From 1975 to 1999, Mr. Merritt was an audit and consulting partner of KPMG
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Stan Parker, 34,36, was elected to the board of directors of Charter on January 18, 2011. He is a senior partner of Apollo Global Management LLC, having joined the firm as an associate in 2000. Prior to that time, Mr. Parker was employed by Salomon Smith Barney, Inc. in its Financial Entrepreneurs Group within the Investment Banking Division. Mr. Parker also serves on the board of directors of AMC Entertainment Inc., AMC Entertainment Holdings, Inc., Affinion Group, CEVA Logistics, and Momentive Performance Materials.Materials and CKX Entertainment Holdings, Inc. Mr. Parker holds a B.S. degree in Economics from The Wharton School of Business at the University of Pennsylvania. We believe Mr. Parker’s qualifications to sit on Charter’s board include his business and investment experience.
Thomas M. Rutledge, 58, was appointed as a director and President and Chief Executive Officer of the Company effective on February 13, 2012. Prior to joining Charter, Mr. Rutledge served as Chief Operating Officer of Cablevision from April 2004 until December 2011. A 34-year cable industry veteran, Mr. Rutledge previously served as president of Time Warner Cable. He began his career in 1977 at American Television and Communications (ATC), a predecessor company of Time Warner Cable. Mr. Rutledge currently serves on the
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board of the National Cable and Telecommunications Association (NCTA). He served as Chairman of the NCTA from 2008-2010, and currently serves on the boards of CableLabs, C-SPAN and the CTAM Educational Foundation. In 2011, he received NCTA’s Vanguard Award for Distinguished Leadership, the cable industry’s highest honor. He is a member of the Cable Hall of Fame and was inducted into the Broadcasting and Cable Hall of Fame in 2011. He received a B.A. in economics from California University in California, Pennsylvania in 1977. We believe Mr. Rutledge’s qualifications to sit on Charter’s board include his many years of experience as an executive in the media industry.
Eric L. Zinterhofer, 39,40, was elected to the board of directors of Charter on November 30, 2009 and as non-executive Chairman of the board on December 1, 2009. In 2010, Mr. Zinterhofer founded Searchlight Capital Partners, LLC, a private equity firm. Previously, he served as a senior partner at Apollo Management, L.P. and was with Apollo from 1998 until May 2010. From 1994 to 1996, Mr. Zinterhofer was a member of the Corporate Finance Department at Morgan Stanley Dean Witter & Co. From 1993 to 1994, Mr. Zinterhofer was a member of the Structured Equity Group at J.P. Morgan Investment Management. Mr. Zinterhofer is a director of Central European Media Enterprises Ltd., and Dish TV India Ltd.Ltd, and Hunter Boot Ltd.. In the past five years, Mr. Zinterhofer was a director of iPCS, Inc, Unity Media SCA and Affinion Group, Inc. Mr. Zinterhofer received B.A. degrees in Honors Economics and European History from the University of Pennsylvania and received aan M.B.A. from Harvard Business School. We believe Mr. Zinterhofer’s qualifications to sit on Charter’s board include his experience as a director and in the banking and investment industries.
Board of Directors and Committees of the Board of Directors
Our board of directors meets regularly throughout the year on an established schedule. The board also holds special meetings and acts by written consent from time to time as necessary. The Company has not held an annual stockholders’ meeting for the past two years, but membersin 2011, which all directors attended. Members of the board of directors are encouraged to attend the annual meeting each year. In 2010,2011, the full board of directors held eleven12 meetings and acted two5 times by written consent. No incumbent director attended fewer than 75%81% of the total number of meetings of the board and of committees on which he or she served.
The board of directors delegates authority to act with respect to certain matters to board committees whose members are appointed by the board. The committees of the board of directors include the following: Audit Committee, Compensation and Benefits Committee, Nominating and Corporate Governance Committee, Section 162(m) Committee and Finance Committee. The Audit, Compensation and Benefits, Finance and Nominating and Governance Committees each has a charter which is available on our website, www.charter.com.
Charter’s Audit Committee consisted of Messrs. Merritt, Jacobson and Christopher M. TempleMarkley in 2010.2011. Mr. Temple resigned fromMarkley joined the board of directorsAudit Committee in January, 2011 and Mr. Markley was appointed to succeed him on the Audit Committee.2011. Mr. Merritt is Chairman of the Audit Committee. Charter’s board of directors has determined that, in its judgment, Mr. Merritt is an audit committee financial expert within the meaning of the applicable federal regulations. All members of the Audit Committee were determined by the board in 20102011 to be independent in accordance with the listing standards of the NASDAQ Global Select Market.Market and Rule 10A-3 of the Securities Exchange Act of 1934, as amended. The Audit Committee met eight times in 2010.
The Compensation and Benefits Committee, which has a written charter approved by the board, reviews and approves the Company’s compensation of the senior management of the Company and its subsidiaries. TheDuring 2011, the Committee iswas comprised of Messrs. Conn and Zinterhofer as well as Robert Cohn, and Zinterhofer.who is not standing for re-election. Mr. Conn is Chairman of the Committee. All members of the Compensation and Benefits Committee were determined by the board in 20102011 to be independent in accordance with the listing standards of the NASDAQ Global Select Market. The Compensation and Benefits Committee met ninesix times in 20102011 and executed three unanimous consents in lieu of meetings.
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The Section 162(m) Committee reviews the Company’s compensation for purposes of qualifying as performance-related compensation and thus meeting the provisions under Internal Revenue Code 162(m) for deductibility. TheIn 2011, the Committee iswas comprised of Messrs. Cohn and Markley and it met three times in 2010.
The Finance Committee to reviewreviews the Company’s financing activities and approveapproves the terms and conditions of certain financing transactions referred to it by the board, in consultation with the Company’s legal and financial advisors. The Finance Committee in 20102011 consisted of Messrs. Lee, Merritt and Parker, Messrs. Lee and Parker having been appointed in March 2011. The Finance Committee met eleven times during the year and executed two unanimous consents in lieu of meetings.
From time to time, the board may create “ad hoc” committees for specific projects or transactions. In 2011, the board appointed an ad hoc Human Resources Committee to consider transition issues for President and Chief Executive Officer. The Search Committee was appointed after Mr. Lovett announced his resignation in October 2011. The Human Resources Committee was comprised of Messrs. Karsh, Merritt, Parker and Zinterhofer and it met fivethree times duringin 2011. The Search Committee was comprised of Messrs. Glatt, Karsh, Lee, Parker and Zinterhofer and it met once in 2011. The board also appointed the year.
The Company’s Nominating and Corporate Governance Committee of the board of directors has determined that Messrs. Cohn, Conn, Jacobson, Markley and Merritt are independent directors under NASDAQ rules as was Mr. Temple.rules. Messrs. Glatt, Karsh, Lee, Marcus, Parker and Zinterhofer are independent under the NASDAQ rules as was Mr. McGrath;rules; however, their status or relationship with an affiliate of the Company prohibits an independence finding under SEC rules for Audit Committee membership purposes. Mr. LovettRutledge was appointed to the board of directors effective on February 13, 2012. Mr. Rutledge is the President and Chief Executive Officer of the Company and is thus not independent.
Nomination and Qualifications of Directors
Candidates for director are nominated by the board of directors, based on the recommendation of the Nominating and Corporate Governance Committee. Charter’s Corporate Governance Guidelines provide that, among other things, that candidates for new board members to be considered by the Charter’s board of directors should be individuals from diverse business and professional backgrounds with unquestioned high ethical standards and professional achievement, knowledge and experience. Candidates should include diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills. The Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity; however, the board of directors and the Nominating and Corporate Governance Committee believe that it is essential that board members represent diverse viewpoints. In considering candidates for the Board, the Nominating and Corporate Governance Committee considers the entirety of each candidate’s credentials in the context of these standards. In addition, director candidates must be individuals with the time and commitment necessary to perform the duties of a board member and other special skills that complement or supplement the skill sets of current directors.
Stockholders may nominate persons to be directors by following the procedures set forth in our Bylaws. These procedures require the stockholder to deliver timely notice to the Corporate Secretary at our principal
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executive offices. That notice must contain the information required by the Bylaws about the stockholder proposing the nominee and about the nominee. No stockholder nominees have been proposed for this year’s meeting.
Stockholders also are free to suggest persons for the board of directors to consider as nominees. The board of directors will consider those individuals if adequate information is submitted in a timely manner (see “Stockholders Proposal for 20122013 Annual Meeting” below for deadline requirements) in writing to the board of directors at the Company’s principal executive offices, in care of the General Counsel. The board of directors may, however, give less serious consideration to individuals not personally known by the current board members.
Board Leadership Structure and Risk Oversight
We separate the roles of CEOChief Executive Officer (“CEO”) and Chairman of the boardBoard in recognition of the differences between the two roles. The CEO is responsible for setting the strategic direction for the Company and the day to day leadership and
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The full board of directors oversees the various risks to the Company, delegating to the various committees specific responsibilities. The Audit Committee reviews our Enterprise Risk Management (“ERM”) Program on a regular basis. The Audit Committee meets regularly with members of management in executive session, as well as with the Chief Compliance Officer, the Vice PresidentSenior Director of Internal Audit Services and representatives of our independent outside accounting firm. The Compensation and Benefits Committee oversees our compensation policies and practices, including reviewing our incentive and equity-based compensation plans and benefits plans. The Nominating and Corporate Governance Committee oversees corporate governance, including recommending board and committee nominations, the corporate guidelines and director independence.
Stockholder Contact with Directors
Individuals may communicate directly with members of the board of directors or members of the board’s standing committees by writing to the following address:
Charter Communications, Inc.
12405 Powerscourt Drive
St. Louis, Missouri 63131
Attn: Corporate Secretary
The Corporate Secretary will summarize all correspondence received, subject to the standards below, and periodically forward summaries to the board. Members of the board may at any time request copies of any such correspondence. Communications may be addressed to the attention of the board, a standing committee of the board, or any individual member of the board or a committee. Communication that is primarily commercial in nature, relates to an improper or irrelevant topic, or requires investigation to verify its content may not be forwarded.
20102011 Director Compensation
During the first quarter of directors2011, the prior year’s non-employee director compensation package was appointed pursuant to the Plan consisting of W. Lance Conn, Robert Cohn, Bruce Karsh, Darren Glatt, John D. Markley, Jr., William McGrath, Neil Smit, Christopher Temple and Eric Zinterhofer. David C. Merritt was subsequently elected to the board of directors in December 2009. Mr. Smit resigned in February 2010 and Mr. Lovett was appointed to fill that vacancy. Craig Jacobson was elected to the board of directors in July 2010. Messrs. McGrath and Temple resigned as directors in Januaryeffect. On April 26, 2011, and Edgar Lee and Stan Parker were elected to fill those vacancies.
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from the previous year’s package). Each Audit Committee member (including the chair) receives $20,000 per year (reflecting an increase of $5,000 from the previous year’s package), each Compensation and Benefits Committee member (including the chair) receives $15,000 per year (reflecting an increase of $5,000 from the previous year’s package), each Finance Committee member receives $15,000 per year (reflecting an added retainer from the previous year) and each CompensationNominating and BenefitsCorporate Governance Committee member (including the chair) receives $10,000 per yearyear.
Messrs. Glatt and all other committee members receive $7,500 per year.
Directors who are employees do not receive additional compensation for board of directors’ participation. Mr. Lovett, Charter’s former President, CEO and board member, was the only director who was also an employee during 2010. Non-employee directors are not eligible for non-equity incentive compensation within the 2010 Executive Bonus Plan.
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| Fees Earned or Paid in | Stock | |||||||||||
| Cash ($) | Awards ($) | |||||||||||
Name | (1) | (2) | Total ($) | |||||||||
| Robert Cohn | 90,000 | 80,011 | 170,011 | |||||||||
| W. Lance Conn | 100,000 | 80,011 | 180,011 | |||||||||
| Darren Glatt | 80,000 | — | 80,000 | |||||||||
| Craig Jacobson | 40,788 | 28,017 | 68,805 | |||||||||
| Bruce Karsh | 95,000 | 80,011 | 175,011 | |||||||||
| John D. Markley, Jr. | 87,500 | 80,011 | 167,511 | |||||||||
| William McGrath | 87,500 | 80,011 | 167,511 | |||||||||
| David Merritt | 115,000 | 80,011 | 195,011 | |||||||||
| Christopher Temple | 95,000 | 80,011 | 175,011 | |||||||||
| Eric Zinterhofer | 90,000 | 79,985 | 169,985 | |||||||||
Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) (2) | Total ($) | |||||||||
Robert Cohn | 100,220 | 122,256 | 222,476 | |||||||||
W. Lance Conn | 110,220 | 122,256 | 232,476 | |||||||||
Darren Glatt | 89,313 | — | 89,313 | |||||||||
Craig Jacobson | 105,220 | 122,256 | 227,476 | |||||||||
Bruce Karsh | 105,220 | 122,256 | 227,476 | |||||||||
Edgar Lee(3) | 102,104 | 111,728 | 213,832 | |||||||||
John D. Markley, Jr. | 104,866 | 122,256 | 227,122 | |||||||||
William McGrath(3) | 21,875 | — | 21,875 | |||||||||
David Merritt | 135,440 | 122,256 | 257,696 | |||||||||
Stan Parker(3) | 99,604 | — | 99,604 | |||||||||
Christopher Temple(3) | 23,750 | — | 23,750 | |||||||||
Eric Zinterhofer | 100,220 | 122,256 | 222,476 | |||||||||
| (1) | Cash compensation to the directors is paid in advance on a quarterly basis. All directors received the annual retainer for 2011; however, the retainer was pro-rated in the 2nd quarter of |
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to the annual retainer, Mr. Markley received $1,875 for his service during the 1st quarter on the Nominating and Governance Committee and $16,178 for his service during the 2nd, 3rd and 4th quarters on the Audit Committee. For his service on the board during the 1st quarter, Mr. McGrath received | |
| (2) | Amounts attributed to the annual restricted stock grant for all directors vesting one year after the date of grant, with a fair value on the date of grant |
| (3) | Messrs. McGrath and Temple resigned as directors in January 2011 and Messrs. Lee and Parker were elected to fill those vacancies. |
Indemnification
Our Bylaws provide that all directors are entitled to indemnification to the maximum extent permitted by law from and against any claims, damages, liabilities, losses, costs or expenses incurred in connection with or arising out of the performance by them of their duties for us or our subsidiaries.
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CEO Transition.
Our executive officers as of the date hereof, listed below, are elected by the board of directors annually, and each serves until his or her successor is elected and qualified or until his or her earlier resignation or removal.
Executive Officers | Position | ||
Thomas M. Rutledge | President, Chief Executive Officer and Director | ||
Christopher L. Winfrey | Executive Vice President and Chief Financial Officer | ||
Donald F. Detampel | Executive Vice President, Technology and President, Commercial Services | ||
Robert E. Quicksilver | Executive Vice President, | ||
Steven E. Apodaca | |||
James M. Heneghan | |||
Richard R. Dykhouse | Senior Vice President, General Counsel and Corporate Secretary | ||
Kevin D. Howard | Senior Vice President — Finance, Controller and Chief Accounting Officer | ||
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Information regarding our executive officers, other than Mr. LovettRutledge who serves as a director, is set forth below.
Christopher L. Winfrey, 35,36,Executive Vice President and Chief Financial Officer.Mr. Winfrey joined Charter as Executive Vice President and Chief Financial Officer on November 1, 2010. Prior to joining Charter, Mr. Winfrey served as Chief Financial Officer and Managing Director of Unitymedia GmbH from March 2006 through October 2010. Mr. Winfrey was also appointed Managing Director of Unitymedia Management GmbH, Unitymedia Hessen Verwaltung GmbH and Unitymedia NRW GmbH in March 2006 and arena Sport Rechte und Marketing GmbH in April 2008. From December 2002 through December 2005, Mr. Winfrey served as Senior Vice President — Corporate Finance and Development at Cablecom GmbH. Mr. Winfrey was previously Director of Financial Planning and Analysis of NTL’s continental European operations and a Senior Associate in the private equity group at Communications Equity Associates. Mr. Winfrey graduated from the University of Florida, with a B.S. degree in Accounting. He also received his MBA from the University of Florida.
Donald F. Detampel, 55,56,Executive Vice President, Technology and President, Commercial Services. Mr. Detampel joined Charter as Executive Vice President and President, Commercial Services in October 2010 and it has been announced that he will becomewas appointed Executive Vice President, Technology and President, Commercial Services on March 25,in April 2011. Prior to joining Charter, Mr. Detampel served as Senior Vice President, Business Services at Comcast Corporation from March 2010 through August 2010. Prior to that, Mr. Detampel served as an Executive Chairman and Board director of New Global Telecom, Inc. Prior to that,from May 2008 through February 2010. Mr. Detampel served as President and Chief Executive Officer and board director of Raindance Communications, Inc., a publicly traded multimedia conferencing company, from February 2004 through April 2006. Mr. Detampel currently serves on the boards of directors of Masergy Communications,Alpine Access, Inc., and Peer 1 Networks, Inc. and Zayo Group, LLC and also on the advisory board of Advanced Data Centers, Inc. Mr. Detampel received B.S. degrees, magna cum laude, in mathematics and physics, from St. Norbert College.
Gregory L. DoodyRobert E. Quicksilver, 46,57,Executive Vice President Programming and Legal Affairs.Chief Administrative Officer. Mr. Quicksilver joined Charter as Executive Vice President and Chief Administrative Officer on September 6, 2011. Prior to joining Charter, Mr. Quicksilver was a partner with the law firm, Patton Boggs, LLP in Washington, D.C., from November 2010 through September 2011. Prior to that, Mr. Quicksilver was an independent consultant for the internet industry from February 2010 through October 2010. From July 2007 through January 2010, Mr. Quicksilver served as chief content officer of TidalTV, an online video aggregation and advertising optimization platform. Prior to that, Mr. Quicksilver served as an independent consultant to internet companies, including Yahoo! Media Group, from November 2005 to June 2007. From August 1999 to August 2005, Mr. Quicksilver served as President, Network Distribution at FOX Broadcasting Company. Mr. Quicksilver received a B.A. degree, summa cum laude from Dartmouth College and a J.D. degree, magna cum laude, from the University of Michigan Law School.
