8-KOther Events

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report (Jan 20, 2004)

Filed January 20, 2004For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced a voluntary Stock Option Exchange Program for its employees on January 20, 2004. This program offers eligible employees the opportunity to exchange certain existing stock options, specifically those with an exercise price over $10, for shares of restricted Class A common stock or, in some cases, cash. The exchange offer covers approximately 48% of Charter's outstanding options, totaling 22,929,573 shares. The company estimates the total cost of the program to be around $17 million, with a significant portion recognized as compensation expense. This includes both immediate cash compensation and non-cash compensation expense related to the restricted stock, which will be recognized over a three-year vesting period.

Key Highlights

  • 1Charter Communications initiated a voluntary Stock Option Exchange Program for employees.
  • 2Eligible employees can exchange stock options with an exercise price over $10 for restricted Class A common stock or cash.
  • 3The program covers 22,929,573 shares of stock options, representing approximately 48% of total outstanding options.
  • 4The estimated total cost of the program is approximately $17 million.
  • 5The program will result in approximately $5.3 million in first-quarter cash compensation expense.
  • 6A non-cash compensation expense of approximately $11.7 million is estimated, to be recognized over a three-year vesting period for the restricted stock.
  • 7The offer is scheduled to close on February 20, 2004.

Frequently Asked Questions

The program allows Charter Communications to offer its employees an opportunity to exchange their existing stock options, particularly those with higher exercise prices, for restricted stock or cash. This can help employees realize value from their options and potentially align their interests more closely with the company's performance through restricted stock ownership.

All eligible employees of Charter and its subsidiaries holding vested and unvested stock options with an exercise price greater than $10 are eligible to participate. Members of the Board of Directors who are not also employees are not eligible.

Charter estimates the total cost of the program to be approximately $17 million. This includes about $5.3 million in cash compensation expense in the first quarter and approximately $11.7 million in non-cash compensation expense related to the restricted stock, which will be expensed over a three-year vesting period. The actual non-cash expense will depend on the market value of the stock on the grant date and the number of options exchanged.

The exchange offer is scheduled to close on February 20, 2004. Charter reserves the right to extend the offering period at its discretion.