SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): December 15, 2009
Charter Communications,
Inc.
(Exact name of registrant as
specified in its charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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000-27927
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43-1857213
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(Commission File
Number)
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(I.R.S. Employer
Identification Number)
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12405 Powerscourt
Drive
St. Louis, Missouri
63131
(Address of principal executive
offices including zip code)
(314)
965-0555
(Registrant's telephone number,
including area code)
Not
Applicable
(Former name or former address, if
changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
Departure of Grier C.
Raclin
Effective
December 15, 2009, Charter Communications, Inc. (the "Company") entered
into an agreement with Grier C. Raclin, Executive Vice President and Chief
Administrative Officer of the Company, governing the terms and conditions of the
termination of his employment with the Company, as of December 15, 2009 (the
"Separation Agreement"). Under the terms of the Separation Agreement, Mr. Raclin
will receive the amount of two times (a) his base salary, calculated at an
annual rate of $486,757.89 and (b) his annual target bonus of $365,068.42 until
December 15, 2011, (the "Separation Term"), which will be paid over the
remainder of the Separation Term in equal bi-weekly installments on Company's
regular pay days for executives, subject to a delay in the first payment to June
16, 2010; provided
that, the total of such payments shall not exceed, in the aggregate, the
gross amount of $1,703,652.62. Mr. Raclin will receive a lump sum
bonus payment of $182,534.00 for the first half of 2009, under the Company's
2009 Executive Bonus Plan. He will also receive a lump sum payment
equal to twenty-four times the monthly cost, at the time of termination, for
paid coverage for health, dental and vision benefits under COBRA, outplacement
services through July 31, 2010 and all remaining hours of accrued and unused
vacation. Any performance cash and restricted cash awards previously
granted to Mr. Raclin under the Company's Long-Term Incentive Plan will continue
to vest during the remainder of the Separation Term but awards vesting after the
Separation Term will terminate. Mr. Raclin has agreed to abide by the
non-disparagement provision in the Separation Agreement and released the Company
from any claims arising out of or based upon any facts occurring prior to the
date of the Separation Agreement. Mr. Raclin has also agreed that he will
continue to be bound by the non-competition (through December 15, 2010),
non-interference and non-disclosure provisions contained in his August 1, 2007
Employment Agreement, as amended.
The full
text of Mr. Raclin's Separation Agreement is filed herewith as Exhibit
99.1.
2009 Stock Incentive
Plan
In accordance with the Company's Joint
Plan of Reorganization (the "Joint Plan") which was consummated upon the
Company's emergence from bankruptcy on November 30, 2009, the Company's Board of
Directors (the "Board") was deemed to have adopted the Charter Communications,
Inc. 2009 Stock Incentive Plan, or the 2009 Stock Plan. The 2009
Stock Plan provides for grants of nonqualified stock options, incentive stock
options, stock appreciation rights, dividend equivalent rights, performance
units and performance shares, share awards, phantom stock, restricted stock
units and restricted stock. Directors, officers and other employees
of the Company and its subsidiaries, as well as others performing consulting
services for the Company, will be eligible for grants under the 2009 Stock
Plan. The purpose of the 2009 Stock Plan is to provide incentives
that will attract, retain and motivate highly competent officers, directors,
employees and consultants by providing them with appropriate incentives and
rewards either through a proprietary interest in the Company’s long-term success
or compensation based on their performance in fulfilling their personal
responsibilities. The following is a summary of the material terms of
the 2009 Stock Plan, but does not include all of the provisions of the 2009
Stock Plan.
On
December 16, 2009, the Board authorized an additional 3,848,393 shares of common
stock for inclusion in the plan, for a total of 7,696,786 shares available for
distribution. In addition, the Board authorized that the 2009 Stock
Plan be amended and restated to show the increase. For further
information about the 2009 Stock Plan as amended and restated, a complete copy
of the Amended and Restated 2009 Stock Plan is incorporated by reference to this
Form 8-K and filed as Exhibit 10.1 hereto.
Administration
The 2009 Stock Plan is administered by
a committee designated by the Board. Among the committee’s powers are to
determine the form, amount and other terms and conditions of awards, clarify,
construe or resolve any ambiguity in any provision of the 2009 Stock Plan or any
award agreement, amend the terms of outstanding awards and adopt such rules,
forms, instruments and guidelines for administering the 2009 Stock Plan as it
deems necessary or proper. All actions, interpretations and
determinations by the committee or by the Board are final and
binding.
Available
Shares
The aggregate number of shares of
common stock which may be issued or used for reference purposes under the 2009
Stock Plan or with respect to which awards may be granted may not exceed
7,696,786 shares, which may be either authorized and unissued shares of the
Company’s common stock or shares of common stock held in or acquired for the
Company’s treasury. In general, if awards under the 2009 Stock Plan are for any
reason cancelled, or expire or terminate unexercised, the shares covered by such
awards will again be available for the grant of awards under the 2009 Stock
Plan.