Steven E. Apodaca, 45,President, Operations. Mr. Apodaca was promoted to his current position in June 2010. Prior to that, he served as Senior Vice President — President, West Operations from December 2008 through June, 2010, Vice President of Operations Support from September 2005 to December 2008, Interim President of the former West Division from Feb 2007 to May 2007 and Interim Senior Vice President — Operations for the former Great Lakes Division from April 2005 to September 2005. Mr. Apodaca joined Charter as Vice President of Marketing for the former Great Lakes Division in 2003. Mr. Apodaca received a B.S. degree in marketing from the University of Northern Colorado and an M.B.A from Colorado State University.
James M. Heneghan, 53, President, Charter Media. Mr. Heneghan was promoted to his current position in July 2010. Prior to his promotion, he served as Senior Vice President of Advertising Sales, Senior Vice President of Marketing and Advertising Sales, Vice President of Charter Media and Vice President of Advertising Sales of the Western Operating Division during his tenure at Charter which began in March 2001. Before joining Charter, Mr. Heneghan was Corporate Director of Advertising Sales for Cable One. Prior to Cable One, he served six years in several capacities with Cable One’s parent company, The Washington Post, in
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newspaper advertising sales. He also worked with the DDB Needham and J. Walter Thompson advertising agencies. Mr. Heneghan earned a Bachelor’s degree in Economics and Political Science from Bucknell University in Lewisburg, Pennsylvania.
Richard R. Dykhouse, 48,Senior Vice President, General Counsel and Corporate Secretary. Mr. DoodyDykhouse was appointedpromoted to his current position on January 4, 2011 having previously served as Executivebeen a Vice President and General Counsel from December 1, 2009. Prior to that, he servedof Charter since 2006 serving most recently as Charter’s Chief Restructuring Officer and Senior Counsel in connection with its Chapter 11 proceedings being appointed on March 25, 2009. Prior to coming to work for Charter, Mr. Doody served as Executive Vice President, Associate General Counsel and Corporate Secretary. Prior to joining Charter, Mr. Dykhouse was Senior Counsel and Assistant Secretary of Calpine Corporationfor CNH Global, N.V. from July2004 to 2006 through August 2008. From Julyand was an attorney for Conseco, Inc. from 1994 to 2003 through July 2006, Mr. Doody held various positions at HealthSouth Corporation, including Executiveserving in the corporate law group with his last position as a Senior Vice President, General Counsel and Secretary.Legal. Mr. Doody served as an executive officer of Charter during the pendency of its Chapter 11 cases in 2009. Mr. Doody earned a J.D. degree from Emory University School of Law andDykhouse received a bachelor’s degree in managementfinance from Tulane University. Mr. Doody is a certified public accountant.
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Kevin D. Howard, 41,42,Senior Vice President — Finance, Controller and Chief Accounting Officer. Mr. Howard was promoted to his position as Senior Vice President — Finance, Controller and Chief Accounting Officer in December 2009. From August 1, 2010 through October 31, 2010, Mr. Howard served as Interim Chief Financial Officer. From April 2006 to December 2009, Mr. Howard served as Vice President, Controller and Chief Accounting Officer. Prior to that, he served as Vice President of Finance from April 2003 until April 2006 and as Director of Financial Reporting since joining Charter in April 2002. Mr. Howard began his career at Arthur Andersen LLP in 1993 where he held a number of positions in the audit division prior to leaving in April 2002. Mr. Howard served as an executive officer of Charter during the pendency of its Chapter 11 cases in 2009. Mr. Howard received a bachelor’s degree in finance and economics from the University of Missouri — Columbia and is a certified public accountant and certified managerial accountant.
Executive Compensation
Compensation Committee Interlocks and Insider Participation
During 2010,2011, no member of Charter’s Compensation and Benefits Committee was an officer or employee of Charter or any of its subsidiaries during 2010.2011. Mr. Zinterhofer served as the non-executive Chairman of the Board in 2010.
During 2010,2011, (1) none of Charter’s executive officers served on the compensation committee of any other company that has an executive officer currently serving on Charter’s board of directors or Compensation and Benefits Committee and (2) none of Charter’s executive officers served as a director of another entity, one of whose executive officers served on the Compensation and Benefits Committee.
Report of the Compensation and Benefits Committee
The following report does not constitute soliciting materials and is not considered filed or incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, unless we specifically state otherwise.
The Compensation and Benefits Committee has reviewed and discussed with management the Compensation Discussion and Analysis (“CD&A”) set forth below including the accompanying tables and recommended to the board of directors that it be included in this proxy statement.
W. LANCE CONN, Chairman
ROBERT COHN
ERIC ZINTERHOFER
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The following discussion and analysis of compensation arrangements of our Named Executive Officers (including our Chief Executive Officer, Chief Financial Officer, and other executive officers appearing in the Summary Compensation Table) should be read together with the compensation tables and related disclosures set forth elsewhere in this proxy statement.
Role of the Compensation and Benefits Committee
The Compensation and Benefits Committee of our board of directors is responsible for overseeing our overall compensation structure, policies and programs and assessing whether our compensation structure results in appropriate compensation levels and incentives for executive management and employees.
Our CEO annually reviews the performance of each of the other Named Executive Officers. He recommends to the Compensation and Benefits Committee salary adjustments, annual cash bonuses and equity incentive compensation applying specific performance metrics that have been approved by the Compensation and Benefits Committee at the beginning of each year for the other Named Executive Officers. The Compensation and Benefits Committee has, on occasion, requested the CEO to be present at Compensation and Benefits Committee meetings where executive compensation and Charter and individual performance are discussed and evaluated. The CEO is invited for the purpose of providing insight or suggestions regarding executive performance objectivesand/or achievements, and the overall competitiveness and effectiveness of our executive compensation program. Although the Compensation and Benefits Committee considers the CEO’s recommendations along with analysis provided by the Compensation and Benefits Committee’s compensation consultants, it retains full discretion to set all compensation for our Named Executive Officers, except that the Compensation and Benefits Committee’s recommendations for the CEO’s compensation goes before Charter’s full board of directors, with non-employee directors voting on the approval of any recommendations, subject to any employment agreements.
The Compensation and Benefits Committee has the discretion to directly engage the services of a compensation consultant(s) or other advisors. Semler Brossy Consulting Group, LLC (“Semler Brossy”) was retained directly by the Compensation and Benefits Committee and has conducted a comprehensive assessment of our annual executive compensation program relative to competitive markets, as well as conducted an analysis on certain retention strategies for our senior management team. In carrying out its assignments, Semler Brossy also interacted with management when necessary and appropriate. Semler Brossy may, in its discretion, seek input and feedback from management regarding its consulting work product prior to presentation to the Compensation and Benefits Committee in order to confirm alignment with our business strategy, and identify data questions or other similar issues, if any. During 2010,2011, Semler Brossy provided no services to the Company other than its advice to the Compensation and Benefits Committee on executive compensation issues.
Compensation Philosophy and Objectives
The Compensation and Benefits Committee believes that attracting and retaining well-qualified executives is a top priority. The Compensation and Benefits Committee’s approach is to compensate executives commensurate with their experience, expertise and performance and to ensure that our compensation programs are competitive with executive pay levels within the cable, telecommunications, and other related industries that define our competitive labor markets. We seek to uphold this philosophy through attainment of the following objectives:
Pay-for-Performance.We seek to ensure that the amount of compensation for each Named Executive Officer is reflective of the executive’s performance and service to us for the time period under consideration. Our primary measures of performance used to gauge appropriate levels of performance-based compensation have included revenue, Adjusted EBITDA, Adjusted EBITDA less capital expenditures, operating cash flow,
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operational improvements, customer satisfaction,and/or such other metrics as the Compensation and Benefits Committee shall determine is then critical to our long-term success at that time. While we believe that our executives are best motivated when they believe that their performance objectives are attainable, we also believe that these metrics should be challenging and represent important improvements over performance in prior years. Compensation payable pursuant to our annual Executive Bonus Plan and our Long-Term Incentive Program is dependent on our performance.
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Retention.We recognize that a key element to our success is our ability to retain a team of highly-qualified executives who can provide the leadership necessary to successfully execute our short- andshort-and long-term business strategies. We also recognize that, because of their qualifications, our senior executives are often presented with other professional opportunities, potentially ones at higher compensation levels. It is often difficult to retain talented management. Our retention strategy faces additional challenges in that the skills of our current management team are attractive to many companies inside and outside of the cable industry and several members of our management team do not have long-standing ties to the St. Louis area where our headquarters isare located. The following programs underscore our focus on retention. First, the Executive Cash Award Plan and Top Talent Retention Plan provided for cash awards to be paid at the end of pre-determined periods, but the Executive Cash Award Plan was modified and cancelled in the first quarter of 2009 and payments to certain recipients under the Top Talent Retention Plan were accelerated and paid out in the first quarter of 2009; all as discussed in detail below. Second, a revised Long-Term Incentive Program was approved in March 2008 and modified in February 2009, and is also discussed below. In addition, the Value Creation Plan was approved by the board of directors in 2009. These plans are described below.
Pay Levels and Competitive Analysis
Pay levels for executives are determined based on a number of factors, including the individual’s roles and responsibilities within Charter, the individual’s experience and expertise, pay levels for peers within Charter, pay levels in the marketplace for similar positions, and performance of the individual and Charter as a whole. In determining these pay levels, the Compensation and Benefits Committee considers all forms of compensation and benefits. When establishing the amounts of such compensation, the Compensation and Benefits Committee considers publicly available information, such as proxy statements, as well as third-party administered benchmark surveys concerning executive compensation levels paid by other competitors and in the industry generally.
With the assistance of Semler Brossy, the Compensation and Benefits Committee approved a peer group of the following 2114 publicly-traded companies for benchmarkingassessing the competitiveness of executive compensation effective for 2010: 2011:
BCE Inc.,
Cablevision Systems Corp.,
CenturyLink Inc., (later merged with Qwest)
Comcast Corporation
The DIRECTV Group, Inc., Dish Network group,
Frontier Communications Corp., Global Crossing Ltd.,
Leap Wireless International Inc., Level 3 Communications, Inc., Mediacom Communications Corp.,
Liberty Global
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MetroPCS Communications Inc.,
Qwest Communications International Inc., Rogers Communications Inc., Shaw Communications Inc., Sirius XM Radio, Inc.,
Telephone and Data Systems Inc.,
TELUS Corp.,
Time Warner Cable Inc., and
Windstream Corp.
Peer group companies selected met the following criteria:
Cable, satellite and telecommunications services industry (based on GICS code);
Telecommunications companies with between one-third and 3 times Charter’s revenue; and
Companies headquartered in the United States Cellular Corp. and Windstream Corp. These companies include companies in cable, telecommunications or other related industries of similar size and business strategy. Canada.
Consistent with our practice, and in light of recent transactions within the peer group, the Compensation and Benefits Committee plans to revisitrevisits peer group composition again when benchmarking pay later this year.
In addition to these specific peer companies, the Compensation and Benefits Committee also reviews data from a number of published compensation surveys that provide broader market data for specific functional responsibilities for companies of similar revenue size to us.
After consideration of the data collected on external competitive levels of compensation and internal relationships within the executive group, the Compensation and Benefits Committee makes decisions regarding individual executives’ target total compensation opportunities based on the need to attract, motivate and retain an experienced and effective management team.
In light of our practice of making a relatively high portion of each executive officer’s compensation based on performance (i.e., at risk), the Compensation and Benefits Committee generally examines peer company data at the 50th percentile (i.e., the median) and the 75th percentile, for performance at target and in excess of target, respectively, or for specialization of a skill set. The Compensation and Benefits Committee generally sets target
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As noted above, notwithstanding our overall pay positioning objectives, pay opportunities for specific individuals vary based on a number of factors such as scope of duties, tenure, experience and expertise, institutional knowledgeand/or difficulty in recruiting a new executive. Actual total compensation in a given year will vary above or below the target compensation levels based primarily on the attainment of operating goals and the preservation of stakeholder value. Based on data provided by our outside advisor, target total direct 2011 compensation (i.e.(i.e. salary, bonus and long-term incentive) for 2010our Named Executive Officers was, on average, betweenbelow median and 75th percentile levels for the Named Executive Officer group, set forth in the Summary Compensation Table below.
Pay Mix
We utilize the particular elements of compensation because we believe that it provides a well-proportioned mix of total opportunity, retention value and at-risk compensation which produces short-term and long-term performance incentives and rewards. By following this portfolio approach, we provide the executive with a measure of stability in the minimum level of compensation the executive is eligible to receive, while motivating the executive to focus on the business metrics and actions that will produce a high level of performance for Charter, as well as reducing the risk of recruitment of top executive talent by competitors.
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For key executives, the mix of compensation is weighted toward at-risk pay (annual incentives and long-term incentives). We believe that maintaining this pay mix results in a fundamentalpay-for-performance orientation for our executives. We also believe that long-term incentives, and particularly equity compensation, provide a very important motivational and retentive aspect to the compensation package of our key executives. All equity awarded as compensation prior to 2009 was cancelled as part of our reorganization plan consummated upon our exit from Chapter 11 bankruptcy. We adopted a new stock incentive plan after emergence from bankruptcy in November 2009 and awards were made to executives under this new plan in December 2009, July 2010 and April and December 2011 as well as awards made to our Named Executive Officers, Messrs. Detampel and Winfrey, in July 2010.
Implementing Our Objectives
The Compensation and Benefits Committee makes compensation decisions after reviewing our performance and carefully evaluating an executive’s performance during the year against pre-established goals, leadership qualities, operational performance, business responsibilities, career with Charter, current compensation arrangements and long-term potential to enhance stakeholder value. Specific factors affecting compensation decisions for the Named Executive Officers include:
| • | Assessment of Company Performance — criteria may include revenue, adjusted EBITDA, free cash flow, adjusted EBITDA less capital expenditures, average revenue per unit, operating cash flow, operational improvements, customer satisfactionand/or such other metrics as the Compensation and Benefits Committee | ||
| • | Assessment of Individual Performance — criteria may include individual leadership abilities, management expertise, productivity and effectiveness. Application of this factor is more specifically discussed under “Elements Used to Achieve Compensation Objectives” as applicable; and | ||
| • | Competitive Analysis and Total Compensation Level Review — |
Elements Used to Achieve Compensation Objectives
The main components of our compensation program include:
| • | Base Salary— fixed pay that takes into account an individual’s role and responsibilities, experience, expertise and individual performance designed to provide a base level of compensation stability on an annual basis; |
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| • |
| ||
| • | Long-Term Incentives— awards historically included stock options, performance units/shares and restricted shares designed to motivate long-term performance and align executive interests with those of our shareholders; and | ||
| • | Special Compensation Programs— cash and equity programs targeted at executives in critical positions designed to incentivize performance and encourage long-term retention. |
Details of Each Compensation Element
Base Salaries are set with regard to the level of the position within Charter and the individual’s current and sustained performance results. The Base Salary levels for executives, and any changes in those salary levels, are
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reviewed each year by the Compensation and Benefits Committee, and such adjustments may be based on factors such as new rolesand/or responsibilities assumed by the executive and the executive’s significant impact on our then current goals. Salary adjustments may also be based on changes in market pay levels for comparable positions in our competitive markets.Base Salaries are reviewed and adjusted with regard to account for: (a) market competitive Base Salary levels andmarket-competitive increases, (b) the employee’sindividual impact on and contributions to the business performance and company goals, (c) salary increases to align certain levels of responsibility; and (d) company-wide total salary increase budgets. On his appointment to the position of President and Chief Executive Officer,increases. During 2011, Mr. LovettWinfrey received a base salary increase of $542,821. During 2010,$25,000 and Mr. HowardApodaca received a base salary increase of $8,000 as part of$60,000 both due to a management-level pay alignment for certain individuals. During his time as Interim Chief Financial Officer,that took into account the relative compensation of officers of similar levels of responsibility within the Company and those of the peer group companies. Mr. Howard received a base salary increase of $144,000 for taking on the additional duties and responsibilities. On his appointment to the position of Executive Vice President — Operations and Chief Technology Officer, Mr. Fawaz received a base salary increase of $163,242. During 2010, Mr. Schremp received base salary increases of $170,000 in the aggregate as part of a management-level pay alignment for certain individuals and for his appointment to the position of Executive Vice President, Operations and Marketing. During 2010, Mr. Doody’s base salary was adjusted to $500,000 from his prior annual base salary of $720,000 upon execution of his employment agreement dated July 27, 2010. On his appointment to the position of Executive Vice President, Programming and Legal Affairs, effective December 19, 2010, Mr. DoodyHeneghan received a base salary increase equal to $50,000.
