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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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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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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o
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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
Exhibit 10.1
CHARTER COMMUNICATIONS,
INC
AMENDED AND RESTATED 2009
STOCK INCENTIVE PLAN
CHARTER COMMUNICATIONS,
INC.
AMENDED AND RESTATED 2009
STOCK INCENTIVE PLAN
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1.
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Purpose.
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The
purpose of this Plan is to strengthen Charter Communications, Inc., a Delaware
corporation (the “Company”), by providing an incentive to the employees,
officers, consultants and directors of the Company, its Subsidiaries and
Affiliates and thereby encouraging them to devote their abilities and industry
to the success of the Company’s business enterprise. It is intended
that this purpose be achieved by extending to employees (including future
employees who have received a written offer of employment), officers,
consultants and directors of the Company, its Subsidiaries and Affiliates an
added long-term incentive for high levels of performance and unusual efforts
through the grant 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 (as each term is herein defined).
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2.
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Definitions.
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For
purposes of the Plan:
“Affiliate”
means, with respect to any person or entity, any entity, directly or indirectly,
controlled by, controlling or under common control with such person or
entity.
“Agreement”
means the written agreement or other instrument evidencing the grant of an
Option or Award and setting forth the terms and conditions
thereof. An Agreement may be in the form of an agreement to be agreed
to by both the Optionee or Grantee and the Company (or an authorized
representative of the Company) or certificates, notices or similar instruments
as approved by the Committee.
“Award”
means a grant of Restricted Stock, a Restricted Stock Unit, Phantom Stock, a
Stock Appreciation Right, a Performance Award, a Dividend Equivalent Right, a
Share Award or any or all of them.
“Board”
means the Board of Directors of the Company.
“Cause”
means:
(a) in
the case of a Participant whose employment with the Company or a Subsidiary is
subject to the terms of an employment agreement between such Participant and the
Company or Subsidiary, which employment agreement includes a definition of
“Cause” (or similar term), the term “Cause” as used in this Plan or any
Agreement shall have the meaning set forth in such employment agreement during
the period that such employment agreement remains in effect; and
(b) in
all other cases, the Participant (i) has committed any crime; (ii) has committed
any act of fraud knowing material misrepresentation or concealment, embezzlement
or gross dishonesty; (iii) has committed any act of sex discrimination or sexual
harassment under
the
provisions of any Federal, state or local law, resulting in any of the above
cases in a material financial loss to the Company or damage to the reputation of
the Company; (iv) has refused to comply with the lawful directives of the Board
or of the Participant’s supervisors; (v) has breached any fiduciary duty to the
Company or has engaged in conduct which constitutes gross negligence or willful
misconduct; (vi) fails to adhere in any material respect to (x) the Company’s
Code of Conduct in effect from time to time or (y) any written Company policy,
if such policy is material to the effective performance by Participant of
Participant’s duties; (vii) Participant’s conviction of, the entering of a
guilty plea or plea or nolo contendere or no contest (or the equivalent), or
entering into any pretrial diversion program or agreement or suspended
imposition of sentence, with respect to either a felony or a crime that
adversely affects or could reasonably be expected to adversely affect the
Company or its business reputation; or the institution of criminal charges
against Participant which are not dismissed within sixty (60) days after
institution, for fraud, embezzlement, any felony offense involving dishonesty or
constituting a breach of trust, or any felony (including without limitation a
crime in any jurisdiction other than the United States or any state thereof in
which Company does business which would constitute such a felony under the laws
of the United States or any state thereof); (viii) Participant’s admission of
liability of, or finding of liability, for a knowing and deliberate violation of
any “Securities Laws” (as used herein, the term “Securities Laws” means any
federal or state law, rule or regulation governing generally the issuance or
exchange of securities, including without limitation the Securities Act of 1933,
the Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder); or (ix) Participant’s illegal possession or use of any controlled
substance, or excessive use of alcohol at a work function, in connection with
Participant’s duties, or on Company premises; “excessive” meaning either
repeated unprofessional use or any single event of consumption giving rise to
significant intoxication or unprofessional behavior.
