8-KLeadership ChangesOther EventsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Executive Changes (Dec 19, 2011)

Filed December 19, 2011For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced on December 19, 2011, a significant leadership change with the appointment of Thomas Rutledge as President and Chief Executive Officer, effective February 13, 2012. Mr. Rutledge, a seasoned industry veteran with 34 years of experience, previously served as COO of Cablevision and President of Time Warner Cable. His appointment is accompanied by a comprehensive employment agreement and substantial equity awards designed to incentivize long-term performance and align his interests with shareholders. The employment package includes a base salary of $2.0 million, a target bonus of 175% of base salary, and a significant equity grant of 1,258,500 shares of common stock. This equity award consists of both time-vesting and performance-vesting stock options and restricted stock, with vesting tied to specific stock price hurdles and anniversaries of his start date. The agreement also details robust severance provisions in cases of termination without cause or for good reason, as well as provisions related to a change of control.

Key Highlights

  • 1Appointment of Thomas Rutledge as President and CEO, effective February 13, 2012.
  • 2Mr. Rutledge's extensive experience includes prior roles as COO of Cablevision and President of Time Warner Cable.
  • 3Employment agreement includes a base salary of $2.0 million and a target bonus of 175% of base salary.
  • 4Significant equity awards granted: 646,800 stock options and 611,700 shares of restricted stock.
  • 5Equity awards are structured with both time-based and performance-based vesting conditions, including stock price hurdles.
  • 6Robust termination and change of control provisions outlined in the employment agreement, including substantial severance.
  • 7Mr. Rutledge is subject to non-compete (12 months) and non-solicitation (24 months) covenants.

Frequently Asked Questions

The new CEO is Thomas Rutledge, appointed effective February 13, 2012. He is a highly experienced executive with 34 years in the cable industry, having previously served as Chief Operating Officer of Cablevision and President of Time Warner Cable. He is recognized as a distinguished leader in the cable industry, with numerous accolades and board positions.

Thomas Rutledge's compensation includes a base salary of $2.0 million, eligible for annual increases. He is also eligible for an annual target bonus of 175% of his base salary. Additionally, he received a significant equity award consisting of 1,258,500 shares of common stock in the form of stock options and restricted stock.

The equity awards are split into time-vesting and performance-vesting tranches. Time-vesting awards vest over four years in 25% installments annually from the CEO Effective Date. Performance-vesting awards are tied to specific stock price hurdles ($60, $80, $100, $125, and $150 per share) and vest in 25% installments over four years from the grant date, based on a 60-day average trading price, subject to the attainment of these hurdles. Certain equity awards also have specific terms related to change of control events.

In the event of termination without 'Cause' or resignation for 'Good Reason', Mr. Rutledge is entitled to 2.5 times his then-current base salary plus target bonus, paid in installments (or lump sum if a change of control occurs). He also receives a lump-sum payment for continued healthcare coverage, a pro-rata bonus, pro-rata vesting of time-vesting equity awards, and continued eligibility for performance-vesting equity awards. Specific provisions also apply for termination due to death or disability, and accelerated vesting of equity occurs upon a change of control under certain conditions.