There is no specific weighting applied to any one factor in setting the level of salary, and the process ultimately relies on the subjective exercise of the Compensation and Benefits Committee’s judgment. Although salaries are generally targeted at market median compared to an industry peer group and other compensation survey data for experienced professionals, the Compensation and Benefits Committee may also take into account historical compensation, potential as a key contributor as well as special recruiting/retention situations in setting salaries for individual executives above or below the market median. Consistent with our pay philosophy, salary increases are not automatic or the same for each individual, taking into consideration the factors set forth above. Based upon data provided by Semler Brossy, Base Salaries for our Named Executive Officers are generally at median competitive levels.
| (2) | |
|
20102011 Executive Bonus Plan
For 2010,2011, bonuses for eligible employees were determined based on Charter’s (or, if applicable, an employee’s particular operating group’s or Key Market Area’s (“KMA”)) performance during 20102011 measured against four Charter performance goals or measures. These measures, and the percentage of an employee’s bonus allocated to each measure, are Charter revenue (20%), Charter adjusted EBITDA for corporate employees or operating cash flow for operating group and KMA employees (30%), Charter adjusted EBITDA less capital expenditures (30%) and Charter Customer ExcellenceExperience Satisfaction Index Plus (“CEI+”CESI”) (20%). Target bonuses for executive officersour Named Executive Officers ranged from 65% to 165% of base salary in 2010,2011, subject to applicable employment agreements (see “Employment Agreements”). The range of potential payouts relative to target range from 10% to 150% of target bonus amounts. (Adjusted EBITDA is defined as consolidated net income (loss) plus net interest expense, income taxes, depreciation and amortization, reorganization items, stock compensation expense, loss on extinguishment of debt and other operating expenses, such as special charges and
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On February 22, 2011,2012, the Compensation and Benefits Committee determined that achievement toward Charter performance goals for 20102011 resulted in bonuses under the 20102011 Executive Bonus Plan at the corporate level in the amountapplicable to our Named Executive Officers of 126.4%91.8% of targeted bonuses, as detailed in the following chart and as set forth in the Non-Equity Incentive Plan column of the Summary Compensation Table.
| Attainment of | Bonus | |||||||||||||||||||||||
| Performance | Pro Forma | Performance | Payout | Matrixes | ||||||||||||||||||||
Bonus Metrics for 2010 | Weight | Goal | Results | Goal | Percentage | Attainments | ||||||||||||||||||
| ($ in millions) | ($ in millions) | |||||||||||||||||||||||
| Revenue | 20 | % | $ | 7007 | $ | 7,003 | 99.9 | % | 98.0 | % | 19.6 | % | ||||||||||||
| Adjusted EBITDA/OCF | 30 | % | $ | 2,540/$2,678 | $ | 2,587/$2,731 | 101.9 | % | 119.0 | % | 35.7 | % | ||||||||||||
| Adjusted EBITDA less Capital Expenditures | 30 | % | $ | 1,334 | $ | 1,384 | 103.7 | % | 137.0 | % | 41.1 | % | ||||||||||||
| CEI+ | 20 | % | 10.0 | 10.53 | 105.3 | % | 150.0 | % | 30.0 | % | ||||||||||||||
Total Corporate Attainment | 126.4 | % | ||||||||||||||||||||||
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Executive Bonus Plan Metrics for Named Executive Officers for 2011
| Weight | Performance Goal | Pro Forma Results | Attainment of Performance Goal | Bonus Matrixes Attainments | ||||||||||||||||
| ($ in millions) | ($ in millions) | |||||||||||||||||||
Revenue | 20 | % | $ | 7,368 | $ | 7,216 | 97.9 | % | 12.8 | % | ||||||||||
Adjusted EBITDA/OCF | 30 | % | $ | 2,709 | $ | 2,681 | 99.0 | % | 24.0 | % | ||||||||||
Adjusted EBITDA less Capital Expenditures | 30 | % | $ | 1,353 | $ | 1,369 | 101.2 | % | 33.6 | % | ||||||||||
CESI | 20 | % | 10.00 | 10.07 | 107.0 | % | 21.4 | % | ||||||||||||
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Total Attainment | 91.8 | % | ||||||||||||||||||
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The Compensation and Benefits Committee has the discretion to increase or decrease payouts under this annual plan based on organizational factors such as acquisitions or significant transactions, performance driven by changes in products or markets and other unusual, unforeseen or exogenous situations.
2011 Charter Media Bonus Plan
As discussed above, all of the Named Executive Officers participate in the Executive Bonus Plan except Mr. Heneghan. As President of Charter Media, Mr. Heneghan participates in the Charter Media Bonus Plan, a plan similar in structure to the Executive Bonus Plan but including Charter Media-specific performance criteria. For 2011, bonuses for eligible Charter Media employees were determined based on Charter’s and Charter Media’s performance during 2011 measured against four performance goals or measures. These measures, and the percentage of an employee’s bonus allocated to each measure, are Charter Media revenue (40%), Charter Media operating cash flow (35%), Charter adjusted EBITDA less capital expenditures (15%) and CESI (10%). Mr. Heneghan’s target bonus was 65% of base salary in 2011. Potential payouts relative to target range from 10% to 150% of target bonus amounts.
On February 22, 2012, the Compensation and Benefits Committee also determined that achievement toward Charter Media performance goals for 2011 resulted in bonuses under the 2011 Charter Media Bonus Plan to applicable Named Executive Officer in the amount of 132.4% of targeted bonuses, as detailed in the following chart and as set forth in the Non-Equity Incentive Plan column of the Summary Compensation Table as to Mr. Heneghan.
Charter Media Bonus Plan Metrics for Named Executive Officers for 2011
| Weight | Performance Goal | Pro Forma Results | Attainment of Performance Goal | Bonus Matrixes Attainments | ||||||||||||||||
| ($ in millions) | ($ in millions) | |||||||||||||||||||
CM Revenue | 40 | % | $ | 275 | $ | 283 | 103.1 | % | 52.4 | % | ||||||||||
CM Operating Cash Flow | 35 | % | $ | 168 | $ | 182 | 108.2 | % | 52.5 | % | ||||||||||
Adjusted EBITDA less Capital Expenditures | 15 | % | $ | 1,353 | $ | 1,369 | 101.2 | % | 16.8 | % | ||||||||||
CESI | 10 | % | 10.00 | 10.07 | 107.0 | % | 10.7 | % | ||||||||||||
|
| |||||||||||||||||||
Total Attainment | 132.4 | % | ||||||||||||||||||
|
| |||||||||||||||||||
The Compensation and Benefits Committee has the discretion to increase or decrease payouts under this annual plan based on organizational factors such as acquisitions or significant transactions, performance driven by changes in products or markets and other unusual, unforeseen or exogenous situations.
Discretionary Bonuses
The CEO is authorized by the Compensation and Benefits Committee to make discretionary bonus awards of up to 5% of the projected payout under the bonus plan. Discretionary bonus awards were recommended by management based upon management’s judgment of a participant’s performance and contribution to the
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Company. Those recommendations from management were reviewed and approved by the CEO and reviewed and approved by the Compensation and Benefits Committee. Discretionary awards were made to the Named Executive Officers as follows: Christopher Winfrey — $40,000; Donald Detampel — $40,000; James Heneghan — $15,000; and Steven Apodaca — $30,000.
| (3) | |
| Long-Term Incentives |
Our long-term incentive award compensation program is designed to recognize scope of responsibilities, reward demonstrated performance and leadership, motivate future superior performance, align the interests of the executive with that of our stakeholders, and incentincentivize and retain the executives through the term of the awards. We believe that performance-based incentives help to drive our performance through their direct linkage to controllable business results while, at the same time, rewarding executives for the value created through share price appreciation. While the size of the award is ultimately left to the Compensation and Benefits Committee discretion, grant levels are generally targeted at the median to top quartile of competitive levels.
The 2001 Stock Incentive Plan, under which grants of equity were made to employees prior to 2009, was terminated upon our emergence from bankruptcy and all outstanding awards were cancelled. The 2009 Stock Incentive Plan provides for the potential grant of non-qualified stock options, stock appreciation rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock and shares of restricted stock as each term is defined in the 2009 Stock Incentive Plan and in the discretion of the Compensation and Benefits Committee. Unless terminated sooner, the 2009 Stock Incentive Plan will terminate on April 28, 2019, and no option or award can be granted thereafter under that plan. Pursuant to our plan of reorganization, upon emergence from bankruptcy, we included an allocation to the 2009 Stock Incentive Plan of a number of shares of new Charter Class A common stock equaling up to approximately 3% of the Class A common stock outstanding and grants of 50% of the amount were to be made to participants within 30 days of emergence from bankruptcy. Immediately upon emergence, the 2009 Stock Incentive Plan included 3,848,393 shares. On December 16, 2009, the board of directors approved the inclusion of another 3,848,393 shares in the 2009 Stock Incentive Plan and made initial grants of awards under the 2009 Stock Incentive Plan.
As of December 31, 2010, 4,817,8182011, 1,478,906 shares remained available for future grants under the plan. As of December 31, 2010,2011, there were 1,2541,175 participants in the 2009 plan. See the Summary“Summary Compensation TableTable” below for the awards received by our Named Executive Officers in 2010.
The 2009 Stock Incentive Plan authorizes the repricing of options, which could include reducing the exercise price per share of any outstanding option, permitting the cancellation, forfeiture or tender of outstanding options in exchange for other awards or for new options with a lower exercise price per share, or repricing or replacing any outstanding options by any other method.
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As noted above, the 2001 Stock Incentive Plan was terminated upon our emergence from bankruptcy and all stock awards prior to 2009, including those to any of the Named Executive Officers, were forfeited. In addition, because of theMr. Lovett’s participation by the Named Executive Officers in the Value Creation Plan, described below, and Messrs. Winfrey and Detampel joining Charter after 2009, none of the Named Executive Officers, except for Mr. Howard,Messrs. Apodaca and Heneghan, received an LTIPa Long Term Incentive Program (“LTIP”) award in 2009.
In 2010, grants of stock options were made to eligible participants in2009, under the LTIP, including the Named Executive Officers, with an exercise price at fair market value and a vesting schedule of 25% on March 1st of each of the 4 years following the year of the grant.
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at the level of attainment of 150.1% of the 2009 cash awards as a result of the achievement of the financial performance measures.measures in 2009. The level of award attainment was based on revenue growth of 4.5% versus a target of 7.0% and adjusted EBITDA less capital expenditures of 22.2% versus a target of 15.4%. One-third of these performance cash awards, along with the restricted cash awards arewere scheduled to vest in each of 2010, 2011 and 2012, respectively. In February 2010,respectively, and since no additional awards have been made, the board of directors also approved the winding down of the performance cash program.program will end. Charter has paid or will pay out one-third of the remaining performance cash award balances (as adjusted in 2010) in each of 2010, 2011 and 2012 to the participants, thus ending this component of the program.
On April 26, 2011, the Board of Directors adopted the 2011-2013 Long Term Incentive Plan (the “Plan”) for certain employees of the Company, including Named Executive Officers. The Plan provides that awards made in 2011 were to cover Plan years 2011-2013 and no additional grants would be made to participants in 2012 or 2013 absent unusual circumstances (e.g., promotion). The amount and type of incentive compensation granted in 2011 was based upon our overall strategic, operational and financial performance and reflects the participant’s expected contributions to our future success. Grants to Named Executive Officers under the Plan were awards of time-vesting stock options, performance-vesting options and restricted stock units as of April 26, 2011, under the Company’s 2009 Stock Incentive Plan, and described as follows:
Time-Vesting Stock Options. Time-vesting stock options involved the grant of options to purchase shares of the Company’s Class A common stock on each vesting date with each one-third of a grant vesting and becoming exercisable in four equal installments on each of the first four anniversaries of each of: April 26, 2011; December 31, 2011; and December 31, 2012.
Performance-Vesting Stock Options. Performance-vesting stock options involved the grant of options to purchase shares of the Company’s Class A common stock in thirds in three tranches commencing on April 26, 2011, December 31, 2011 and December 31, 2012. One-third of each tranche will vest and become exercisable upon the first occurrence of shares of achieving a stock price threshold of $60 per share; one-third at a stock price threshold of $80 per share; and one-third at $100 per share. Achievement of the applicable stock price thresholds will be measured based on the average of the per share closing price of a share of the Company’s Class A common stock as reported on NASDAQ for any sixty consecutive trading days commencing on or after January 26, 2012 (as to Tranche I); on or after September 30, 2012 (as to Tranche II); and on or after September 30, 2013 (as to Tranche III). Grants of performance-vesting options were limited to our president and chief executive officer, and to executive vice president and president-level executives. See the tables below for the amount of the grants to the Named Executive Officers. Total amounts granted were determined by the Compensation and Benefits Committee by examining a multitude of factors. The Committee did evaluate the accounting grant value of the total award and verified that the total value of the grant, when evaluated on an annualized basis, was consistent with the awards at median. More importantly, the Compensation and Benefits Committee evaluated the potential value of the grant at the three price hurdles of $60, $80 and $100 and subjectively determined that the value delivered to each participant was compelling, was sufficiently large to balance the shorter-term focus of the annual incentive plan and would serve to retain the executives during this time period.
Restricted Stock Units. The grant of restricted stock units (“RSUs”) provides that the grantee may receive one share of the Company’s Class A common stock for each RSU following vesting. The grants are subject to a straight vesting schedule of 25% on each of the four anniversaries of the grant date. Messrs. Heneghan and Apodaca received grants of 2,000 and 4,000 RSUs, respectively, in December 2011, related to an analysis of peer company compensation for like functions and to provide further incentives during the CEO transition.
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Timing of Equity Grants
Grants of equity-based awards are determined by the Compensation and Benefits Committee and are typically were made each calendar yearannually following review by the Compensation and Benefits Committee of our prior year’s performance. As noted above, in 2011 the Compensation and Benefits Committee adopted the Plan which granted awards in 2011 with the intent no annual grants will be made in 2012 and 2013. Grants may also be made at other times of the year, such as upon execution of a new employment agreement, based upon an analysis of peer company compensation to maintain a competitive compensation package or in a new hire or promotion situation. Grants of options, if made, have an exercise price equal to the average of the high and low stock price on the date of grant.
| (4) | |
| Retention Programs |
In March 2009, we, after discussion with certain of our bondholders and upon the recommendation of our compensation consultant at the time, Towers Perrin, adopted the Value Creation Plan (the “VCP”) comprised of two components, the Restructuring Value Program (the “RVP”), and the Cash Incentive Program (the “CIP”).
The VCP provided incentives to encourage and reward the thirteen participants in the VCP critical to our restructuring, for the successful conclusion of the process. Participants who continued to be employed by us or our subsidiaries until payment of RVP awards earnearned payments under the RVP upon our emergence from our Chapter 11 restructuring proceeding (the “Proceeding”). The RVP payments were made in December 2009 to the participants. The amounts paid toOf the Named Executive Officers, were as follows:only Mr. Lovett — $2.38 million; Mr. Smit — $6 million; Mr. Howard — $125,000; Ms. Schmitz — $765,000; Mr. Fawaz — $765,000 and Mr. Schremp — $765,000.
The CIP provides annual incentives for participants to achieve specified individual performance goals during each of the three years following our emergence from bankruptcy. Reasonably attainable individual performance goals for each of the first three years following our emergence from bankruptcy were established by the CEO, and approved by the Compensation and Benefits Committee, within thirty days following our emergence from bankruptcy. Participants will earn all or a portion of their target award based on the degree to which these goals
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Other Compensation Elements
The Named Executive Officers participate in all other benefit programs offered to all employees generally.
An independent consultant was engaged to perform a risk assessment of the Company’s compensation programs and did not identify any material risks that might adversely impact the financial health or performance of the Company.
Stockholder Vote on Say on Pay
At the Company’s 2011 Annual Stockholders’ Meeting, the stockholders considered advisory proposals (i) to approve Executive Compensation, and (ii) on the frequency of holding a vote on Executive Compensation. As the board of directors had recommended, the stockholders approved the Executive Compensation and voted to
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hold an advisory vote on Executive Compensation every three years. The Compensation and Benefits Committee agreed with the advisory votes. The next vote on Executive Compensation by the stockholders is scheduled for 2014.
Impact of Tax and Accounting
Section 162(m) of the Internal Revenue Code generally provides that certain kinds of compensation in excess of $1 million in any single year paid to the chief executive officer and the three other most highly compensated executive officers other than the chief financial officer of a public company are not deductible for federal income tax purposes. However, pursuant to regulations issued by the U.S. Treasury Department, certain limited exemptions to Section 162(m) apply with respect to qualified “performance-based compensation.” While the tax effect of any compensation arrangement is one factor to be considered, such effect is evaluated in light of our overall compensation philosophy. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the Compensation and Benefits Committee has not adopted a policy that all compensation must be deductible. Stock options and performance shares granted under our 2009 Stock Incentive Plan are subject to the approval of the Compensation and Benefits Committee. The grants qualify as “performance-based compensation” and, as such, are exempt from the limitation on deductions. Outright grants of restricted stock and certain cash payments (such as base salary and cash bonuses) are not structured to qualify as “performance-based compensation” and are, therefore, subject to the Section 162(m) limitation on deductions and will count against the $1 million cap.
When determining amounts and forms of compensation grants to executives and employees, the Compensation and Benefits Committee considers the accounting cost associated with the grants. We account for stock-based compensation in accordance with accounting standards regarding stock compensation which addresses the accounting for share-based payment transactions in which a company receives employee services in exchange for (a) equity instruments of that company or (b) liabilities that are based on the fair value of the company’s equity instruments or that may be settled by the issuance of such equity instruments. Under this accounting guidance, grants of stock options, restricted stock, performance sharesrestricted stock units, and other share-based payments result in an accounting charge. The accounting charge is equal to the fair value of the instruments being issued on the date of the grant and is amortized over the requisite service period, or vesting period of the instruments. For restricted stock and performance shares,restricted stock units, the cost is equal to the fair value of the stock on the date of grant times the number of shares or units granted. For stock options, the cost is equal to the fair value of the option on the date of the grant, estimated using the Black-Scholes option-pricing model, times the number of options granted. For stock options and restricted stock with market conditions, the cost is equal to the fair value of the option or restricted stock on the date of grant, estimated using Monte Carlo simulations, times the number of stock options or shares of restricted stock granted. The followinggrant date weighted average assumptions were used for grants during the years ended December 31, 2011 and 2010, and 2008, respectively:respectively, were: risk-free interest ratesrate of 2.5% and 3.5%; expected volatility of 47.7% based on historical volatility of a peer group38.4% and 88.1% based on historical volatility;47.7%, and expected lives of 6.36.6 years and 6.3 years, respectively.
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The valuations assume no dividends are paid. Dollar values included in the “Non-Employee Director Compensation Table” and the “Summary Compensation Table” represent the aggregate fair value of all awards granted in 20102011 and prior.
Events Relating to Equity Awards
In early 2009, due in part to the low stock trading price and our restructuring in bankruptcy, we offered employees who participated in the 2001 Stock Incentive Plan the option of forfeiting their grants of restricted stock and performance shares scheduled to vest in 2009. Messrs. Smit,Mr. Lovett Fawaz, Howard and Schremp and Ms. Schmitz forfeited theirhis shares and, therefore, there were no vesting events as to equity for them in 2009. All equity held by our named executive officers for the year 2008 was cancelled in connection with our emergence from bankruptcy. The compensation tables were prepared regarding compensation earned during the fiscal year ending December 31, 2010, 2009, and 2008.