“Change
in Capitalization” means any increase or reduction in the number of Shares, or
any change (including, but not limited to, in the case of a spin-off, dividend
or other distribution in respect of Shares, a change in value) in the Shares or
exchange of Shares for a different number or kind of shares or other securities
of the Company or another corporation, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off, split-up,
issuance of warrants or rights or debentures, stock dividend, stock split or
reverse stock split, property dividend, cash dividend (other than regular,
quarterly dividends), combination or exchange of Shares, repurchase of Shares,
change in corporate structure or otherwise.
A “Change
in Control” means:
(a) in
the case of a Participant whose employment with the Company or a Subsidiary is
subject to the terms of an employment agreement between such Participant and the
Company or a Subsidiary, which employment agreement includes a definition of
“Change in Control” (or similar term), the term “Change in Control” as used in
this Plan or any Agreement shall have the meaning set forth in such employment
agreement during the period that such employment agreement remains in effect;
and
(b) in
all other cases, the occurrence of any of the following:
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(i) an
acquisition of any voting securities of the Company by any “Person” or “Group”
(as those terms are used for purposes of Section 13(d) or 14(d) of the Exchange
Act), immediately after which such Person has “Beneficial Ownership” (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%)
or more of the combined voting power of the Company’s then outstanding voting
securities; provided, however, in determining whether a Change in Control has
occurred pursuant to this definition, Shares or voting securities which are
acquired in a “Non-Control Acquisition” (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A
“Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit
plan (or a trust forming a part thereof) maintained by (A) the Company or (B)
any Subsidiary or Affiliate of the Company, (ii) the Company or any Subsidiary
of the Company, (iii) an underwriter acquiring such voting securities in
connection with a public offering of such securities; or (iv) any Person in
connection with a “Non-Control Transaction” (as hereinafter
defined);
(ii) The
individuals who, as of June 30, 2009 are members of the Board (the “Incumbent
Board”), cease for any reason to constitute at least one half of the members of
the Board or, following a Merger which results in a Parent Corporation (as
defined in paragraph (iii)(A)(l) below), the board of directors of the Parent
Corporation; provided, however, that if the election, or nomination for election
by the Company’s common stockholders, of any new director was approved by a vote
of at least one half of the Incumbent Board, such new director shall, for
purposes of this Plan, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a “Proxy Contest”) including by reason
of any agreement intended to avoid or settle any Proxy Contest; or
(iii) The
consummation of:
(A) A
merger, consolidation, reorganization or similar transaction involving the
Company or in which securities of the Company are issued (a “Merger”), unless
such Merger is a “Non-Control Transaction.” A “Non-Control
Transaction” shall mean a Merger where:
(1) the
stockholders of the Company, immediately before such Merger own directly or
indirectly immediately following such Merger more than fifty percent (50%) of
the combined voting power of the outstanding voting securities of (x) the
corporation resulting from such Merger (the “Surviving Corporation”), or (y) if
any Person or Group, directly or indirectly, owns fifty percent (50%) or more of
the combined voting power of the then outstanding voting securities of the
Surviving Corporation (such Person or Group shall be defined as a “Parent
Corporation”), the Parent Corporation;
(2) the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement
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providing
for such Merger constitute at least a majority of the members of the board of
directors of (x) the Surviving Corporation, or (y) the Parent Corporation, if
the Parent Corporation, directly or indirectly, owns fifty percent (50%) or more
of the combined voting power of the then outstanding voting securities of the
Surviving Corporation; and
(3) no
Person other than (a) the Company, (b) any Subsidiary of the Company, (c) any
employee benefit plan (or any trust forming a part thereof) that, immediately
prior to such Merger was maintained by the Company or any Subsidiary or
Affiliate of the Company, or (d) any Person who, immediately prior to such
Merger had Beneficial Ownership of fifty percent (50%) or more of the then
outstanding voting securities or Shares, has Beneficial Ownership of fifty
percent (50%) or more of the combined voting power of the outstanding voting
securities or common stock of (x) the Surviving Corporation, or (y) the Parent
Corporation, if the Parent Corporation, directly or indirectly, owns fifty
percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation.