The aggregate number of shares subject
to options and/or stock appreciation rights granted under the 2009 Stock Plan
during any calendar year to any one participant may not exceed 1,000,000 shares,
the maximum number of shares that may be granted under the 2009 Stock Plan
during any calendar year to any one participant as performance shares or
performance units (in either case, denominated in shares) shall not exceed
1,000,000 shares, and the aggregate number of shares that may be issued pursuant
to the exercise of incentive stock options granted under the 2009 Stock Plan may
not exceed 7,696,786 shares. The maximum cash amount payable pursuant
to an award denominated in cash and granted in any calendar year to any
participant under the 2009 Stock Plan that is intended to satisfy the
requirements for “performance-based compensation” under Internal Revenue Code
(“Code”) Section 162(m) shall not exceed $6,000,000.
Eligibility
for Participation
Members of the Board, as well as
employees of, and consultants to, the Company or any of its subsidiaries and
affiliates are eligible to receive awards under the 2009 Stock
Plan. The selection of participants is within the sole discretion of
the committee.
Award
Agreement
Awards granted under the 2009 Stock Plan shall be evidenced by award agreements
(which need not be identical) that provide additional terms, conditions,
restrictions and/or limitations covering the grant of the award, including,
without limitation, additional terms providing for the acceleration of,
exercisability, or vesting of awards in the event of a change in control (as
defined in the 2009 Stock Plan) or conditions regarding the participant's
employment, as determined by the committee in its sole discretion.
Awards
Under the 2009 Stock Plan
The
following types of awards are available under the 2009 Stock Plan:
Stock
Options
The committee may grant nonqualified
stock options and incentive stock options (only to eligible employees) to
purchase shares of common stock. The committee will determine the
number of shares of common stock subject to each option, the term of each option
(which may not exceed ten years (or five years in the case of an incentive stock
option granted to a 10% stockholder)), the exercise price, the vesting schedule
(if any), and the other material terms of each option. No incentive
stock option or nonqualified stock option may have an exercise price less than
the fair market value of a share of common stock at the time of grant (or, in
the case of an incentive stock option granted to a 10% stockholder, 110% of such
share’s fair market value). Options will be exercisable at such time
or times and subject to such terms and conditions as determined by the committee
at grant and the exercisability of such options may be accelerated by the
committee in its sole discretion.
Stock
Appreciation Rights
The committee may grant stock
appreciation rights (which are referred to herein as “SARs”) either with a stock
option, which may be exercised only at such times and to the extent the related
option is exercisable (which is referred to herein as a “Related SAR”), or
independent of a stock option (which is referred to herein as a
“Unrelated SAR”). A SAR is a right to receive a payment in
shares of common stock or cash (as determined by the committee) equal in value
to the excess of the fair market value of one share of common stock on the date
of exercise over the exercise price per share established in connection with the
grant of the SAR. The term of each SAR may not exceed ten
years. The exercise price per share covered by a SAR will be the
exercise price per share of the related option in the case of a Related SAR and
will be the fair market value of common stock on the date of grant in the case
of an Unrelated SAR.
Restricted Stock and Restricted Stock
Units
The committee may award shares of
restricted stock and restricted stock units. Except as otherwise
provided by the committee upon the award of restricted stock, the recipient
generally has the rights of a stockholder with respect to the shares, including
the right to receive dividends, the right to vote the shares of restricted stock
and, conditioned upon full vesting of shares of restricted stock, the right to
tender such shares, subject to the conditions and restrictions generally
applicable to restricted stock or specifically set forth in the recipient’s
restricted stock agreement. Each restricted stock unit represents a
notional unit interest equal in value to a share of Company common stock to be
paid at such times and subject to such conditions as may be specified in the
award agreement. The committee may determine at the time of award
that the payment of dividends, if any, will be deferred until the expiration of
the applicable restriction period.
If the grant of restricted stock or
restricted stock units or the lapse of the relevant restrictions is based on the
attainment of performance goals, the committee will establish for each recipient
the applicable performance goals, formulae or standards and the applicable
vesting percentages with reference to the attainment of such goals or
satisfaction of such formulae or standards while the outcome of the performance
goals are substantially uncertain. Such performance goals may
incorporate provisions for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar events or circumstances.
Dividend
Equivalent Rights
The committee may award dividend
equivalent rights. The terms applicable to dividend equivalent rights
will be determined by the committee at the time of grant. Dividend equivalent
rights may be settled in cash or shares or a combination thereof, in a single
installment or multiple installments as the committee determines in its
discretion.
Performance
Awards
The committee may grant a performance
award to a participant payable upon the attainment of specific performance
goals. The committee may grant performance awards that are intended
to qualify as “performance-based compensation” under Section 162(m) of the Code,
as well as performance awards that are not intended to qualify as
“performance-based compensation” under Section 162(m) of the Code. If
the performance award is payable in cash, it may be paid upon the attainment of
the relevant performance goals either in cash or in shares of restricted stock
(based on the then current fair market value of such shares), as determined by
the committee, in its sole discretion. Based on service, performance
and/or such other factors or criteria, if any, as the committee may determine,
the committee may, at or after grant, accelerate the vesting of all or any part
of any performance award.