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Summary Compensation Table
The following table sets forth compensation information for our Named Executive Officers that were named as of December 31, 2010, 2009, and 2008 regardingsuch during the compensation to those executive officers listed below for services rendered for the fiscal years ended December 31, 2011, 2010 2009, and 2008. As of December 31, 2010, these officers consist of: Michael J. Lovett, President and Chief Executive Officer; Neil Smit, former President and Chief Executive Officer; Christopher L. Winfrey, Executive Vice President and Chief Financial Officer; Kevin D. Howard, Senior Vice President — Finance, Controller and Chief Accounting Officer who also served the Company as Interim Chief Financial Officer during 2010; Eloise E. Schmitz, former Executive Vice President and Chief Financial Officer; and our three most highly compensated officers — Marwan Fawaz, Executive Vice President, Strategy and Chief Technology Officer; Gregory L. Doody, Executive Vice President, Programming and Legal Affairs and Ted W. Schremp, who previously served in the position of Executive Vice President, Operations and Marketing until his resignation on February 14, 2011.
| Non-Equity | ||||||||||||||||||||||||||||||||
| Stock | Option | Incentive Plan | All Other | |||||||||||||||||||||||||||||
| Name and | Salary | Bonus | Awards | Awards | Compensation | Compensation | Total | |||||||||||||||||||||||||
Principal Position | Year | ($) | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($) | ||||||||||||||||||||||||
| Michael J. Lovett | 2010 | 1,237,367 | 2,210,000 | — | 3,687,250 | 3,709,465 | 68,442 | 10,912,524 | ||||||||||||||||||||||||
| President and Chief | 2009 | 757,178 | — | 5,383,803 | — | 3,821,586 | 38,968 | 10,001,535 | ||||||||||||||||||||||||
| Executive Officer | 2008 | 750,170 | 1,287,433 | 2,081,540 | — | 990,012 | 17,770 | 5,126,925 | ||||||||||||||||||||||||
| Neil Smit | 2010 | 371,301 | — | — | — | 278,014 | 10,131 | 659,446 | ||||||||||||||||||||||||
| former President and | 2009 | 1,500,000 | — | 12,113,592 | — | 10,163,958 | 18,394 | 23,795,944 | ||||||||||||||||||||||||
| Chief Executive Officer | 2008 | 1,343,077 | 3,196,785 | 3,345,315 | — | 2,824,200 | 33,465 | 10,742,842 | ||||||||||||||||||||||||
| Christopher L. Winfrey | 2010 | 70,673 | — | 2,616,000 | 1,408,500 | 66,998 | 17,356 | 4,179,527 | ||||||||||||||||||||||||
| Executive Vice President and | 2009 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Chief Financial Officer | 2008 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Kevin D. Howard | 2010 | 350,046 | — | — | 428,750 | 696,173 | 9,957 | 1,484,926 | ||||||||||||||||||||||||
| Senior Vice President — Finance, Controller and | 2009 | 270,433 | 20,000 | 942,162 | — | 301,863 | 10,408 | 1,544,866 | ||||||||||||||||||||||||
| Chief Accounting Officer | 2008 | 258,221 | 235,701 | 66,159 | — | 109,307 | 8,422 | 677,810 | ||||||||||||||||||||||||
| Eloise E. Schmitz | 2010 | 363,462 | — | — | — | 2,287,067 | 399,355 | 3,049,884 | ||||||||||||||||||||||||
| former Executive Vice President and Chief Financial Officer | 2009 | 525,000 | — | 2,961,106 | — | 1,312,386 | 12,556 | 4,811,048 | ||||||||||||||||||||||||
| 2008 | 475,732 | 446,330 | 440,652 | — | 377,541 | 9,304 | 1,749,559 | |||||||||||||||||||||||||
| Marwan Fawaz | 2010 | 587,214 | — | 368,577 | 1,715,000 | 1,525,958 | 9,989 | 4,206,738 | ||||||||||||||||||||||||
| Executive Vice President, | 2009 | 486,757 | — | 2,691,902 | — | 1,304,362 | 13,061 | 4,496,082 | ||||||||||||||||||||||||
| Strategy and Chief | 2008 | 484,458 | 812,229 | 669,063 | — | 381,862 | 10,570 | 2,358,182 | ||||||||||||||||||||||||
| Technology Officer | ||||||||||||||||||||||||||||||||
| Ted W. Schremp | 2010 | 401,888 | — | 287,793 | 1,029,000 | 891,878 | 9,989 | 2,620,548 | ||||||||||||||||||||||||
| former Executive Vice | 2009 | 379,999 | — | 2,288,113 | — | 1,167,290 | 12,284 | 3,847,686 | ||||||||||||||||||||||||
| President, Operations and Marketing | 2008 | 356,180 | 242,058 | 369,905 | — | 258,362 | 9,300 | 1,235,805 | ||||||||||||||||||||||||
| Gregory L. Doody | 2010 | 632,001 | — | — | 1,029,000 | 599,137 | 3,191 | 2,263,329 | ||||||||||||||||||||||||
| Executive Vice President, | 2009 | 526,154 | 757,615 | 2,691,902 | — | 237,436 | 255,123 | 4,468,230 | ||||||||||||||||||||||||
| Programming and Legal Affairs | 2008 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
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Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | ||||||||||||||||||||||||
Michael J. Lovett Former President and Chief Executive Officer | 2011 | 1,300,000 | — | — | 16,059,501 | 3,142,096 | 36,750 | 20,538,347 | ||||||||||||||||||||||||
| 2010 | 1,237,367 | 2,210,000 | — | 3,687,250 | 3,709,465 | 68,442 | 10,912,524 | |||||||||||||||||||||||||
| 2009 | 757,178 | — | 5,383,803 | — | 3,821,586 | 38,968 | 10,001,535 | |||||||||||||||||||||||||
Christopher L. Winfrey Executive Vice President and Chief Financial Officer | 2011 | 534,616 | 40,000 | — | 6,423,796 | 368,083 | 48,333 | 7,414,828 | ||||||||||||||||||||||||
| 2010 | 70,673 | — | 2,616,000 | 1,408,500 | 66,998 | 17,356 | 4,179,527 | |||||||||||||||||||||||||
Donald F. Detampel, Executive Vice President, Technology and President, Commercial Services | 2011 | 600,001 | 40,000 | — | 6,423,796 | 413,101 | 3,216 | 7,480,114 | ||||||||||||||||||||||||
James M. Heneghan, President, Charter Media | 2011 | 421,400 | 15,000 | 106,320 | 3,232,624 | 529,090 | 13,592 | 4,318,026 | ||||||||||||||||||||||||
Steven E. Apodaca, President, Operations | 2011 | 314,999 | 30,000 | 212,640 | 3,232,624 | 370,613 | 17,935 | 4,178,811 | ||||||||||||||||||||||||
| (1) | Amounts reported in this column include discretionary and retention bonuses received by the Named Executive Officer, if any, for the applicable fiscal years | |
| (2) | Amounts reported in this column reflect the aggregate grant date fair value of restricted stock and | |
| For more information on accounting guidance regarding stock compensation, see “Impact of Tax and Accounting” under Compensation Discussion and Analysis. | ||
| (3) | Amounts reported in this column were calculated in accordance with accounting guidance regarding stock compensation and reflect the aggregate grant date fair value of options granted to each Named Executive Officer during the applicable fiscal |
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| (4) | Amounts reported in this column include RVP payments made under the VCP in 2009 and CIP payments made under the | |
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| (5) | The following table identifies the perquisites and personal benefits received by the Named Executive Officers: |
| Gross-up | Severance | |||||||||||||||||||||||||||||||||||
| Executive | for | (including | ||||||||||||||||||||||||||||||||||
| Personal | Long- | Executive | COBRA | |||||||||||||||||||||||||||||||||
| Use of | 401(k) | Term | Long | for | Tax | |||||||||||||||||||||||||||||||
| Corporate | Matching | Disability | Term | Automobile | Severance | Advisory | ||||||||||||||||||||||||||||||
| Airplane | Contributions | Premiums | Disability | Allowance | Period | Other | Services | |||||||||||||||||||||||||||||
Name | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($)(6) | ($) | |||||||||||||||||||||||||||
| Michael J. Lovett | 2010 | 29,683 | 4,718 | 1,110 | 2,081 | 7,200 | — | 23,650 | — | |||||||||||||||||||||||||||
| 2009 | 19,547 | 8,250 | 1,110 | 2,081 | 7,200 | — | 780 | — | ||||||||||||||||||||||||||||
| 2008 | — | 7,750 | 1,060 | 1,760 | 7,200 | — | — | — | ||||||||||||||||||||||||||||
| Neil Smit | 2010 | 7,515 | — | 171 | 320 | — | — | 2,125 | — | |||||||||||||||||||||||||||
| 2009 | — | 6,808 | 1,110 | 2,081 | — | — | 1,620 | 6,775 | ||||||||||||||||||||||||||||
| 2008 | 3,810 | 3,923 | 1,060 | 1,760 | — | — | 22,552 | 360 | ||||||||||||||||||||||||||||
| Christopher L. Winfrey | 2010 | — | 423 | 85 | 160 | — | — | 16,688 | — | |||||||||||||||||||||||||||
| 2009 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| 2008 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| Kevin D. Howard | 2010 | — | 4,718 | 1,099 | 2,060 | — | — | 2,080 | — | |||||||||||||||||||||||||||
| 2009 | — | 5,976 | 999 | 1,873 | — | — | 1,560 | — | ||||||||||||||||||||||||||||
| 2008 | — | 5,910 | 915 | 1,524 | — | — | 73 | — | ||||||||||||||||||||||||||||
| Eloise E. Schmitz | 2010 | — | — | 683 | 1,280 | — | 390,475 | 6,917 | — | |||||||||||||||||||||||||||
| 2009 | — | 7,745 | 1,110 | 2,081 | — | — | 1,620 | — | ||||||||||||||||||||||||||||
| 2008 | — | 6,484 | 1,060 | 1,760 | — | — | — | — | ||||||||||||||||||||||||||||
| Marwan Fawaz | 2010 | — | 4,718 | 1,110 | 2,081 | — | — | 2,080 | — | |||||||||||||||||||||||||||
| 2009 | — | 8,250 | 1,110 | 2,081 | — | — | 1,620 | — | ||||||||||||||||||||||||||||
| 2008 | — | 7,750 | 1,060 | 1,760 | — | — | — | — | ||||||||||||||||||||||||||||
| Ted W. Schremp | 2010 | — | 4,718 | 1,110 | 2,081 | — | — | 2,080 | — | |||||||||||||||||||||||||||
| 2009 | — | 7,473 | 1,110 | 2,081 | — | — | 1,620 | — | ||||||||||||||||||||||||||||
| 2008 | — | 6,480 | 1,060 | 1,760 | — | — | — | — | ||||||||||||||||||||||||||||
| Gregory L. Doody | 2010 | — | — | 1,110 | 2,081 | — | — | — | — | |||||||||||||||||||||||||||
| 2009 | — | — | 43 | 80 | — | — | 255,000 | — | ||||||||||||||||||||||||||||
| 2008 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Name | Year | Personal Use of Corporate Airplane ($) | 401(k) Matching Contributions ($) | Executive Long- Term Disability Premiums ($) | Gross-up for Executive Long Term Disability ($) | Automobile Allowance ($) | Other ($)(6) | |||||||||||||||||||||
Michael J. Lovett | 2011 | 21,255 | 3,664 | 1,110 | 2,081 | 7,200 | 1,440 | |||||||||||||||||||||
| 2010 | 29,683 | 4,718 | 1,110 | 2,081 | 7,200 | 23,650 | ||||||||||||||||||||||
| 2009 | 19,547 | 8,250 | 1,110 | 2,081 | 7,200 | 780 | ||||||||||||||||||||||
Christopher L. Winfrey | 2011 | — | 3,664 | 1,110 | 2,081 | — | 41,478 | |||||||||||||||||||||
| 2010 | — | 423 | 85 | 160 | — | 16,688 | ||||||||||||||||||||||
Donald F. Detampel | 2011 | — | — | 1,110 | 2,081 | — | 25 | |||||||||||||||||||||
James M. Heneghan | 2011 | — | 3,664 | 1,110 | 2,081 | — | 6,737 | |||||||||||||||||||||
Steven E. Apodaca | 2011 | — | 3,664 | 1,110 | 2,081 | 9,000 | 2,080 | |||||||||||||||||||||
| (6) | This column includes credits generally available to all employees at their election that, if used, decrease the employee’sout-of-pocket costs for participation in the Company’s healthcare insurance program. |
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| All | All | |||||||||||||||||||||||||||||||
| Other | Other | |||||||||||||||||||||||||||||||
| Stock | Option | Grant Date | ||||||||||||||||||||||||||||||
| Awards: | Awards: | Exercise | Fair Value | |||||||||||||||||||||||||||||
| Estimated Future Payouts | Number of | Number of | or Base | of Stock | ||||||||||||||||||||||||||||
| Under Non-Equity Incentive | Shares of | Securities | Price | and | ||||||||||||||||||||||||||||
| Plan Awards(2) | Stock or | Underlying | of Option | Option | ||||||||||||||||||||||||||||
| Grant | Threshold | Target | Maximum | Units | Options | Awards | Awards | |||||||||||||||||||||||||
Name | Date(1) | ($) | ($) | ($) | (#)(3) | (#)(4) | ($)(5) | ($)(6) | ||||||||||||||||||||||||
| Michael J. Lovett | — | 200,671 | 2,006,708 | 3,010,063 | — | — | — | — | ||||||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| 7/27/2010 | — | — | — | — | 215,000 | 35.375 | 3,687,250 | |||||||||||||||||||||||||
| Neil Smit | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Christopher L. Winfrey | — | 5,300 | 53,005 | 79,507 | — | — | — | — | ||||||||||||||||||||||||
| 11/1/2010 | — | — | — | 80,000 | — | — | 2,616,000 | |||||||||||||||||||||||||
| 11/1/2010 | — | — | — | — | 90,000 | 32.700 | 1,408,500 | |||||||||||||||||||||||||
| Kevin D. Howard | — | 24,307 | 243,072 | 364,608 | — | — | — | — | ||||||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| 7/27/2010 | — | — | — | — | 25,000 | 35.375 | 428,750 | |||||||||||||||||||||||||
| Eloise E. Schmitz | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Marwan Fawaz | — | 64,902 | 649,015 | 973,523 | — | — | — | — | ||||||||||||||||||||||||
| 2/23/2010 | — | — | — | 12,410 | — | — | 368,577 | |||||||||||||||||||||||||
| 7/27/2010 | — | — | — | — | 100,000 | 35.375 | 1,715,000 | |||||||||||||||||||||||||
| Ted W. Schremp | — | 30,142 | 301,416 | 452,124 | — | — | — | — | ||||||||||||||||||||||||
| 2/23/2010 | — | — | — | 9,690 | — | — | 287,793 | |||||||||||||||||||||||||
| 7/27/2010 | — | — | — | — | 60,000 | 35.375 | 1,029,000 | |||||||||||||||||||||||||
| Gregory L. Doody | — | 47,400 | 474,000 | 711,001 | — | — | — | — | ||||||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| 7/27/2010 | — | — | — | — | 60,000 | 35.375 | 1,029,000 | |||||||||||||||||||||||||
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($)(5) | Grant Date Fair Value of Stock and Option Awards ($)(6) | ||||||||||||||||||||||||||||
Name | Grant Date(1) | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||||||||||||
Michael J. Lovett | — | 214,500 | 2,145,000 | 3,217,500 | — | — | — | — | ||||||||||||||||||||||||
| 4/26/2011 | — | — | — | — | 645,833 | 55.12 | 16,059,501 | |||||||||||||||||||||||||
Christopher L. Winfrey | — | 40,096 | 400,962 | 601,442 | — | — | — | — | ||||||||||||||||||||||||
| 4/26/2011 | — | — | — | — | 258,333 | 55.12 | 6,423,796 | |||||||||||||||||||||||||
Donald F. Detampel | — | 45,000 | 450,001 | 675,001 | — | — | — | — | ||||||||||||||||||||||||
| 4/26/2011 | — | — | — | — | 258,333 | 55.12 | 6,423,796 | |||||||||||||||||||||||||
James M. Heneghan | — | 27,391 | 273,910 | 410,865 | — | — | — | — | ||||||||||||||||||||||||
| 4/26/2011 | — | — | — | — | 130,000 | 55.12 | 3,232,624 | |||||||||||||||||||||||||
| 12/15/2011 | — | — | — | 2,000 | — | — | 106,320 | |||||||||||||||||||||||||
Steven E. Apodaca | — | 20,475 | 204,750 | 307,124 | — | — | — | — | ||||||||||||||||||||||||
| 4/26/2011 | — | — | — | — | 130,000 | 55.12 | 3,232,624 | |||||||||||||||||||||||||
| 12/15/2011 | — | — | — | 4,000 | — | — | 212,640 | |||||||||||||||||||||||||
| (1) | On | |
| (2) | These columns show the range of payouts under the | |
| (3) | Awards under this column were granted as restricted | |
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| (4) | These option awards were granted as time-vesting and performance-vesting options and are more fully described in the “Outstanding Equity Awards at Fiscal Year-End” table. |
| (5) | The exercise prices of the option awards were determined using the average of high and low stock prices on the date of grant. | |
| (6) | Amounts were calculated in accordance with FASB Topic 718 and represent the aggregate grant date fair value. For more information on FASB Topic 718, see “Impact of Tax and Accounting” under Compensation Discussion and Analysis. |
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The following table provides information concerning unexercised options and unvested restricted stock for each of our Named Executive Officers that remain outstanding as of December 31, 2010.