(B) A
complete liquidation or dissolution of the Company (other than where assets of
the Company are transferred to or remain with Subsidiaries of the Company);
or
(C) The
sale or other disposition of all or substantially all of the assets of the
Company, directly or indirectly, to any Person (other than a transfer to a
Subsidiary of the Company, including, without limitation, the Allen Entities, if
and only if the Allen Entities are Affiliates (individually or collectively) of
the Company immediately prior to such sale or other disposition, or under
conditions that would constitute a Non-Control Transaction with the disposition
of assets being regarded as a Merger for this purpose or the distribution to the
Company’s stockholders of the stock of a Subsidiary or Affiliate of the Company
or any other assets).
Notwithstanding
the foregoing, for 409A Awards that are settled or distributed upon a “Change in
Control,” the foregoing definition shall only apply to the extent the applicable
event otherwise constituting a “Change in Control” would also constitute a
“change in control event” under Code Section 409A.
Unless
otherwise provided in an employment agreement between a Participant and the
Company, notwithstanding the foregoing a Change in Control shall not be deemed
to occur solely because any Person (the “Subject Person”) acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares or
voting securities as a result of the acquisition of Shares or voting securities
by the Company which, by reducing the number of Shares or voting securities then
outstanding, increases the proportional number of Shares Beneficially Owned by
the Subject Persons, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
voting securities by the Company, and after such share acquisition by the
Company, the Subject Person becomes
5
the
Beneficial Owner of any additional Shares or voting securities which increases
the percentage of the then outstanding Shares or voting securities Beneficially
Owned by the Subject Person, then a Change in Control shall
occur.
Unless
otherwise provided in an employment agreement between the Participants and the
Company, if a Participant’s employment is terminated (A) by the Company without
Cause within the thirty (30) day period immediately preceding a Change in
Control or (B) by the Company without Cause preceding a Change in Control at the
written request of a third party (or such third party’s agent) who has indicated
an intention or taken steps reasonably calculated to effect a Change in Control,
such termination shall be deemed to have occurred after a Change in Control for
purposes of this Plan provided a Change in Control shall actually have
occurred.
“Code”
means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation, any valid regulation or other guidance promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
“Committee”
means at least one committee, as described in Section 3.1, appointed by the Board from time to time to
administer the Plan and to perform the functions set forth herein.
“Company”
means Charter Communications, Inc., a Delaware Corporation.
“Director”
means a director of the Company.
“Disability”
means:
(a) in
the case of a Participant whose employment with the Company or a Subsidiary is
subject to the terms of an employment agreement between such Participant and the
Company or Subsidiary, which employment agreement includes a definition of
“Disability” (or similar term), the term “Disability” as used in this Plan or
any Agreement shall have the meaning set forth in such employment agreement
during the period that such employment agreement remains in effect;
or
(b) in
all other cases, the term “Disability” as used in this Plan or any Agreement
shall mean a physical or mental infirmity which impairs the Participant’s
ability to perform substantially his or her duties, and for which the
Participant is also receiving benefits under the Company’s long-term disability
plan, if any, then in effect.
Notwithstanding
the foregoing, for 409A Awards that are settled or distributed upon a
“Disability,” “Disability” shall mean that a Participant is disabled under
Treasury Regulation Section 1.409A-3(i)(4)(i).
“Division”
means any of the operating units or divisions of the Company or Subsidiary
designated as a Division by the Committee in its discretion.
6
“Dividend
Equivalent Right” means a right to receive all or some portion of the dividends
that are or would be payable with respect to Shares, payable in either cash or
Shares.