Performance
Goals
The committee may grant awards of
restricted stock or performance awards that are intended to qualify as
“performance-based compensation” for purposes of Section 162(m) of the
Code. These awards may be granted, vest and be paid based on
attainment of specified performance goals established by the
committee. These performance goals will be based on the attainment of
a certain target level of, or a specified increase or decrease in, one or more
of the following criteria selected by the committee: (i) revenue, (ii) net
income, (iii) operating income, (iv) earnings, (v) net earnings, (vi) share
price, (vii) cash flow, (viii) EBITDA, (ix) total shareholder return, (x) total
shareholder return relative to peers, (xi) financial returns (including,
without limitation, return on assets, return on equity and return on
investment), (xii) cost reduction targets, (xiii) customer satisfaction, (xiv)
customer growth, (xv) employee satisfaction, (xvi) pre-tax profits, (xvii)
net earnings, or (xiii) any combination of the foregoing. Performance
objectives (and underlying business criteria, as applicable) may be in respect
of: (a) the performance of the Company, (b) the performance of any of its
subsidiaries, (c) the performance of any of its divisions, (d) a per share
basis, (e) a per subscriber basis, or (f) any combination of the
foregoing.
To the extent permitted by law, the
committee may also include or exclude items to measure specific objectives, such
as losses from discontinued operations, extraordinary, unusual or nonrecurring
gains and losses, the cumulative effect of accounting changes, acquisitions or
divestitures, core process redesigns, structural changes/outsourcing, and
foreign exchange impacts.
Change
in Control
Except as otherwise provided in the
applicable award agreement, in connection with a participant’s termination of
employment by the Company without cause or by the participant for good reason
within the thirteen month period following a change in control, all awards will
vest. In addition, such awards will be, in the discretion of the
committee, (i) assumed and continued or substituted in accordance with
applicable law, (ii) purchased for an amount equal to the excess of the price of
a share of common stock paid in a change in control over the exercise price of
the award(s), or (iii) cancelled if the price of a share of common stock paid in
a change in control is less than the exercise price of the award. The
committee may also, in its sole discretion, provide for accelerated vesting or
lapse of restrictions of an award at any time.
Stockholder
Rights
Except as otherwise provided in the
applicable award agreement, and with respect to an award of restricted stock or
other restricted award a participant has no rights as a stockholder with respect
to shares of common stock covered by any award until the participant becomes the
record holder of such shares.
Amendment
and Termination
Notwithstanding any other provision of
the 2009 Stock Plan, the Board may at any time amend any or all of the
provisions of the 2009 Stock Plan, or suspend or terminate it entirely,
retroactively or otherwise; provided, however, that, unless otherwise required
by law or specifically provided in the 2009 Stock Plan, the rights of a
participant with respect to awards granted prior to such amendment, suspension
or termination may not be adversely affected without the consent of such
participant.
Transferability
Awards granted under the 2009 Stock
Plan are generally nontransferable (other than by will or the laws of descent
and distribution), except that the committee may provide for the transferability
of nonqualified stock options at the time of grant or thereafter to certain
family members.
Awards
On December 16, 2009, the Company's
Compensation and Benefits Committee awarded shares of restricted stock, which
are to vest, one-third of the award on each of the first three anniversaries of
the effective date of the Joint Plan, November 30, 2009, (provided that the
grantee is an employee of the Company or a subsidiary on the Vesting Date) to
certain employees including the following named executive
officers: Neil Smit – 343,675 shares; Mike Lovett – 152,744 shares;
Eloise Schmitz – 84,009 shares; and Marwan Fawaz – 76,372 shares.
Value Creation
Plan
The Company's Value Creation Plan (the
"VCP") which was approved as part of the Joint Plan, provides that the target
bonuses of the Cash Incentive Program (the "CIP") portion of the VCP be paid out
to participants over a three-year period upon attainment of certain reasonably
achievable performance goals. On December 15, 2009, the Board changed
the target bonuses for the CIP for certain named executive
officers. The new target bonuses for those named executive officers
under the CIP are as follows: Mr. Lovett - $3,000,000, an increase of $269,000;
Ms. Schmitz - $2,250,000, an increase of $259,000; and Mr. Fawaz - $1,950,000,
an increase of $160,000. Mr. Raclin's CIP target bonus was reduced to
$0. Mr. Smit's target bonus did not change from what had been
previously reported.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
The
following exhibits are filed pursuant to Item 5.02:
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Exhibit
Number
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Description
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10.1
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Charter
Communications, Inc. Amended and Restated 2009 Stock Incentive
Plan.*
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99.1
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Separation
Agreement and Release for Grier C.
Raclin.*
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* filed
herewith.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, Charter
Communications, Inc. has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
CHARTER COMMUNICATIONS,
INC.
Registrant
Dated:
December 21, 2009
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By:/s/ Kevin D.
Howard
Name:
Kevin D. Howard
Title: Senior Vice President -
Finance, Controller and Chief Accounting
Officer
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EXHIBIT
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Exhibit
No.
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Description
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| 10.1 |
Charter
Communications, Inc. Amended and Restated 2009 Stock Incentive
Plan.*
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| 99.1 |
Separation
Agreement and Release for Grier C.
Raclin.*
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* filed
herewith