| Stock Awards | ||||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||
| Equity | Incentive | |||||||||||||||||||||||||||||||
| Incentive | Plan Awards: | |||||||||||||||||||||||||||||||
| Plan Awards: | Market or | |||||||||||||||||||||||||||||||
| Option Awards | Number of | Payout Value | ||||||||||||||||||||||||||||||
| Number of | Market | Unearned | of Unearned | |||||||||||||||||||||||||||||
| Number of | Securities | Number of | Value of | Shares, Units | Shares, | |||||||||||||||||||||||||||
| Securities | Underlying | Shares or | Shares or | or Other | Units or | |||||||||||||||||||||||||||
| Underlying | Unexercised | Option | Units of | Units of Stock | Rights | Other Rights | ||||||||||||||||||||||||||
| Options | Options | Exercise | Option | Stock | That Have | That Have | That Have | |||||||||||||||||||||||||
| Exercisable | Unexercisable | Price | Expiration | That Have Not | Not Vested | Not Vested | Not Vested | |||||||||||||||||||||||||
Name | (#) | (#)(1) | ($) | Date | Vested (#)(2) | ($)(3) | (#)(4) | ($)(4) | ||||||||||||||||||||||||
| Michael J. Lovett | — | 215,000 | 35.375 | 7/27/2020 | 101,821 | 3,964,910 | — | — | ||||||||||||||||||||||||
| Neil Smit | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Christopher L. Winfrey | — | 90,000 | 32.700 | 11/1/2020 | 80,000 | 3,115,200 | — | — | ||||||||||||||||||||||||
| Kevin D. Howard | — | 25,000 | 35.375 | 7/27/2020 | 17,818 | 693,833 | — | — | ||||||||||||||||||||||||
| Eloise E. Schmitz | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Marwan Fawaz | — | 100,000 | 35.375 | 7/27/2020 | 63,320 | 2,465,681 | — | — | ||||||||||||||||||||||||
| Ted W. Schremp | — | 60,000 | 35.375 | 7/27/2020 | 52,964 | 2,062,418 | — | — | ||||||||||||||||||||||||
| Gregory L. Doody | — | 60,000 | 35.375 | 7/27/2020 | 50,910 | 1,982,435 | — | — | ||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($)(6) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#)(7) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested ($) | |||||||||||||||||||||||||||
Michael J. Lovett | 53,750 | 161,250 | (1) | — | 35.375 | 7/27/2020 | — | — | — | — | ||||||||||||||||||||||||||
| — | 193,750 | (2) | — | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | 452,083 | (3) | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 50,911 | (4) | 2,898,872 | — | — | |||||||||||||||||||||||||||
Christopher L. Winfrey | 22,500 | 67,500 | (1) | — | 32.700 | 11/1/2020 | — | — | — | — | ||||||||||||||||||||||||||
| — | 77,500 | (2) | 55.120 | 4/26/2021 | — | — | — | — | ||||||||||||||||||||||||||||
| — | — | 180,833 | (3) | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 53,333 | (4) | 3,036,781 | — | — | |||||||||||||||||||||||||||
Donald F. Detampel | 8,750 | 26,250 | (1) | — | 32.515 | 10/13/2020 | — | — | — | — | ||||||||||||||||||||||||||
| — | 77,500 | (2) | — | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | 180,833 | (3) | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 36,000 | (4) | 2,049,840 | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
James M. Heneghan | 5,000 | 22,500 | (1) | — | 35.375 | 7/27/2020 | — | — | — | — | ||||||||||||||||||||||||||
| — | 39,000 | (2) | — | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | 91,000 | (3) | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 11,455 | (4) | 652,248 | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 2,000 | (5) | 113,880 | — | — | |||||||||||||||||||||||||||
Steven E. Apodaca | 7,500 | 22,500 | (1) | — | 35.375 | 7/27/2020 | — | — | — | — | ||||||||||||||||||||||||||
| — | 39,000 | (2) | — | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | 91,000 | (3) | 55.120 | 4/26/2021 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 10,182 | (4) | 579,763 | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 4,000 | (5) | 227,760 | — | — | |||||||||||||||||||||||||||
| (1) | Amounts shown reflect option awards granted to our named executive officers in the year ended December 31, 2010. These option grants vest in equal installments over a four-year period from the grant dates. Mr. Lovett | |
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| (2) | Amounts shown reflect time-vesting options granted to each of the Named Executive Officers in the year ended December 31, 2011. Grants of time-vesting options to our named executive officers vest with each one-third of the grant vesting and becoming exercisable in four equal installments on each of the first four anniversaries each of: April 26, 2011; December 31, 2011; and, December 31, 2012. Mr. Lovett will have 16,145 time-vesting options vest on April 26, 2012; however the remaining 177,605 of his time-vesting option grant will be cancelled upon Mr. Lovett’s separation from the Company. Messrs. Winfrey and Detampel will each have 6,458 time-vesting options vest on April 26, 2012 and 6,459 time-vesting options vest on April 26th of 2013, 2014 and 2015; 6,458 time-vesting options vest on December 31st of 2012, 2013, 2014 and 2015; 6,458 time-vesting options vest on December 31st of 2013, 2014 and 2015 and 6,459 time-vesting options vest on December 31, 2016. Messrs. Heneghan and Apodaca will each have 3,250 time-vesting options vest on April 26th of 2012, 2013, 2014 and 2015; 3,250 time-vesting options vest on December 31st of 2012, 2013, 2014 and 2015; and 3,250 time-vesting options vest on December 31st of 2013, 2014, 2015 and 2016. |
| (3) | Amounts shown reflect performance-vesting options granted to each of the Named Executive Officers. Grants of performance-vesting options vest subject to achievement of certain stock price vesting thresholds for any sixty consecutive trading days. Achievement of the applicable stock price thresholds (1/3 vesting after achieving the $60 per share stock price threshold; 1/3 vesting after achieving the $80 per share stock price threshold; and 1/3 vesting after achieving the $100 per share stock price threshold) will be measured based on the average of the per share closing price of a share of the Company’s Class A common stock as reported on NASDAQ Global Select for any sixty consecutive trading days commencing on or after January 26, 2012 (for Tranche I with a vesting commencement date of April 26, 2011); on or after September 30, 2012 (for Tranche II with a vesting commencement date of December 31, 2011); and on or after September 30, 2013 (for Tranche III with a vesting commencement date of December 31, 2012). In connection with his separation from the Company, Mr. Lovett will forfeit his original grant of 452,083 performance-vesting options as applicable price thresholds have not been met as of the date of this proxy statement. On or after January 26, 2012, Messrs. Winfrey and Detampel will each have 20,093 options capable of vesting subject to attainment of the $60 per share threshold; and 20,092 options each capable of vesting subject to attainment of the $80 per share threshold and the $100 per share threshold. On or after September 30, 2012, Messrs. Winfrey and Detampel will each have 20,092 options vesting subject to attainment of the $60 per share threshold; and 20,093 options each vesting subject to attainment of the $80 per share threshold and the $100 per share threshold. On or after September 30, 2013, Messrs. Winfrey and Detampel will each have 20,092 options vesting subject to attainment of the $60 per share threshold; and 20,093 options each vesting subject to attainment of the $80 per share threshold and the $100 per share threshold. On or after January 26, 2012, Messrs. Heneghan and Apodaca will each have 10,112 options capable of vesting subject to attainment of the $60 per share threshold; and 10,111 options each capable of vesting subject to attainment of the $80 per share threshold and the $100 per share threshold. On or after September 30, 2012, Messrs. Heneghan and Apodaca will each have 10,111 options each vesting subject to attainment of the $60 per share threshold, the $80 per share threshold and the $100 per share threshold. On or after September 30, 2013, Messrs. Heneghan and Apodaca will each have 10,111 options each vesting subject to attainment of the $60 per share threshold; the $80 per share threshold; and the $100 per share threshold. |
| (4) | Amounts shown reflect restricted stock granted to each of the Named Executive Officers. Restricted stock awards vest in equal installments over a three-year period from the grant dates. Upon his separation from the Company, Mr. Lovett will |
| (5) | Amounts shown reflect restricted stock units granted to Messrs. Heneghan and Apodaca. Grants of |
27
commencement date anniversary. Mr. Heneghan will have 500 restricted stock units vest on each December 15th of 2012, 2013, 2014 and 2015. Mr. Apodaca will have 1,000 restricted stock units vest on each December 15th of 2012, 2013, 2014 and 2015. |
Based on the closing stock price at December | ||
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The following table provides information on option awards exercised and restricted stock awards that vested during 20102011 for each of the Company’s Named Executive Officers.
| Stock Awards(2) | ||||||||||||||||
| Option Awards(1) | Number of Shares | |||||||||||||||
| Number of Shares | Acquired on Vesting | |||||||||||||||
| Acquired on | Value Realized on | or Transfer for | Value Realized on | |||||||||||||
Name | Exercise (#) | Exercise ($) | Value (#) | Vesting ($)(3) | ||||||||||||
| Michael J. Lovett | — | — | 50,911 | 1,714,682 | ||||||||||||
| Neil Smit | — | — | — | — | ||||||||||||
| Christopher L. Winfrey | — | — | — | — | ||||||||||||
| Kevin D. Howard | — | — | 8,910 | 300,089 | ||||||||||||
| Eloise Schmitz | — | — | 28,001 | 943,074 | ||||||||||||
| Marwan Fawaz | — | — | 25,456 | 857,358 | ||||||||||||
| Ted W. Schremp | — | — | 21,637 | 728,734 | ||||||||||||
| Gregory L. Doody | — | — | 25,456 | 857,358 | ||||||||||||
| Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting or Transfer for Value (#) | Value Realized on Vesting ($)(2) | ||||||||||||
Michael J. Lovett(3) | — | — | 50,911 | 2,728,830 | ||||||||||||
Christopher L. Winfrey(4) | — | — | 26,667 | 1,223,749 | ||||||||||||
Donald F. Detampel(5) | — | — | 18,000 | 874,170 | ||||||||||||
James M. Heneghan(6) | 2,500 | 51,563 | 11,455 | 613,988 | ||||||||||||
Steven E. Apodaca(7) | — | — | 10,182 | 545,755 | ||||||||||||
| (1) | Amounts attributed to the difference between the exercise price of the option | |
| (2) | ||
Amount attributed to the average high and low market values of the stock on the day the stock vested. |
| (3) | Mr. Lovett did not exercise any options during 2011. Mr. Lovett had 50,911 restricted shares vest on November 30, 2011 and 21,612 shares were withheld on November 30, 2011 to cover taxes at a market value of $53.60 per share (the average of the low and high trading prices on that day). |
| (4) | Mr. Winfrey did not exercise any options during 2011. Mr. Winfrey had 26,667 restricted shares vest on November 1, 2011 and 9,294 shares were withheld on November 1, 2011 to cover taxes at a market value of $45.89 per share (the average of the low and high trading prices on that day). |
| (5) | Mr. Detampel did not exercise any options during 2011. Mr. Detampel had 18,000 restricted shares vest on October 13, 2011 at a market value of $48.565 (the average of the low and high trading prices on that day). |
| (6) | Mr. Heneghan exercised 2,500 options at an exercise price of $35.375 per option on May 23, 2011 at a market value of $56.00 (the average low and high trading prices on that day). Mr. Heneghan had 11,455 restricted shares vest on November 30, 2011 and 3,583 shares were withheld on November 30, 2011 to cover taxes at a market value of $53.60 per share (the average of the low and high trading prices on that day). |
| (7) | Mr. Apodaca did not exercise any options during 2011. Mr. Apodaca had 10,182 restricted shares vest on November 30, 2011 and 3,165 shares were withheld on November 30, 2011 to cover taxes at a market value of $53.60 per share (the average of the low and high trading prices on that day). |
Retirement Benefits
We sponsor a 401(k) plan, which is a qualified retirement plan offered to all eligible employees, including our Named Executive Officers, that permits eligible employees to elect to defer a portion of their compensation on a pre-tax basis.
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2011 Non-Qualified Deferred Compensation Table
The following table provides information for certain of our named executive officers regarding aggregate individual and company contributions and aggregate earnings and year end account balances as of December 31, 2011 under our non-qualified deferred compensation plan.
Participant Name | Executive Contributions in last fiscal year ($) | Company contributions in last fiscal year ($) | Aggregate Earnings 1(Loss) in last fiscal year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal year end ($) | |||||||||||||||
James M. Heneghan(1)(2) | — | — | ($ | 2,504 | ) | — | $ | 111,498 | ||||||||||||
| (1) | Of the named executive officers, Mr. Heneghan was the only participant in the Company’s Supplemental Deferred Compensation Plan. |
| (2) | For the year ended December 31, 2011, Mr. Heneghan did not make any contributions under the Deferred Compensation Plan and had an aggregate loss for the fiscal year so no earnings are reported as compensation in the summary compensation table. Mr. Heneghan has not been a Named Executive Officer in previous years when he was a participant in the plan. |
As of September 1, 2011, the Company amended and restated its Supplemental Deferred Compensation Plan (the “Plan”). The Plan was originally effective in December 1, 1996 (the “Original Plan”), but was frozen to new participants and to additional contributions on January 1, 2008. The 2011 Non-Qualified Deferred Compensation table above reflects the plan balance for Mr. Heneghan for his participation in the plan prior to when it was frozen. As reflected above, Mr. Heneghan did not contribute to his account during the 2011 plan year. Mr. Heneghan first participated in the program during the 2002 plan year.
The Plan is a non-qualified plan under IRS regulations that allows eligible employees to defer compensation on a pre-tax basis. The eligible employees of the Company, including all Named Executive Officers of the Company, are those whose participation in the Company’s 401(k) plan is limited because of certain discrimination rules imposed by the Code on qualified plans that limit the participation of certain highly compensated employees. An eligible employee may elect to defer up to 25% of his or her base salary or annual bonus into an individual deferred compensation account. Charter does not provide any matching Company contributions. Each Plan account is an unfunded and unsecured obligation of the Company and no tax-deferred rollover of deferred amounts is permitted at the time of employee’s termination. A participant may direct that his or her deferred compensation be allocated, in multiples of one percent, to investments in any or all of funds available from a Company-selected investment fund pool. The Plan offers 14 investment funds from which to direct a participant’s deferred compensation in his or her Plan Account (the “Investment Funds”). During 2011, these 14 Investment Funds provided rates of return ranging from -13.62% to 7.88%. A participant may elect to change his or her allocations and/or fund choices from within the pool of Investment Funds at any time. Amounts deferred are credited with losses or gains based the investment elections.
The timing of the payment of any deferred amounts in the Plan is determined by the participant at the time of the deferral election and may be changed annually within the rules of the Plan. Under the Plan, a participant has the option of choosing payment timing based on separation from the Company or January 1 of a specified year provided that the specified year must be at least two years from the date the compensation deferred would otherwise have been paid. Participants may also elect a lump sum form of payment or installments over a 5, 10 or 15 year period.
Due to Mr. Heneghan’s initial plan participation year of 2002, Mr. Heneghan’s payout of his Plan account remains subject to the provisions of the Original Plan. Under the Original Plan, payouts are allowable only in the event of a termination of his employment with the Company. Mr. Heneghan has elected a five-year installment payment option for his Plan account.
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Employment Agreements
Michael J. Lovett
On October 11, 2011, we announced that Mr. Lovett would be resigning his position as President and Chief Executive Officer following a transition period. On December 19, 2011, we announced that Thomas M. Rutledge would be succeeding Mr. Lovett as President and Chief Executive Officer effective February 13, 2012.
On February 1, 2010, Charter executed an amended and restated employment agreement with Mr. Lovett (as amended, the “Lovett Agreement”). Under the Lovett Agreement, Mr. Lovett iswas to serve as Charter’s President and Chief Executive Officer for a term expiring on January 31, 2013 and to receive a $1,300,000 base salary per year during the term, to be reviewed on an annual basis. Mr. Lovett iswas eligible to receive an annual cash performance-based bonus equal to 165% of his annual base salary earned for that applicable year, as adjusted by the Compensation and Benefits Committee of Charter’s board of directors.
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Neil Smit
Effective November 1, 2010, Charter and Mr. Winfrey entered into an employment agreement (thethat was amended by a Letter Agreement and Amendment effective December 31, 2011 (as amended, the “Winfrey Agreement”). The Winfrey Agreement provides that Mr. Winfrey shall be employed in an executive capacity as Executive Vice President and Chief Financial Officer with such responsibilities, duties and authority as are customary for such role, including, but not limited to, overall management responsibility for Charter’s financial and accounting functions, at a current base salary of $525,000$550,000 per year during the term, to be reviewed on an annual basis. He is eligible to participate in the incentive bonus plan with a target bonus of up to 75% of his annual base salary. He is also eligible to receive such other employee benefits as are generally made available to other senior executives. The Winfrey Agreement has an initial term of two years provided that the term can be extended by the Company for unlimited one-year periods. The Winfrey Agreement also contains a two-year non-compete provision and a two year non-solicitation clause.
Kevin D. HowardDonald F. Detampel
On March 1,October 13, 2010, Charter and Mr. HowardDetampel entered into an amended and restated employment agreement (the “Howardthat was amended by a Letter Agreement dated effective December 31, 2011 (as amended, the “Detampel Agreement”). The HowardDetampel Agreement provides that Mr. Howard shallDetampel be employed in ana current executive capacity as SeniorExecutive Vice President, — Finance, ControllerTechnology and Chief Accounting OfficerPresident, Commercial Services with such responsibilities, duties and authority as are customary for such role, including, but not limited to, overall management responsibility for Charter’s financial reportingthe Company’s services known as Charter Business. On March 15, 2011, Mr. Detampel was appointed to the position of Executive Vice President, Technology and accounting,President, Commercial Services. The Detampel Agreement provides that Mr. Detampel shall be employed at a current base salary of $305,000$600,000 per year, during the term, to be reviewed on an annual basis. Mr. Detampel is eligible to participate in the incentive bonus plan with a target bonus of up to 75% of his annual base salary. He is also eligible to receive such other employee benefits as are generally made available to other senior executives. The Detampel Agreement has an initial term of two years provided that the term can be extended by the Company for unlimited one-year periods. The Detampel Agreement also contains a two-year non-compete provision and a two-year non-solicitation clause.
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James M. Heneghan
On March 1, 2010, Charter and Mr. Heneghan entered into an amended and restated employment agreement (the “Heneghan Agreement”). The Heneghan Agreement provides that Mr. Heneghan shall be employed in a current executive capacity as President, Charter Media with such responsibilities, duties and authority as are customary for such role, including, but not limited to, overall management responsibility for Charter Media, at a current base salary of $424,587 per year to be reviewed on an annual basis. Mr. Heneghan is eligible to participate in the incentive bonus plan with a target bonus of up to 65% of his annual basis salary. He is also eligible to receive such other employee benefits as are generally made available to other senior executives. The Heneghan Agreement has an initial term of two years provided that the term automatically extends for additional one-year periods unless notified of non-renewal by the Company in accordance with the terms of the Heneghan Agreement. The Heneghan Agreement also contains a two-year non-compete provision and a two-year non-solicitation clause.