“Eligible
Individual” means any of the following individuals who is designated by the
Committee in its discretion as eligible to receive Options or Awards subject to
the conditions set forth herein: (a) any director, officer or
employee of the Company or a Subsidiary or Affiliate of the Company, (b) any
individual to whom the Company, or a Subsidiary or an Affiliate of the Company,
has extended a formal offer of employment, so long as the grant of any Option or
Award shall not become effective until the individual commences employment or
(c) any consultant or advisor of the Company or a
Subsidiary. Notwithstanding the foregoing, the eligibility and/or
participation of those employees represented by a collective bargaining
representative shall be governed solely by the results of good faith
negotiations between the Company and such employees’ representative and/or by
the express terms of any collective bargaining agreement resulting
therefrom.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Fair
Market Value” on any date means the average of the high and low sales prices of
the Shares on such date on the principal national securities exchange on which
such Shares are listed or admitted to trading, or if there were no reported
transaction for such date, the opening transaction price as reported by such
exchange for the first trading date following the date by which such value is
being determined on the next preceding date, or if such Shares are not so listed
or admitted to trading, the average of the high and low sales price per Share on
such date as quoted on the National Association of Securities Dealers Automated
Quotation System or such other market in which such prices are regularly quoted
or, if there have been no regularly quoted or reported high and low sales prices
with respect to Shares on such date, the Fair Market Value shall be the value
established by the Board or the Committee in good
faith. Notwithstanding the foregoing, Fair Market Value relating to
the exercise price or base price of any Non-409A Option or SAR may be determined
in any manner permitted by Code Section 409A.
“Good
Reason” means the occurrence after a Change in Control of any of the events or
conditions described in subsections (1) through (8) hereof, so long as, in the case of events or conditions described in
subsections (2) through (8) hereof, the Participant provides notice of
the existence of such breach within ninety (90) days of the Participant’s
knowledge of such breach, and the Company does not remedy such breach within
ninety (90) days of receipt of such notice:
(1) in
the case of a Participant whose employment with the Company or a Subsidiary is
subject to the terms of an employment agreement between such Participant and the
Company or Subsidiary, which employment agreement includes a definition of “Good
Reason” (or similar term), the term “Good Reason” as used in this Plan or any
Agreement shall have the meaning set forth in such employment agreement during
the period that such employment agreement remains in effect;
(2) a
change in the Participant’s status, title, position or responsibilities
(including reporting responsibilities) which represents an adverse change
7
from his
status, title, position or responsibilities as in effect at any time within
ninety (90) days preceding the date of a Change in Control or at any time
thereafter; the assignment to the Participant of any duties or responsibilities
which are inconsistent with his status, title, position or responsibilities as
in effect at any time within ninety (90) days preceding the date of a Change in
Control or at any time thereafter; or any removal of the Participant from or
failure to reappoint or reelect him to any of such offices or positions, except
in connection with the termination of his employment for Disability, Cause, as a
result of his death or by the Participant other than for Good
Reason;
(3) a
reduction in the Participant’s base salary or any failure to pay the Participant
any compensation or benefits to which he is entitled within five (5) days of
notice thereof;
(4) the
Company’s or any Subsidiary’s requiring the Participant to be based at any place
more than fifty (50) miles from the Participant’s principal place of employment,
except for reasonably required travel on the Company’s business which is not
materially greater than such travel requirements prior to the Change in Control
or relocation pursuant to a voluntary change in position;
(5) the
failure by the Company, any Subsidiary or an Affiliate to provide the
Participant with compensation and benefits, in the aggregate, at least equal (in
terms of benefit levels and/or reward opportunities) to those provided for under
each other employee benefit plan, program and practice in which the Participant
was participating at any time within ninety (90) days preceding the date of a
Change in Control or at any time thereafter;
(6) the
insolvency or the filing (by any party, including the Company) of a petition for
bankruptcy of the Company or Subsidiary, which petition is not dismissed within
sixty (60) days;
(7) any
purported termination of the Participant’s employment for Cause by the Company
which does not comply with the terms of such definition; or
(8) the
failure of the Company or Successor to obtain an agreement from any Successors
and Assigns to assume and agree to perform this Plan, as contemplated in Section
16 hereof.
Any event
or condition described in subsections (1) through (8) hereof which occurs prior
to a Change in Control but which the Participant reasonably demonstrates (A) was
at the request of a third party, or (B) otherwise arose in connection with,
or in anticipation of, a Change in Control which actually occurs, shall
constitute Good Reason for purposes of the Plan notwithstanding that it occurred
prior to the Change in Control.
