8-KLeadership ChangesOther EventsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Executive Changes (Mar 24, 2008)

Filed March 24, 2008For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on March 24, 2008, detailing significant executive compensation arrangements and material financing activities. The company's Compensation Committee approved a new 2008 Incentive Program (2008 IP) for eligible participants, structured as one-third restricted stock, one-third performance units, and one-third performance cash. Vesting and payout for performance-based components are contingent on achieving company performance goals, with provisions for forfeiture, acceleration, and adjustments based on future performance. Specific awards were granted to key executives, including the COO and General Counsel, with the CEO's awards recommended to the Board. In addition to compensation, the filing announces two material financing events by subsidiary Charter Communications Operating, LLC. On March 19, 2008, Charter Operating closed on a private sale of $546 million in 10.875% 2nd lien notes due 2014, with proceeds used to repay its revolving credit facility. Furthermore, Charter Operating closed on $500 million in incremental term loans under its existing credit facilities for general corporate purposes. These financing activities indicate ongoing efforts to manage and utilize the company's debt structure.

Key Highlights

  • 1New 2008 Incentive Program (2008 IP) adopted, comprising restricted stock, performance units, and performance cash.
  • 2Performance awards under the 2008 IP are tied to 2008 company performance goals, with potential for up to 200% attainment.
  • 3Vesting schedules and forfeiture clauses for incentive awards are detailed, including provisions for termination, retirement, and change-in-control events.
  • 4Key executives Michael Lovett (COO) and Grier Raclin (General Counsel) received specific 2008 IP awards.
  • 5A recommendation was made to the Board for significant 2008 IP awards to President and CEO Neil Smit.
  • 6Charter Communications Operating, LLC, a subsidiary, closed on $546 million of 10.875% 2nd lien notes due 2014.
  • 7Proceeds from the notes sale were used to repay the revolving credit facility.
  • 8Charter Communications Operating, LLC, also closed on $500 million in incremental term loans for general corporate purposes.

Frequently Asked Questions

Charter Communications adopted a new 2008 Incentive Program (2008 IP) for eligible participants. This program awards are split equally into three components: restricted shares of Class A common stock, performance units, and performance cash. The goal is to align executive compensation with company performance and long-term shareholder value.

The performance units and performance cash components of the 2008 IP are contingent on the company achieving specific performance goals for 2008. The Committee will determine the degree of attainment in early 2009, with a maximum of 200% of awarded amounts payable. A portion vests and is paid out annually over three years, with potential adjustments based on subsequent company performance. Unearned portions are forfeited upon certain terminations.

Charter Communications Operating, LLC, a subsidiary, closed on two significant financing transactions. First, it sold $546 million in 10.875% 2nd lien notes due 2014 in a private placement, using the proceeds to repay its revolving credit facility. Second, it secured $500 million in incremental term loans under its existing credit facilities for general corporate purposes. These actions indicate the company is actively managing its debt and liquidity.

In the event of a change in control or a going private transaction where the 2008 IP awards are not continued, or if an executive is terminated without cause or for good reason following such a transaction, the awards generally provide for full vesting acceleration of restricted stock and performance awards, and immediate payout of performance bank balances. However, certain limits may apply to awards made shortly before a change-in-control announcement.