Steven E. Apodaca
On March 1, 2010, Charter and Mr. Apodaca entered into an amended and restated employment agreement (the “Apodaca Agreement”). The Apodaca Agreement provides that Mr. Apodaca shall be employed in an executive capacity as President, Operations with such responsibilities, duties and authority as are customary for such role, including, but not limited to, overall management responsibility for operations in Charter. The Apodaca Agreement provides that Mr. Apodaca shall be employed at a current base salary of $375,000 per year, to be reviewed on an annual basis. Mr. Apodaca is eligible to participate in the incentive bonus plan with a target bonus of up to 65% of his annual base salary. He is also eligible to receive such other employee benefits as are generally made available to other senior executives. The HowardApodaca Agreement has an initial term of two years provided that the term automatically extends for additional one-year periods unless notified of non-renewal by the Company in accordance with the terms of the Apodaca Agreement. The Apodaca Agreement contains a two-year non-compete provision and a two yeartwo-year non-solicitation clause. During the period of August 1, 2010 through October 31, 2010 when Mr. Howard served as Interim Chief Financial Officer, Mr. Howard’s base annual salary increased to $449,000
Separation and his target bonus increased to 75% of his annual base salary.
Eloise E. SchmitzLovett Separation Agreement
As previously disclosed, we announced on October 11, 2011 that Eloise E. Schmitz, former Executive ViceMr. Lovett would be resigning his position with Charter as President and Chief FinancialExecutive Officer would leavefollowing a transition period. On February 13, 2012, Thomas Rutledge assumed the Companyposition of President and Chief Executive Officer. In accordance with the Lovett Transition Agreement, upon the expiration of the term of her employment agreement on July 31, 2010. Details regarding her separation and severance follow in the section titled “Separation and Related Arrangements.”
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Separation and Related Arrangements
The stock price used in these calculationsthe separation tables that follow is $38.94based on $56.94 per share, the closing price of Charter Class A common stock on the NASDAQ Global Select Market on December 31, 2010.30, 2011. The paragraphs that follow each tableevent describe the termination provisionspayments that are contained in each named executive officer’s
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Salary through date of termination (unless otherwise stated);
Lump sum payment covering COBRA for the period of severance; and
Lump sum payment of accrued and unused vacation.
The sections that follow for each termination event show payments, if any, due to each of the Named Executive Officers, with the exception of Mr. Lovett, upon termination of employment, assuming that the triggering termination event had occurred on December 31, 2011.
As used in these sections:
| • | ||
“Severance”: Named Executive Officers may be eligible for certain payments following the occurrence of specific termination events as set forth in their employment agreements and in the tables that follow. If eligible for severance: Messrs. Winfrey and Detampel will each receive severance equal to two times their applicable annual base salary and target bonus (75% of each officer’s annual base salary) payable over fifty-two (52) equal bi-weekly payroll installments following termination; Messrs. Heneghan and Apodaca will each receive severance equal to one times their applicable annual base salary and target bonus (65% of each officer’s annual base salary) payable over twenty-six (26) equal bi-weekly payroll installments following termination. |
| • | ||
“Bonus” As used in the |
| Termination by | Termination by the | Termination within | ||||||||||||||||||
| Termination by | Charter Without | Executive for | 30 Days Before or 13 | |||||||||||||||||
| Charter for Cause | Cause (Other | Good Reason | Months After | |||||||||||||||||
| or Voluntary | Termination Due to | Than After | (Other Than After | Change in Control | ||||||||||||||||
| Termination by the | Death or Disability | Change-In- | Change-In- | for Without Cause | ||||||||||||||||
| Executive ($) | ($) | Control) ($) | Control) ($) | or Good Reason ($) | ||||||||||||||||
| Severance | — | — | 8,612,500 | 8,612,500 | 8,612,500 | |||||||||||||||
| Bonus(1) | — | 2,006,708 | 2,006,708 | 2,006,708 | 2,006,708 | |||||||||||||||
| CIP Bonus under VCP(2) | — | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | |||||||||||||||
| Stock Options | — | — | 574,856 | 574,856 | 574,856 | |||||||||||||||
| Restricted Stock | — | — | 3,964,910 | 3,964,910 | 3,964,910 | |||||||||||||||
| Retention Bonus(3) | (1,841,667 | ) | — | — | — | — | ||||||||||||||
| Performance Cash | — | — | 172,986 | 172,986 | 345,971 | |||||||||||||||
| Total | $ | (1,841,667 | ) | $ | 4,006,708 | $ | 17,331,960 | $ | 17,331,960 | $ | 17,504,945 | |||||||||
“Stock Options”; “Restricted Stock” and “Restricted Stock Units” include grants made under the |
“Performance Cash” Performance cash is attributable to performance based cash grants made by Charter to executives in prior years. Performance cash has not been granted since 2009 and amounts appearing in the tables below reflect payouts of amounts remaining in a participant’s performance cash bank. Of the |
| • | “Restricted Cash” Restricted cash was a cash-based compensation incentive previously granted by Charter to executives in 2009. Restricted cash was payable in equal one-third installments in the three years following the grant date. Of the Named Executive Officers appearing in the tables below, only Messrs. Heneghan and Apodaca were participants. |
Termination by Charter for cause or a voluntary termination by the Executive without good reason:
Under the current employment agreements with each of the Named Executive Officers, we do not provide any severance payments in the event of a termination by the Company for cause or a voluntary termination by the Named Executive Officers without good reason and all bonus awards and equity and cash vesting events are forfeited and cancelled effective as of the date of termination.
Under the employment agreements with each of our Named Executive Officers, “for cause” includes: breaches of material obligations, fiduciary duties, the Company’s code of conduct or other material Company policies; misappropriation of Company property; criminal convictions, guilty or no contest pleas to felonies, or
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any crime expected to have a negative impact or institution of charges not dismissed within a time certain for crimes related to fraud, embezzlement, dishonesty, breach of trust or moral turpitude; admission or finding of liability for knowing or deliberate breach of any Securities Laws; gross neglect of duty; willful misconduct or recklessness related to duties; illegal possession of a controlled substance; excessive alcohol use in connection with duties or otherwise on the Company’s premises or during a Company function; willful or gross negligent commission of an act or failure to act which causes or is reasonably expected to cause substantial economic injury to the business reputation of the Company. For a definition of “good reason”, see the section titled “Termination by the Executive for Good Reason (other than for a Change in Control)”.
Termination due to Death or Disability Termination EventDisability:
Under the employment agreements with each of our Named Executive Officers, we may be required to make certain payments to these executives or their estates or beneficiaries in the event that Mr. Lovettthe executive is terminated as a result of death or “disability,” Mr. Lovett,“disability”. An executive is deemed to have a “disability” if, due to illness or injury: the executive is unable to perform his estate or beneficiaries shall be entitledher duties without accommodation for a certain period of time; or the executive is considered disabled for the purposes of receiving long term disability benefits under a participating plan or policy. In the event there is a period of time during which a named executive officer is not being paid annual base salary and not receiving long-term disability insurance payments, the executive will receive interim payments equal to receive:
| Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Performance Cash ($)(5) | Restricted Cash (4)(6) | Total ($) | ||||||||||||||||||||||
Christopher L. Winfrey | — | 400,962 | 8,083 | — | — | — | 409,045 | |||||||||||||||||||||
Donald F. Detampel | — | 450,001 | 8,083 | — | — | — | 458,084 | |||||||||||||||||||||
James M. Heneghan | — | 273,910 | 4,068 | 1,326 | — | — | 279,304 | |||||||||||||||||||||
Steven E. Apodaca | — | 204,750 | 4,068 | 2,652 | — | — | 211,470 | |||||||||||||||||||||
| (1) | ||
No severance is payable in the event |
| (2) | The executive or his or her estate or beneficiaries will be entitled to receive a pro-rata bonus for the performance period ending prior to the date of |
| (3) | As to option awards made in the year ended December 31, 2010, unvested stock options are cancelled. As to the time-vesting stock option awards, executives are entitled to a pro-rata portion of the next scheduled vesting amount of any eligible time-vesting options with eligibility being |
| (4) | All unvested restricted stock will be cancelled. Executives who have received restricted stock units will be entitled to a pro-rata portion of the next scheduled vesting amount. |
| (5) | All remaining amounts in an executive’s performance cash bank will be forfeited. |
| (6) | All remaining restricted cash will be forfeited. |
Termination by Charter without cause (other than for a change in control):
In the event that Charter terminates a Named Executive Officer’s employment without cause, Charter will be required to make certain payments to the executive and such a termination will give rise to an altered vesting schedule for certain equity and cash incentive grants. For a definition of a “for cause”, see the previous section titled “Termination by Charter for cause or a voluntary termination by the Executive without good reason”. For a
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definition of a “Change in Control”, see the following section titled “Termination within 30 days before or 13 months after Change in Control for without Cause or Good Reason”.
| Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Performance Cash ($)(5) | Restricted Cash (4)(6) | Total ($) | ||||||||||||||||||||||
Christopher L. Winfrey | 1,925,000 | 400,962 | 99,232 | 1,518,362 | — | — | 3,943,556 | |||||||||||||||||||||
Donald F. Detampel | 2,100,000 | 450,001 | 54,925 | 1,024,920 | — | — | 3,629,846 | |||||||||||||||||||||
James M. Heneghan | 700,569 | 273,910 | 139,661 | 653,574 | 109,766 | 56,667 | 1,934,147 | |||||||||||||||||||||
Steven E. Apodaca | 618,750 | 204,750 | 139,661 | 582,415 | 111,820 | 70,833 | 1,728,229 | |||||||||||||||||||||
| (1) | A without cause termination will require severance payments |
| (2) | All named executive officers will | |
| (3) | As to option awards made in the year ended December 31, 2010, the executive will receive a pro-rata portion of the next scheduled vesting amount. As to time-vesting option and performance-vesting option awards, executives are entitled to a pro-rata portion of the next scheduled vesting amount of any eligible options with eligibility being determined as to whether the vesting commencement date of a particular tranche has occurred as of the date of termination. While a portion of the first tranche performance vesting options may remain eligible to vest for six months following a December 31, 2011 termination event, no such options would be deemed vested until the occurrence of the stock price threshold as of the applicable measurement date. The Company believes that it would be difficult to assume that the threshold was met in order to assign a price as of December 31, 2011 to any options that may have been eligible for vesting as of that date. As a result, no such amount has been included in the above table. |
| (4) | For restricted stock awards, executives are entitled to receive any unvested restricted stock that is scheduled to vest for the one year period following the date of termination. As to restricted stock unit awards, executives are entitled to a pro-rata portion of the next scheduled vesting amount for a without cause termination. |
| (5) | Any portion of the Performance Cash bank which is scheduled to be paid in the next six months following the date of termination will be paid to any executive that was a participant in the performance cash program on the next regularly scheduled payment date following the date of termination with the remainder of the performance cash bank forfeited. |
| (6) | Recipients of Restricted Cash grants will receive vesting of all |
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As used in the employment agreements of our Named Executive Officers, “good reason” includes: a material reduction in base salary, bonus, authority, duties, or responsibilities of the executive or of the executive’s reporting structure; a material failure by the Company to comply with provisions of the executive’s employment agreement including paying compensation when due and the location of the executive’s primary
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workplace; if within six months following a Change in Control, the executive has not received an offer of employment from the surviving company for their exact position; or any failure by a successor Company to assume the executive’s employment agreement following a Change in Control. For a definition of “Change in Control”, see the following section titled “Termination within 30 days before or 13 months after Change in Control for without Cause or Good Reason”.
| Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Performance Cash ($)(5) | Restricted Cash (4)(6) | Total ($) | ||||||||||||||||||||||
Christopher L. Winfrey | 1,925,000 | 400,962 | 8,083 | — | — | — | 2,334,045 | |||||||||||||||||||||
Donald F. Detampel | 2,100,000 | 450,001 | 8,083 | — | — | — | 2,558,084 | |||||||||||||||||||||
James M. Heneghan | 700,569 | 273,910 | 4,068 | 1,326 | 109,766 | 56,667 | 1,146,306 | |||||||||||||||||||||
Steven E. Apodaca | 618,750 | 204,750 | 4,068 | 2,652 | 111,820 | 70,833 | 1,012,873 | |||||||||||||||||||||
| (1) | A good reason termination by our Named Executive Officers will require severance payments to be made by the Company. |
| (2) | ||
All Named Executive Officers will be entitled to a | ||
| (3) | As to option awards made in the year ended December 31, 2010, unvested stock options are cancelled. As to time-vesting options and performance-vesting options, executives that terminate their employment with the Company for good reason are entitled to a pro-rata portion of the next scheduled vesting amount of any eligible options with eligibility being determined as to whether the vesting commencement date of a particular tranche has occurred as of the date of termination. While a portion of the first tranche performance vesting options may remain eligible to vest for six months following a December 31, 2011 termination event, no such options would be deemed vested until the occurrence of the stock price threshold as of the applicable measurement date. The Company believes that it would be difficult to assume that the threshold was met in order to assign a price as of December 31, 2011 to any options that may have been eligible for vesting as of that date. As a result, no such amount has been included in the above table. |
| (4) | For restricted stock awards, all | |
| (5) | Any portion of the Performance Cash Bank which is scheduled to be paid in the next six months following the date of termination will be paid to any executive that was a participant in the performance cash program on the next regularly scheduled payment date following the date of termination with the remainder of the performance cash bank forfeited. |
| (6) | Recipients of Restricted Cash grants will receive vesting of all unvested restricted cash for a twelve-month period following a good reason termination event. |
Termination within 30 days before or 13 months after Change in Control Termination Eventfor without Cause or Good Reason:
Under our employment agreements with each of the Named Executive Officers, we may be required to make payments to the executives in the event that, within 30 days before, or 13 months following, the occurrence of a Change in Control, Charter or any of its subsidiaries, terminate histhe executive’s employment without “cause”cause or he or she terminates his or her employment with Charter and its subsidiaries for “good reason,” Mr. Lovett will receive:
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transactions including a reorganization or merger subject to certain exceptions; the complete liquidation or dissolution of the Company; and the sale or disposition of all or substantially all of the assets of the Company.
| Severance ($)(1) | Bonus ($)(2) | Stock Options ($)(3) | Restricted Stock and Restricted Stock Units ($)(4) | Performance Cash ($)(5) | Restricted Cash (4)(6) | Total ($) | ||||||||||||||||||||||
Christopher L. Winfrey | 1,925,000 | 400,962 | 1,730,234 | 3,036,781 | — | — | 7,092,977 | |||||||||||||||||||||
Donald F. Detampel | 2,100,000 | 450,001 | 735,190 | 2,049,840 | — | — | 5,335,031 | |||||||||||||||||||||
James M. Heneghan | 700,569 | 273,910 | 532,533 | 766,128 | 109,766 | 56,667 | 2,439,573 | |||||||||||||||||||||
Steven E. Apodaca | 618,750 | 204,750 | 532,533 | 807,523 | 111,820 | 70,833 | 2,346,209 | |||||||||||||||||||||
| (1) | A Change of Control termination event will require severance payments to be made by the Company to the Named Executive Officer. |
| (2) | ||
All Named Executive Officers will be entitled to a | ||
| (3) | As to option awards made in the year ended December 31, 2010, the executive will receive full vesting of all |
| (4) | For restricted stock and restricted stock unit awards, executives are entitled to receive full vesting of any unvested restricted stock and |
| (5) | An executive that participated in | |
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| Termination by | ||||||||||||||||||||
| Charter for | Termination by | Termination by the | Termination Within | |||||||||||||||||
| Cause or | Charter Without | Executive for | 30 days before or 13 | |||||||||||||||||
| Voluntary | Cause (Other | Good Reason | Months After | |||||||||||||||||
| Termination by the | Termination Due to | Than After | (Other Than After | Change in Control | ||||||||||||||||
| Executive | Death or Disability | Change-In- | Change-In- | for Without Cause | ||||||||||||||||
| ($) | ($) | Control) ($) | Control) ($) | or Good Reason ($) | ||||||||||||||||
| Severance | — | — | 1,837,500 | 1,837,500 | 1,837,500 | |||||||||||||||
| Bonus(1) | — | 53,005 | 53,005 | 53,005 | 53,005 | |||||||||||||||
| Stock Options | — | — | 23,464 | — | 561,600 | |||||||||||||||
| Restricted Stock | — | — | 1,038,413 | — | 3,115,200 | |||||||||||||||
| Total | — | $ | 53,005 | $ | 2,952,382 | $ | 1,890,505 | $ | 5,567,305 | |||||||||||
| (6) | ||
For Restricted Cash grants, participants will receive | ||
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| Termination | ||||||||||||||||||||
| Termination by | within 30 days | |||||||||||||||||||
| Termination by | Termination by | the Executive | before or 13 | |||||||||||||||||
| Charter for | Charter without | for Good | months after | |||||||||||||||||
| Cause or | Cause (other | Reason (other | Change in | |||||||||||||||||
| Voluntary | Termination | than after | than after | Control for | ||||||||||||||||
| Termination by | due to Death | Change-In- | Change-In- | without Cause or | ||||||||||||||||
| the Executive | or Disability | Control) | Control) | Good Reason | ||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
| Severance | — | — | 503,250 | 503,250 | 503,250 | |||||||||||||||
| Bonus(1) | — | 243,072 | 243,072 | 243,072 | 243,072 | |||||||||||||||
| CIP Bonus under VCP(2) | — | 700,000 | 700,000 | 700,000 | 700,000 | |||||||||||||||
| Stock Options | — | — | 22,281 | 22,281 | 22,281 | |||||||||||||||
| Restricted Stock | — | — | 346,916 | 346,916 | 346,916 | |||||||||||||||
| Performance Cash | — | — | 25,563 | 25,563 | 51,125 | |||||||||||||||
| Restricted Cash | — | — | 13,366 | 13,366 | 26,733 | |||||||||||||||
| TOTAL | — | $ | 943,072 | $ | 1,854,448 | $ | 1,854,448 | $ | 1,893,377 | |||||||||||
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| Termination | ||||||||||||||||||||
| Termination by | within 30 days | |||||||||||||||||||
| Termination by | Termination by | the Executive | before or 13 | |||||||||||||||||
| Charter for | Charter without | for Good | months after | |||||||||||||||||
| Cause or | Cause (other | Reason (other | Change in | |||||||||||||||||
| Voluntary | Termination | than after | than after | Control for | ||||||||||||||||
| Termination by | due to Death or | Change-In- | Change-In- | without Cause or | ||||||||||||||||
| the Executive | Disability | Control) | Control) | Good Reason | ||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
| Severance | — | — | 1,925,000 | 1,925,000 | 1,925,000 | |||||||||||||||
| Bonus(1) | — | 474,000 | 474,000 | 474,000 | 474,000 | |||||||||||||||
| Stock Options | — | — | 38,936 | — | 213,900 | |||||||||||||||
| Restricted Stock | — | — | 991,218 | — | 1,982,435 | |||||||||||||||
| TOTAL | — | $ | 474,000 | $ | 3,429,154 | $ | 2,399,000 | $ | 4,595,335 | |||||||||||
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Our Certificate of Incorporation limits the liability of directors to the maximum extent permitted by Delaware law. The Delaware General Corporation Law provides that a corporation may eliminate or limit the personal liability of a director for monetary damages for breach of fiduciary duty as a director, except for liability for:
| (1) | any breach of the director’s duty of loyalty to the corporation and its shareholders; |
| (2) | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
| (3) | unlawful payments of dividends or unlawful stock purchases or redemptions; or |
| (4) | any transaction from which the director derived an improper personal benefit. |
Our Bylaws provide that we will indemnify all persons whom we may indemnify pursuant thereto to the fullest extent permitted by law.