“Grantee”
means a person to whom an Award has been granted under the Plan.
“Incentive
Stock Option” or “ISO” means any Option designated as an incentive stock option
within the meaning of Code Section 422 and qualifying thereunder.
8
“Nonemployee
Director” means a director of the Company who is a “non-employee director” under
Rule 16b-3 of the Exchange Act.
“Nonqualified
Stock Option” means an Option which is not an incentive stock option as defined
under Code Section 422.
“Option”
means a Nonqualified Stock Option or an ISO.
“Optionee”
means a person to whom an Option has been granted under the Plan.
“Outside
Director” means a director of the Company who is an “outside director” within
the meaning of Code Section 162(m) and the regulations promulgated
thereunder.
“Participant”
means any Eligible Individual to whom Options and/or Awards have been granted
from time to time by the Committee and any authorized transferee of such
individual.
“Performance
Awards” means Performance Units, Performance Shares or either or both of
them.
“Performance-Based
Compensation” means any Option or Award that is intended to constitute
“performance based compensation” within the meaning of Code Section 162(m)(4)(C)
and the regulations promulgated thereunder.
“Performance
Cycle” means the time period specified by the Committee in its discretion at the
time Performance Awards are granted during which the performance of the Company,
a Subsidiary or a Division will be measured.
“Performance
Objectives” has the meaning set forth in Section 10.
“Performance
Shares” means Shares issued or transferred to an Eligible Individual under
Section 10.
“Performance
Units” means Performance Units granted to an Eligible Individual under Section
10.
“Phantom
Stock” means a right granted to an Eligible Individual under Section 11 representing a number of hypothetical
Shares.
“Plan”
means this Charter Communications, Inc. 2009 Stock Incentive Plan, as amended
from time to time.
“Restricted
Stock” means Shares issued or transferred to an Eligible Individual pursuant to
Section 9.
“Restricted
Stock Unit” means an Award granted to an Eligible Individual pursuant to Section
9 pursuant to which Shares or cash in lieu thereof
may be issued in the future.
9
“Retirement”
means a termination of employment with the Company or a Subsidiary (i) after age
55, (ii) with the sum of the employee’s age and years of service equaling 70 or
more, and (iii) following one or more years of service from the date of
grant. For the purposes of this definition, “years of service” shall
include years of service with the Company, as well as any years of service with
an Affiliate or Subsidiary but only during such time as those entities are
Affiliates or Subsidiaries.
“Share
Award” means an Award of Shares granted pursuant to Section 11.
“Shares”
means the Class A Common Stock, par value $.01 per share, of the Company and any
other securities into which such shares are changed or for which such shares are
exchanged.
“Stock
Appreciation Right” or “SAR” means a right to receive all or some portion of the
increase in the value of the Shares as provided in Section 7 hereof.
“Subsidiary”
means any entity, whether or not incorporated, in which the Company, directly or
indirectly, (i) owns thirty-five percent (35%) or more of the outstanding equity
or other ownership interests, (ii) owns thirty-five percent (35%) or more of the
outstanding voting power, or (iii) has sole management
responsibility. With respect to the grant and administration of
Incentive Stock Options, “Subsidiary” shall have the meaning set forth in Code
Section 424(f).
“Successors
and Assigns” for purposes of the Plan, shall mean a corporation or other entity
acquiring all or substantially all the assets and business of the Company or a
Subsidiary whether by operation of law or otherwise, and any affiliate of such
Successors and Assigns.
“Ten
Percent Holder” means an employee (together with persons whose stock ownership
is attributed to the employee pursuant to Code Section 424(d)) who, at the time
an Option is granted, owns stock representing more than ten percent of the
voting power of all classes of stock of the Company.
“409A
Awards” means Awards that constitute a deferral of compensation under Code
Section 409A and regulations thereunder. “Non-409A Awards” means Awards other
than 409A Awards. Although the Committee retains authority under the Plan to
grant Options, SARs and Restricted Stock units on terms that will qualify those
Awards as 409A Awards, Options, SARs exercisable for Stock, and Restricted Stock
units are intended to be designed to qualify as Non-409A Awards unless otherwise
expressly specified by the Committee.
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3.
|
Administration.
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3.1. The Plan
shall be administered by the Committee, which shall hold meetings at such times
as may be necessary for the proper administration of the Plan. The
Committee shall keep minutes of its meetings. If the Committee
consists of more than one (1) member, a quorum shall consist of not fewer than
two (2) members of the Committee and a majority of a quorum may authorize any
action. Any decision or determination reduced to writing and signed
by all of the members of the Committee shall be as fully effective as if made
10
by a
majority vote at a meeting duly called and held. The Committee shall
consist of one (1) or more Directors and may consist of the entire Board;
provided, however, (A) if the Committee consists of less than the entire Board,
then with respect to any Option or Award to an Eligible Individual who is
subject to Section 16 of the Exchange Act, the Committee shall consist of at
least two (2) Directors, each of whom shall be a Nonemployee Director and (B) to
the extent necessary for any Option or Award intended to qualify as
Performance-Based Compensation to so qualify, the Committee shall consist of at
least two (2) Directors, each of whom shall be an Outside
Director. For purposes of the preceding sentence, if one or more
members of the Committee is not a Nonemployee Director and an Outside Director
but recuses himself or herself or abstains from voting with respect to a
particular action taken by the Committee, then the Committee, with respect to
that action, shall be deemed to consist only of the members of the Committee who
have not recused themselves or abstained from voting.
3.2. Subject
to applicable law, the Committee may delegate its authority under the Plan to
any other person or persons, including but not limited to, a subcommittee
comprised of one or more member(s) of the Committee, pursuant to such conditions
or limitations as the Committee may establish, and may grant authority to
officers or subcommittee members to grant Awards and/or execute agreements or
other documents on behalf of the Committee; provided that (i) the Committee may
not authorize any such officer or subcommittee member to designate himself or
herself as a recipient of any Option or Award and (ii) the resolution
authorizing any officer or subcommittee member to grant Options or Awards shall
specify the total number of Options or Awards such officer may
grant. In the event that the Committee’s authority is delegated to
officers or subcommittee members in accordance with the foregoing, all
provisions of the Plan relating to the Committee shall be interpreted in a
manner consistent with the foregoing by treating any such reference as a
reference to such individual for such purpose. Any action undertaken
in accordance with the Committee’s delegation of authority hereunder shall have
the same force and effect as if such action was undertaken directly by the
Committee and shall be deemed for all purposes of the Plan to have been taken by
the Committee.
3.3. No member
of the Committee or the Board or any person designated pursuant to Section 3.2 shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to this Plan or
any transaction hereunder. The Company hereby agrees to indemnify
each member of the Committee for all costs and expenses and, to the extent
permitted by applicable law, any liability incurred in connection with defending
against, responding to, negotiating for the settlement of or otherwise dealing
with any claim, cause of action or dispute of any kind arising in connection
with any actions in administering this Plan or in authorizing or denying
authorization to any transaction hereunder.