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The following table sets forth information as of January 31, 2011February 29, 2012 regarding the beneficial ownership of Charter’s Class A common stock by:
each holder of more than 5% of our outstanding shares of common stock;
each of our directors and named executive officers; and
all of our directors and executive officers as a group.
Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Common stock subject to options that are currently exercisable or exercisable within 60 days of January 31, 2011February 29, 2012 are deemed to be outstanding and beneficially owned by the person holding the options. These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Percentage of beneficial ownership is based on 114,566,527100,512,899 shares of Class A common stock outstanding as of January 31, 2011.February 29, 2012. Except as disclosed in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the stockholder. Unless otherwise indicated in the table or footnotes below, the address for each beneficial owner is 12405 Powerscourt Drive, St. Louis, Missouri 63131.
| Shares Beneficially Owned(1) | ||||||||
Name | Number | Percent of Class | ||||||
5% Stockholders: | ||||||||
| AP Charter Holdings, L.P. and certain affiliated funds(2) | 35,691,033 | 30.90 | % | |||||
| Oaktree Opportunities Investments, L.P. and certain affiliated funds(3) | 20,156,185 | 17.53 | % | |||||
| Funds advised by Franklin Advisers, Inc.(4) | 19,363,966 | 16.53 | % | |||||
| Funds affiliated with Encore LLC(5) | 11,203,955 | 9.78 | % | |||||
| Paul G. Allen(6) | 8,654,722 | 7.23 | % | |||||
Executive Officers and Directors: | ||||||||
| Robert Cohn | 2,536 | * | ||||||
| W. Lance Conn | 2,536 | * | ||||||
| Darren Glatt(7) | 35,691,033 | 30.90 | % | |||||
| Craig Jacobson | 5,292 | * | ||||||
| Bruce A. Karsh(8) | 20,156,185 | 17.53 | % | |||||
| Edgar Lee(9) | 20,156,185 | 17.53 | % | |||||
| John D. Markley, Jr. | 2,536 | * | ||||||
| David C. Merritt | 2,536 | * | ||||||
| Stanley Parker(10) | 35,691,033 | 30.90 | % | |||||
| Eric L. Zinterhofer | 2,116 | * | ||||||
| Michael J. Lovett(11) | 184,870 | * | ||||||
| Christopher L. Winfrey(12) | 110,000 | * | ||||||
| Kevin D. Howard(13) | 30,086 | * | ||||||
| Marwan Fawaz(14) | 105,464 | * | ||||||
| Ted W. Schremp(15) | 82,579 | * | ||||||
| Gregory L. Doody(16) | 82,711 | * | ||||||
All executive officers and directors as a group (18 persons)(17) | 56,537,848 | 48.72 | % | |||||
| Shares Beneficially Owned(1) | ||||||||
Name | Number | Percent of Class | ||||||
5% Stockholders: | ||||||||
AP Charter Holdings, L.P. and certain affiliated funds(2) | 33,541,033 | 33.06 | % | |||||
Oaktree Opportunities Investments, L.P. and certain affiliated funds(3) | 17,164,899 | 17.00 | % | |||||
Funds affiliated with Encore LLC(4) | 11,203,955 | 11.15 | % | |||||
Paul G. Allen(5) | 6,847,990 | 6.49 | % | |||||
Funds advised by Franklin Advisers, Inc.(6) | 5,927,032 | 5.75 | % | |||||
Directors and Executive Officers: | ||||||||
Robert Cohn | 4,754 | * | ||||||
W. Lance Conn | 4,754 | * | ||||||
Darren Glatt(7) | 33,541,033 | 33.06 | % | |||||
Craig Jacobson | 12,010 | * | ||||||
Bruce A. Karsh(8) | 17,167,117 | 17.01 | % | |||||
Edgar Lee(9) | 17,166,926 | 17.01 | % | |||||
John D. Markley, Jr. | 29,654 | * | ||||||
David C. Merritt | 4,754 | * | ||||||
Stanley Parker(10) | 33,541,033 | 33.06 | % | |||||
Eric L. Zinterhofer | 4,334 | * | ||||||
Michael J. Lovett(11) | 233,153 | * | ||||||
Christopher L. Winfrey(12) | 132,164 | * | ||||||
Donald F. Detampel(13) | 76,458 | * | ||||||
James M. Heneghan(14) | 41,332 | * | ||||||
Steven E. Apodaca(15) | 45,631 | * | ||||||
All executive officers and directors as a group (18 persons)(16) | 51,740,976 | 50.75 | % | |||||
| * | less than 1% |
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| (1) | Shares shown in the table above include shares held in the beneficial owner’s name or jointly with others, or in the name of a bank, nominee or trustee for the beneficial owner’s account. The calculation of this percentage assumes for each person the acquisition by such person of all shares that may be acquired upon exercise of warrants to purchase shares of Class A common stock. | |
| (2) | Based on the most recently available Schedule | |
37AP Charter Holdings, L.P. (“AP Charter”) is the sole member and manager of AP Charter Sub. Advisors VI and Advisors VII serve as the general partners of AP Charter. Apollo Capital Management VI, LLC (“ACM VI”) serves as the general partner of Advisors VI, and Apollo Capital Management VII, LLC (“ACM VII”) serves as the general partner of Advisors VII. Apollo Principal Holdings I, L.P. (“Principal I”) is the sole member and manager of each of ACM VI and ACM VII. Apollo Principal Holdings I GP, LLC (“Principal I GP”) serves as the general partner of Principal I. Red Bird GP, Ltd. (“Red Bird GP”) is the general partner of Red Bird, Blue Bird GP, Ltd. (“Blue Bird GP”) is the general partner of Blue Bird, and Green Bird GP, Ltd. (“Green Bird GP”) is the general partner of Green Bird. AAA Guarantor — Co-Invest VI, L.P. (“AAA Guarantor VI”) is the sole shareholder of AAA VI, and AAA Guarantor — Co-Invest VII, L.P. (“AAA Guarantor VII”) is the sole shareholder of AAA VII. Apollo SVF Management, L.P. (“SVF Management”) is the director of each of Red Bird GP and Blue Bird GP. SVF Management also serves as the investment manager for the Permal Fund, and as such has the authority to make investment decisions on behalf of, and vote securities held by, Permal Fund. Apollo Value Management, L.P. (“Value Management”) is the director of Green Bird GP. The general partner of SVF Management is Apollo SVF Management GP, LLC (“SVF Management GP”), and the general partner of Value Management is Apollo Value Management GP, LLC (“Value Management GP”). Apollo Capital Management, L.P. (“Capital Management”) is the sole member and manager of each of SVF Management GP and Value Management GP. The general partner of Capital Management is Apollo Capital Management GP, LLC (“Capital Management GP”). The sole shareholder of Red Bird GP is Apollo SOMA Advisors, L.P. (“SOMA Advisors”), the sole shareholder of Blue Bird GP is Apollo SVF Advisors, L.P. (“SVF Advisors”), and the sole shareholder of Green Bird GP is Apollo Value Advisors, L.P. (“Value Advisors”). The general partner of SOMA Advisors is Apollo SOMA Capital Management, LLC (“SOMA Capital Management”), the general partner of SVF Advisors is Apollo SVF Capital Management, LLC (“SVF Capital Management”), and the general partner of Value Advisors is Apollo Value Capital Management, LLC (“Value Capital Management”). Apollo Principal Holdings II, L.P. (“Principal II”) is the sole member and manager of each of SOMA Capital Management, SVF Capital Management and Value Capital Management. Apollo Principal Holdings II GP, LLC (“Principal Holdings GP”) is the general partner of Principal II. AAA MIP Limited (“AAA MIP”) is the general partner of each of AAA Guarantor VI and AAA Guarantor VII. Apollo Alternative Assets, L.P. (“Alternative Assets”) provides management services to AAA MIP. Apollo International Management, L.P. (“Intl Management”) is the managing general partner of Alternative Assets, and Apollo International Management GP, LLC (“International GP”) is the general partner of Intl Management. Apollo Management Holdings, L.P. (“Management Holdings”) is the sole member and manager of each of Capital Management GP and International GP, and Apollo Management Holdings GP, LLC (“Management Holdings GP”) is the general partner of Management Holdings. Leon Black,
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Joshua Harris and Marc Rowan are the managers of Principal I GP and Principal II GP, and the managers as well as principal executive officers of Management Holdings GP. Neither AP Charter Sub or AP Charter has any voting or dispositive power over the shares of Common Stock held of record by any of Red Bird, Blue Bird, Green Bird, AAA VI, AAA VII or Permal Fund, respectively, and none of Red Bird, Blue Bird, Green Bird, AAA VI, AAA VII or Permal Fund have any voting or dispositive power over the shares of Common Stock held of record by AP Charter Sub.
AP Charter Sub disclaims beneficial ownership of any shares of the Common Stock held of record by any of Red Bird, Blue Bird, Green Bird, AAA VI, AAA VII or Permal Fund, respectively, except to the extent of any pecuniary interest therein. AP Charter disclaims beneficial ownership of any shares of the Common Stock held of record by AP Charter Sub, and any shares of the Common Stock held of record by any of Red Bird, Blue Bird, Green Bird, AAA VI, AAA VII or Permal Fund, except to the extent of any pecuniary interest therein. Red Bird, Blue Bird, Green Bird, AAA VI and AAA VII each disclaim beneficial ownership of any shares of the Common Stock held of record by one another or by AP Charter Sub or Permal Fund, except to the extent of any pecuniary interest therein.
The principal address for AP Charter Sub, AP Charter, Advisors VI, ACM VI, Advisors VII, ACM VII, Principal I, Principal I GP, SOMA Advisors, SOMA Capital Management, SVF Advisors, SVF Capital Management, Value Advisors, Value Capital Management, Principal II, Principal II GP and Alternative Assets is One Manhattanville Road, Suite 201, Purchase, New York 10577.
The principal address for Red Bird, Red Bird GP, Blue Bird, Blue Bird GP, Green Bird, Green Bird GP, AAA VI and AAA VII is Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9005, Cayman Islands.
The principal address for AAA Guarantor VI, AAA Guarantor VII and AAA MIP is Trafalgar Court, Les Banques, GY1 3QL, St. Peter Port, Guernsey, Channel Islands.
The principal address for SVF Management, SVF Management GP, Value Management, Value Management GP, Capital Management, Capital Management GP, Intl Management, International GP, Management Holdings, Management Holdings GP, and Messrs. Black, Harris and Rowan, is 9 W. 57th Street, 43rd Floor, New York, NY 10019.
| (3) | Based on the most recently available Schedule |
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| Oaktree Holdings, LLC is Oaktree Capital |
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Group, LLC. The holder of a majority of the voting units of Oaktree Capital Group, LLC is Oaktree Capital Group Holdings, L.P. The general partner of Oaktree Capital Group Holdings, L.P. is Oaktree Capital Group Holdings GP, LLC. | |
| (4) | Based on the most recently available Schedule 13G dated December 31, 2010 and filed with the SEC on February 10, 2011, the number of shares reported includes: 3,403,023 shares directly owned by Encore, LLC and 7,800,932 shares directly owned by Encore II, LLC. Each of Crestview Partners GP, L.P., Crestview Partners, L.P., Crestview Partners (PF), L.P., Crestview Holdings (TE), L.P., Encore (ERISA), Ltd., Crestview Partners (ERISA), L.P. and Crestview Offshore Holdings (Cayman), L.P. may be deemed to have beneficial ownership of the 3,403,023 shares of Class A common stock owned directly by Encore, LLC. Crestview Partners, L.P., Crestview Partners (PF), L.P., Crestview Holdings (TE), L.P., Encore (ERISA), Ltd. and Crestview Offshore Holdings (Cayman), L.P. are the members of Encore, LLC. Crestview Partners (ERISA), L.P. is the sole shareholder of Encore (ERISA), Ltd. Crestview Partners GP, L.P. is the general partner of Crestview Partners, L.P., Crestview Partners (PF), L.P., Crestview Holdings (TE), L.P., Crestview Partners (ERISA), L.P. and Crestview Offshore Holdings (Cayman), L.P. |
Each of Crestview Partners II GP, L.P., Crestview Partners II, L.P., Crestview Partners II (FF), L.P., Crestview Partners II (TE), L.P., Crestview Offshore Holdings II (Cayman), L.P., Crestview Offshore Holdings II (FF Cayman), L.P. and Crestview Offshore Holdings II (892 Cayman), L.P. may deemed to have beneficial ownership of the 7,800,932 shares of Class A common stock owned directly by Encore II, LLC. Crestview Partners II GP, L.P. is the general partner of Crestview Partners II, L.P., Crestview Partners II (FF), L.P., Crestview Partners II (TE), L.P., Crestview Offshore Holdings II (Cayman), L.P., Crestview Offshore Holdings II (FF Cayman), L.P. and Crestview Offshore Holdings II (892 Cayman), L.P., each of which is a member of Encore II, LLC.
The business address for Encore, LLC, Crestview Partners GP, L.P., Crestview Partners, L.P., Crestview Partners (PF), L.P., Crestview Holdings (TE), L.P., Encore (ERISA), Ltd., Crestview Partners (ERISA), L.P., Crestview Offshore Holdings (Cayman), L.P., Encore II, LLC, Crestview Partners II GP, L.P., Crestview Partners II, L.P., Crestview Partners II (FF), L.P., Crestview Partners II (TE), L.P., Crestview Offshore Holdings II (Cayman), L.P., Crestview Offshore Holdings II (FF Cayman), L.P. and Crestview Offshore Holdings II (892 Cayman), L.P. is c/o Crestview Partners, 667 Madison Avenue, 10th Floor, New York, New York 10065.
| (5) | Based on the most recently available Schedule 13G/A dated December 31, 2011 and filed with the SEC on February 10, 2012, the number of shares reported includes |
| (6) | Based on the most recently available Schedule 13G/A dated December 31, 2011 and filed with the SEC on January 1, 2012, includes 3,363,046 shares of Class A common stock and warrants exercisable for |
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entities described in this footnote is One Franklin Parkway, San Mateo, California 94403. These securities are beneficially owned by one or more open- or closed-end investment companies or other managed accounts that are clients of investment managers that are direct and indirect subsidiaries of Franklin Resources, Inc. Investment management contracts grant to those subsidiaries all investment and/or voting power over such securities, except as otherwise disclosed below. Therefore, such subsidiaries may be deemed to be the beneficial owners of such securities. Beneficial ownership by such subsidiaries and other affiliates of Franklin Resources, Inc. is reported in conformity with the guidelines articulated by the SEC staff in ReleaseNo. 34-39538 (January 12, 1998) relating to organizations, such as Franklin Resources, Inc. where related entities exercise voting and investment powers over securities independently from each other. The voting and investment powers held by Franklin Mutual Advisers, LLC, an indirect wholly owned investment management subsidiary of Franklin Resources, Inc., are exercised independently from Franklin Resources, Inc. and from all of its other investment management subsidiaries. Furthermore, internal policies and procedures of Franklin Mutual Advisers, LLC and Franklin Resources, Inc. establish informational barriers that prevent the flow between Franklin Mutual Advisers, LLC and the other affiliates of Franklin Resources, Inc. of information that relates to the voting and investment powers over the securities owned by their respective investment management clients. Consequently, Franklin Mutual Advisers, LLC and the other affiliates of Franklin Resources, Inc. report the securities over which they hold investment and voting power separately from each other for purposes of Section 13 of the Exchange Act. Charles B. and Rupert H. Johnson each owns more than 10% of the outstanding common stock of Franklin Resources, Inc. and are its principal stockholders. They and Franklin Resources, Inc. may be deemed to be the beneficial owners of securities held by persons and entities for whom or for which subsidiaries of Franklin Resources, Inc. provide investment management services. Franklin Resources, Inc., the Johnsons and such subsidiaries disclaim any pecuniary interest in, and any beneficial ownership as defined inRule 13d-3 of the Exchange Act of, any of these securities. Franklin Resources, Inc., the Johnsons and each subsidiary of Franklin Resources, Inc. believe that they are not a “group” within the meaning ofRule 13d-5 under the Exchange Act and that they are not otherwise required to attribute to each other the beneficial ownership of the Securities held by any of them or by any persons or entities for whom or for which such subsidiaries provide investment management services. Pursuant to Charter’s plan of reorganization, funds advised by Franklin Advisers, Inc. had the ability to elect one member to Charter’s board and elected Robert Cohn, who has been serving on the board since November 30, 2009. Notwithstanding the election of Mr. Cohn to the board, Mr. Cohn does not represent or otherwise have any duty to advance the interests of Franklin Advisers, Inc. or any of its direct or indirect affiliates, and Franklin Advisers, Inc. does not believe that it is an affiliate of Charter as a result of Mr. Cohn serving as a director of Charter. | ||
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| (7) | By virtue of being a principal at Apollo Management, L.P, Mr. Glatt may be deemed to have or share beneficial ownership of shares beneficially owned by AP Charter Holdings, L.P. | |
| (8) | By virtue of being a member of Oaktree Capital Group Holdings GP, LLC, Mr. Karsh may be deemed to have or share beneficial ownership of shares or warrants beneficially owned by Oaktree Opportunities Investments, L.P. or certain of its affiliated funds. Mr. Karsh expressly disclaims beneficial ownership of such shares or warrants, except to the extent of his direct pecuniary interest therein. See Note 3. | |
| (9) | By virtue of being an employee of Oaktree Capital Management, LLC, Mr. Lee may be deemed to have or share beneficial ownership of shares or warrants beneficially owned by Oaktree Opportunities Investments, L.P. or certain of its affiliated funds. Mr. Lee expressly disclaims beneficial ownership of such shares or warrants, except to the extent of his direct pecuniary interest therein. See Note 3. | |
| (10) | By virtue of being a principal at Apollo Management, L.P, Mr. Parker may be deemed to have or share beneficial ownership of shares beneficially owned by AP Charter Holdings, L.P. |
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| (11) | Includes | |
| (12) | Includes | |
| (13) | Includes | |
| (14) | Includes | |
| (15) | Includes | |
Includes shares of restricted stock issued pursuant the 2009 Stock Incentive Plan that are not yet vested, but eligible to be voted, options and restricted stock units that are exercisable or eligible to become vested within sixty days of February 29, 2012, and the shares of our Class A common stock beneficially owned described in footnotes |
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We maintain written policies and procedures covering related party transactions. The Audit Committee reviews the material facts of related party transactions. Management has various procedures in place, e.g., Charter’s Code of Conduct which requires annual certifications from employees that are designed to identify potential related party transactions. Management brings those to the Audit Committee for review as appropriate. Our Related Party Transaction Policy provides that a “Related Party Transaction” is any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which: (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year; (2) the Company is a participant; and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). A “Related Party” is any: (a) person who is or was (since the beginning of the last fiscal year for which the Company has filed aForm 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director; (b) greater than 5 percent beneficial owner of the Company’s common stock; or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers-mothers-and fathers-in-law, sons-and daughters-in-law, andfathers-in-law, sons- anddaughters-in-law, and brothers- and brothers-and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). Open market purchases or privately-negotiated transactions, excluding any distributions by the Company, involving any securities of the Company or its subsidiaries, are not deemed to be a “Related Party Transaction” under our Related Party Transaction Policy.