3.4. Subject
to the express terms and conditions set forth herein, the Committee shall have
the power and the discretion from time to time to:
(a) determine
those Eligible Individuals to whom Options shall be granted under the Plan and
the number of such Options to be granted and to prescribe the terms and
conditions (which need not be identical) of each such Option, (including, but
not limited to, the exercise or purchase price (if any), the duration of each
Option, any restriction or limitation, any vesting schedule or acceleration
thereof, or any forfeiture restrictions or waiver thereof, regarding any Option
and the Shares relating thereto, based on such factors, if any, as the
11
Committee
shall determine, in its sole discretion), and make any amendment or modification
to any Option Agreement consistent with the terms of the
Plan;
(b) select
those Eligible Individuals to whom Awards shall be granted under the Plan and to
determine the number of Shares in respect of which each Award is granted, the
terms and conditions (which need not be identical) of each such
Award (including, but not limited to, the exercise or purchase price
(if any), the duration of each Award, any restriction or limitation, any vesting
schedule or acceleration thereof, or any forfeiture restrictions or waiver
thereof, regarding any Award and the Shares relating thereto, based on such
factors, if any, as the Committee shall determine, in its sole discretion), and
make any amendment or modification to any Agreement consistent with the terms of
the Plan;
(c) to
construe and interpret the Plan and the Options and Awards granted hereunder and
to establish, amend and revoke rules and regulations for the administration of
the Plan, including, but not limited to, correcting any defect or supplying any
omission, or reconciling any inconsistency in the Plan or in any Agreement, in
the manner and to the extent it shall deem necessary or advisable, including so
that the Plan and the operation of the Plan complies with Rule 16b-3 under the
Exchange Act, the Code to the extent applicable and other applicable law, and
otherwise to make the Plan fully effective. All decisions and
determinations by the Committee in the exercise of this power shall be final,
binding and conclusive upon the Company, its Subsidiaries, the Optionees and
Grantees, and all other persons having any interest therein;
(d) to
determine the duration and purposes for leaves of absence which may be granted
to an Optionee or Grantee on an individual basis without constituting a
termination of employment or service for purposes of the Plan;
(e) to
exercise its discretion with respect to the powers and rights granted to it as
set forth in the Plan;
(f) generally,
to exercise such powers and to perform such acts as are deemed necessary or
advisable to promote the best interests of the Company with respect to the
Plan;
(g) engage an
agent to (i) maintain records of Participants and holdings under the Plan, (ii)
execute sales transactions in Shares at the direction of an Optionee or Grantee,
(iii) deliver sales proceeds as directed by an Optionee or Grantee, (iv) hold
Shares owned without restriction at the direction of the Optionee or Grantee and
(v) engage in such other activities as the Committee determines from time to
time necessary to administer the Plan; and
(h) generally,
to exercise such powers and to perform such acts as are deemed necessary or
advisable to promote the best interests of the Company with respect to the
Plan.
Notwithstanding
the foregoing, the participation of an Eligible Individual represented by a
collective-bargaining representative shall also be governed by the results of
good-faith collective bargaining and/or any collective bargaining agreement
resulting therefrom.
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4.
|
Stock Subject to the
Plan; Grant Limitations.
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12
4.1. Awards
under the Plan may be in the form 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, cash payments and such other forms as the Committee
in its discretion deems appropriate, including any combination of the
above. Unless otherwise determined by the Committee, no fractional
Shares shall be issued under the Plan nor shall any right be exercised under the
Plan with respect to a fractional Share.
4.2. Subject
to adjustment pursuant to Section 13, the maximum
number of Shares that may be made the subject of Options and Awards granted
under the Plan is 7,696,786. The Company shall reserve for the
purposes of the Plan, out of its authorized but unissued Shares or out of Shares
held in the Company’s treasury, or partly out of each, such number of Shares as
shall be determined by the Board in its discretion. The aggregate
number of Shares subject to Options and/or Stock Appreciation Rights granted
under this Plan during any calendar year to any one Participant shall not exceed
1,000,000 which number shall be calculated and adjusted pursuant to Section 13 only to the extent that such calculation or
adjustment will not affect the status of any Option and/or Award intended to
qualify as “performance-based compensation” under Code Section
162(m). The maximum number of Shares that may be granted under this
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, which number shall be calculated and adjusted pursuant to Section 13 only to the extent that such calculation or
adjustment will not affect the status of any such Performance Shares or
Performance Units intended to qualify as “performance-based compensation” under
Code Section 162(m). The aggregate number of Shares that may be
issued pursuant to the exercise of Incentive Stock Options granted under this
Plan shall not exceed 7,696,786 which number shall be calculated and adjusted
pursuant to Section 13 only to the extent that such
calculation or adjustment will not affect the status of any Option intended to
qualify as an Incentive Stock Option under Code Section 422. The maximum cash
amount payable pursuant to an Award denominated in cash and granted in any
calendar year to any Participant under this Plan that is intended to satisfy the
requirements for “performance-based compensation” under Code Section 162(m)
shall not exceed $6,000,000.