The following sets forth certain transactions in which we are involved and in which the directors, executive officers and affiliates of Charter have or may have a material interest. A number of our debt instruments and those of our subsidiaries require delivery of fairness opinions for transactions with affiliates involving more than $50 million. Such fairness opinions have been obtained whenever required. All of our transactions with affiliates have been deemed by Charter’s board of directors or a committee of the board of directors to be in our best interest. Related party transactions are approved by the Audit Committee or another independent body of Charter’s board of directors.
Transactions arising outwith Principal Stockholders — Stock Repurchases
On March 22, 2011, the Company purchased, in a private transaction, 4.5 million shares of our Restructuring
Transactions Arising Out of Third Party Relationships in which Principal Stockholders have or had an Interest
Participations under Master Agreements between Third Parties and Apollo Management Holdings, L.P.
Certain subsidiaries of Charter are parties to participation agreements with various third parties to receive discounted services or goods (the “Participation Agreements”) in connection with master agreements between those third parties and Apollo. The Participation Agreements were available to affiliates of Apollo. Neither Charter nor its subsidiaries make any direct payments to Apollo, or any affiliate, parent or subsidiary of Apollo, in connection with the Participation Agreements and the applicable Charter party is billed directly by the third party for the discounted goods or services. Charter has determined that these Participation Agreements do not constitute Related Party Transactions.
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Agreements with Third Parties in which Oaktree Opportunities Investments, L.P holds an interest
Charter is a party to a programming distribution agreement with Liberman Broadcasting, Inc. for carriage of Estrella TV, a Spanish-language video service (the “Estrella Agreement”). One of Charter’s principal stockholders, Oaktree Opportunities Investments, L.P., holds an interest in Liberman Broadcasting, Inc. and/or its affiliates. In addition, Mr. Karsh, who sits on Charter’s board of directors, also serves on the board of LBI Media Holdings, Inc. and LBI Media, Inc., affiliates of Liberman Broadcasting, Inc. The Estrella Agreement runs through October 15, 2014 with an option to extend through October 15, 2017. There are no license fees being paid by Charter under the agreement and no expense, other than bandwidth. Charter will be provided with a marketing fund based on certain affiliated funds beneficially hold approximately 18%incremental subscribers delivered in each year of the Class A common stock. Funds advised by Franklin Advisers, Inc. beneficially hold approximately 17% of the Class A common stock.
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Intercompany Management Arrangements
Charter is a party to management arrangements with Charter Holdco and certain of its subsidiaries. Prior to the Company’s emergence from Chapter 11 proceedings, Paul Allen had a significant interest in Charter Holdco resulting in these management arrangements constituting Related Party Transactions prior to that time. Under these agreements, Charter provides management services for the cable systems owned or operated by its subsidiaries and Charter receives reimbursement for all costs and expenses incurred by it for activities relating to the ownership and operation of the managed cable systems, including corporate overhead, administration and salary expense. Payment of management fees by Charter’s operating subsidiaries is subject to certain restrictions under the credit facilities and indentures of such subsidiaries. If any portion of the management fee due and payable is not paid, it is deferred by Charter and accrued as a liability of such subsidiaries. For the year ended December 31, 2010,2011, the subsidiaries of Charter Holdings paid a total of $246$249 million in management fees to Charter.
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(Item 2 on Proxy Card)
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(Item 62 on Proxy Card)
The Audit Committee of the board of directors has appointed KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm for 2011.2012. Stockholder ratification of the selection of KPMG as the Company’s independent registered public accounting firm is not required by the Company’s Bylaws or other applicable requirement. However, as a matter of corporate responsibility, the Audit Committee decided to solicit stockholder ratification of this appointment. Ratification of the appointment of KPMG as the Company’s independent registered public accounting firm is not required for KPMG’s retention; however, if the appointment is not ratified, the Audit Committee may consider re-evaluating the appointment.
KPMG has been serving as the Company’s independent registered public accounting firm since 2002. The Company has been advised that no member of KPMG had any direct financial interest or material indirect financial interest in the Company or any of its subsidiaries or, during the past three years, has had any connection with the Company or any of its subsidiaries in the capacity of promoter, underwriter, voting trustee, director, officer or employee. The Company has been advised that no other relationship exists between KPMG and the Company that impairs KPMG’s status as the independent registered public accounting firm with respect to the Company within the meaning of the Federal securities laws and the requirements of the Independence Standards Board.
Representatives of KPMG will be in attendance at the Annual Meeting and will have an opportunity to make a statement if they so desire. The representatives will also be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
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Principal Accounting Firm
KPMG acted as the Company’s principal accountant in 20102011 and 2009,2010, and, subject to ratification by stockholders at the Annual Meeting, KPMG is expected to serve as the Company’s independent registered public accounting firm for 2011.2012. Representatives of KPMG will be in attendance at the Annual Meeting and will have an opportunity to make a statement if they so desire. The representatives will also be available to respond to appropriate questions.
Services of Independent Registered Public Accounting Firm
The Audit Committee has adopted policies and procedures requiring the pre-approval of non-audit services that may be provided by our independent registered public accounting firm. We have also complied and will continue to comply with the provisions of the Sarbanes-Oxley Act of 2002 and the related SEC rules pertaining to auditor independence and audit committee pre-approval of audit and non-audit services.
Audit Fees
During the years ended December 31, 20102011 and 2009,2010, we incurred fees and related expenses for professional services rendered by KPMG for the audits of our and our subsidiaries’ financial statements, for the review of our and our subsidiaries’ interim financial statements, registration statement filings and offering memoranda filings totaling approximately $4.3 million and $4.0 million, and $5.5 million, respectively.
Audit-Related Fees
We did not incur any audit-related fees during the yearyears ended December 31, 2011 and 2010. We incurred fees to KPMG of approximately $0.1 million during the year ended December 31, 2009. These services were primarily related to certain
agreed-upon procedures.
None.
All Other Fees
We incurred other fees to KPMG of approximately $0.3 million and $0.1 million during the yearyears ended December 31, 2010.2011 and 2010, respectively. These services were primarily related to due diligence related to acquisitions. None were incurred for the year ended December 31, 2009.
The Audit Committee appoints, retains, compensates and oversees the independent registered public accounting firm (subject, if applicable, to board of directorand/or stockholder ratification), and approves in advance all fees and terms for the audit engagement and non-audit engagements where non-audit services are not prohibited by Section 10A of the Securities Exchange Act of 1934, as amended with respect to independent registered public accounting firms. Pre-approvals of non-audit services are sometimes delegated to a single member of the Audit Committee. However, any pre-approvals made by the Audit Committee’s designee are presented at the Audit Committee’s next regularly scheduled meeting. The Audit Committee has an obligation to consult with management on these matters. The Audit Committee approved 100% of the KPMG fees for the years ended December 31, 20102011 and 2009.2010. Each year, including 2010,2011, with respect to the proposed audit engagement, the Audit Committee reviews the proposed risk assessment process in establishing the scope of examination and the reports to be rendered.
In its capacity as a committee of the board, the Audit Committee oversees the work of the independent registered public accounting firm (including resolution of disagreements between management and the public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or
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performing other audit, review or attest services. The independent registered public accounting firm reports directly to the Audit Committee. In performing its functions, the Audit Committee undertakes those tasks and responsibilities that, in its judgment, most effectively contribute to and implement the purposes of the Audit Committee charter. For more detail of the Audit Committee’s authority and responsibilities, see the Company’s Audit Committee charter on the Company’s website,www.charter.com.
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The following report does not constitute soliciting materials and is not considered filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, unless we state otherwise.
The Audit Committee was established to oversee the Company’s accounting and financial reporting processes and the audits of the Company’s annual financial statements. In 2010Initially in 2011, the Audit Committee consisted of Messrs. Jacobson, Merritt, and Temple. Mr. Temple resigned as a director and Audit Committee member in January 2011 and Mr. Markley was appointed to the Audit Committee at that time. All members were determined by the board to be independent in accordance with the applicable corporate governance listing standards of the NASDAQ Global Select Market. The Company’s board of directors has determined that, in its judgment, Mr. Merritt is an audit committee financial expert within the meaning of the applicable federal regulations. Mr. Temple resigned as a director and Audit Committee member in January 2011 and Mr. Markley was appointed to fill the vacancy.
The Audit Committee’s functions are detailed in a written amended and restated Audit Committee charter adopted by the board of directors in December 2009, a copy of which is available on the Company’s website at www.charter.com. As more fully described in its charter, the Audit Committee reviews the Company’s financial reporting process on behalf of the board. Company management has the primary responsibility for the Company’s financial statements and the reporting process. The Company’s independent registered public accounting firm is responsible for performing an audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and expressing an opinion on the conformity of the financial statements to generally accepted accounting principles. The internal auditors are responsible to the Audit Committee and the board for testing the integrity of the financial accounting and reporting control systems and such other matters as the Audit Committee and board determine. The Audit Committee held eight meetings in 2010.
The Audit Committee has reviewed and discussed with management the Company’s audited financial statements for the year ended December 31, 2010.2011. The Audit Committee has discussed the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (Communication with Audit Committees) with KPMG, the independent registered public accounting firm for the Company’s audited financial statements for the year ended December 31, 2010.
The Audit Committee has also received the written disclosures and the letter from KPMG required by Independence Standards Board Standard No. 1 (Independence Discussion with Audit Committees), and the Audit Committee has discussed the independence of KPMG with that firm and has considered the compatibility of non-audit services with KPMG’s independence.
Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to the board of directors that the Company’s audited financial statements be included in the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 20102011 for filing with the SEC.
DAVID C. MERRITT
CRAIG A. JACOBSON
JOHN D. MARKLEY, JR.
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Section 16 of the Exchange Act requires our directors and certain of our officers, and persons who own more than 10% of our common stock, to file initial reports of ownership and reports of changes in ownership of our common stock and other of our equity securities with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms furnished to us and written representations that no other reports were required, we believe that all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with during the 20102011 fiscal year.
Code of Ethics
We have adopted a Financial Code of Ethics within the meaning of federal securities regulations for our employees, including all executive officers and directors. We also established a hotline and website for reporting alleged violations of the Financial Code of Ethics, established procedures for processing complaints and implemented educational programs to inform our employees regarding the Financial Code of Ethics. A copy of our Financial Code of Ethics is available on our website at www.charter.com.
Stockholder Proposals for 20122013 Annual Meeting
If you want to include a stockholder proposal in the proxy statement for the 20122013 annual meeting, it must be delivered to the Corporate Secretary at the Company’s executive offices no later than November 18, 2011.21, 2012. The federal proxy rules specify what constitutes timely submission and whether a stockholder proposal is eligible to be included in the proxy statement.
If a stockholder desires to bring business before the meeting that is not the subject of a proposal timely and properly submitted for inclusion in the proxy statement or to make a nomination of a person for election to the board, the stockholder must follow procedures outlined in the Company’s Bylaws. One of the procedural requirements in the Bylaws is timely notice in writing of the business the stockholder proposes to bring before the meeting. To be timely with respect to the 20122013 annual meeting, such a notice must be delivered to the Company’s Corporate Secretary at the Company’s executive offices no earlier than January 7, 20129, 2013 and no later than February 1, 2012.3, 2013. However, in the event that the Company elects to hold its next annual meeting more than 30 days before or after the anniversary of this Annual Meeting, such stockholder proposals would have to be received by the Company not earlier than 120 days prior to the next annual meeting date and not later than 90 days prior to the next annual meeting date.
Such notice must include: (1) for a nomination for director, all information relating to such person that is required to be disclosed in a proxy for election of directors; (2) as to any other business, a description of the proposed business, the text of the proposal, the reasons therefore, and any material interest the stockholder may have in that business; and (3) certain information regarding the stockholder making the proposal. These requirements are separate from the requirements a stockholder must meet to have a proposal included in the Company’s proxy statement. The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority.
Any stockholder desiring a copy of the Company’s Bylaws will be furnished one without charge upon written request to the Corporate Secretary. A copy of the amended and restated Bylaws was filed as an exhibit to the Company’s Current Report onForm 8-K filed on December 4, 2009, and is available at the SEC Internet site(http: (http://www.sec.gov)www.sec.gov).
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At the date of mailing of this proxy statement, we are not aware of any business to be presented at the annual meeting other than the matters discussed above. If other proposals are properly brought before the meeting, any proxies returned to us will be voted as the proxyholder sees fit.
Our Annual Report onForm 10-K for the year ended December 31, 20102011 is available without charge by accessing the “Investor” section of our website at www.charter.com.www.charter.com. You also may obtain a paper copy of the Charter Communications, Inc. 20102011 10-K, without exhibits, at no charge by writing to the Company at 12405 Powerscourt Drive, St. Louis, MO 63131, Attention: Investor Relations.
In addition, certain financial and other related information, which is required to be furnished to our stockholders, is provided to stockholders concurrently with this Proxy Statement in our 20102011 Annual Report. The SEC has enacted a rule that allows the Company to deliver only one copy of our Proxy Statement and 20102011 Annual Report to multiple security holders sharing an address if they so consent. This is known as “householding.” The Householding Election, which appears on your proxy card, provides you with a means for you to notify us whether you consent to participate in householding. By marking “Yes” in the block provided, you will consent to participate in householding and by marking “no” you will withhold your consent to participate. If you do nothing, you will be deemed to have given your consent to participate in householding. Your consent to householding will be perpetual unless you withhold or revoke it. You may revoke your consent at any time by contacting Broadridge Financial Solutions (“Broadridge”), either by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, or by calling(800) 542-1061. We will remove you from the householding program within 30 days of receipt of your response, following which you will receive an individual copy of our disclosure statement. Even if your household receives only one Annual Report and one Proxy Statement, a separate proxy card will be provided for each stockholder. If you vote using the proxy card, please sign and return it in the enclosed postage-paid envelope. If you vote by Internet, there is no need to mail the proxy card.
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CHARTER COMMUNICATIONS, INC. 12405 POWERSCOURT DRIVE ST. LOUIS, MO 63131 | VOTE BY INTERNET Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | KEEP THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR | ||||||||||||||||||||||||||||||||||||||
1. | Election of Directors Nominees | ¨ | ¨ | ¨ | ||||||||||||||||||||||||||||||||||
01 | W. Lance Conn | 02 Darren Glatt | 03 Craig A. Jacobson | 04 Bruce A. Karsh | 05 Edgar Lee | |||||||||||||||||||||||||||||||||
06 | Jeffrey A. Marcus | 07 John D. Markley, Jr. | 08 David C. Merritt | 09 Stan Parker | 10 Thomas M. Rutledge | |||||||||||||||||||||||||||||||||
| 11 | Eric L. Zinterhofer | ||||||||||||||||||||||||||||||||||||
| The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||||||||||||||||||||
2 To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ended December 31, | ¨ | ¨ | ¨ | |||||||||||||||||||||||||||||||||||
NOTE:To vote on any other matters properly brought before the stockholders at the meeting. | ||||||||||||||||||||||||||||||||||||||
For address change/comments, mark here. | ¨ | |||||||||||||||||||||||||||||||||||||
(see reverse for instructions) | Yes | No | ||||||||||||||||||||||||||||||||||||
Please indicate if you plan to attend this meeting | ¨ | ¨ | ||||||||||||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign | ||||||||||||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The | ||||||||||||||||||||||||||
| CHARTER COMMUNICATIONS, INC. Annual Meeting of Stockholders May 1, 2012 10:00 AM This proxy is solicited by the Board of Directors | |||||||||||||||||||||||||
The stockholders hereby appoint This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Address change/comments: | ||||||||||||||||||||||||||
| (If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) | ||||||||||||||||||||||||||
Continued and to be signed on reverse side | ||||||||||||||||||||||||||