4.3. Upon the
granting of an Option or an Award, the number of Shares available under Section
4.2 for the granting of further Options and Awards
shall be reduced as follows: in connection with the granting of an
Option or an Award (other than the granting of a Performance Unit denominated in
dollars), the number of Shares shall be reduced by the number of Shares in
respect of which the Option or Award is granted or denominated; provided,
however, that (i) if any Option is exercised by tendering Shares, either
actually or by attestation, to the Company as full or partial payment of the
exercise price, the maximum number of Shares available under Section 4.2 shall be increased by the number of Shares so
tendered and (ii) upon settlement of Stock Appreciation Rights, the maximum
number of Shares available under Section 4.2 shall
be increased by the excess of (x) the number of Shares covered by portion of the
Stock Appreciation Right exercised, over (y) the number of Shares delivered in
connection with the settlement of the Stock Appreciation Right.
4.4. Whenever
any outstanding Option or Award or portion thereof expires, is canceled, is
settled in cash (including the settlement of tax withholding obligations using
Shares)
13
or is
otherwise terminated for any reason without having been exercised or payment
having been made by issuance of Shares in respect of the Option or Award, the
Shares allocable to the expired, canceled, settled or otherwise terminated
portion of the Option or Award may again be the subject of Options or Awards
granted hereunder.
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5.
|
Option Grants for
Eligible Individuals.
|
5.1. Authority of
Committee. Subject
to the provisions of the Plan, the Committee shall have full and final authority
to select those Eligible Individuals who will receive Options, and the terms and
conditions of the grant to such Eligible Individuals shall be set forth in an
Agreement. An Award of Options may include Incentive Stock Options,
Non-Qualified Stock Options, or a combination thereof; provided, however, that
an Incentive Stock Option may only be granted to an employee of the Company or a
Subsidiary and no Incentive Stock Option shall be granted more than ten years
after the earlier of (i) the date this Plan is adopted by the Board or (ii) the
date this Plan is approved by the Company’s shareholders.
5.2. Exercise
Price. Subject
to Section 6.5, the purchase price or the manner in
which the exercise price is to be determined for Shares under each Option shall
be determined by the Committee in its discretion and set forth in the Agreement;
provided, however, unless otherwise determined by the Committee, the exercise
price per Share under each Option shall not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date the Option is granted
unless the Options are substituted for options issued by another company where
the Company or a Subsidiary acquires (whether by purchase, merger, or otherwise)
all or substantially all of outstanding capital stock or assets of another
company or in the event of any reorganization or other transaction qualifying
under Code Section 424.
5.3. Maximum
Duration. Options
granted hereunder shall be for such term as the Committee shall determine in its
discretion, provided that an Option shall not be exercisable after the
expiration of ten (10) years from the date it is granted. Unless the
Committee provides otherwise in the Agreement or in an employment agreement
between the Optionee and the Company, subject to the preceding sentence in this
Section 5.3, an Option (i) may, upon the death,
Disability or Retirement of the Optionee prior to the expiration of the Option,
be exercised for up to two (2) years following the date of the Optionee’s death,
Disability or Retirement, as applicable, but in any event no later than the
original expiration date, (ii) may, following the voluntary termination of
service by the Optionee or a termination other than for Cause, be exercised for
up to sixty (60) days following the date of termination, but in any event no
later than the original expiration date, and (iii) shall, in the event of a
termination of service for Cause, be terminated effective immediately prior to
such termination, whether or not such Option was then exercisable and, provided
further, that termination for this purpose is the later of (x) with respect to
an Optionee who upon termination of employment as an employee remains an
Eligible Individual shall occur only when the Optionee is no longer an Eligible
Individual and (y) with respect to an Optionee who is receiving severance
payments shall occur when such payments cease, provided Optionee enters into a
release in the form acceptable to the Company. The Committee may, in its
discretion, subsequent to the granting of any Option, extend the term thereof,
but in no event shall the term as so extended exceed the maximum term provided
for in the first sentence hereof.
14
5.4. Vesting. Subject
to Section 6.4 addressing the effect of a Change in
Control, each Option shall entitle the Eligible Individual to purchase, in whole
at any time or in part from time to time, twenty-five percent (25%) of the total
number of Shares covered by the Option as of the first anniversary of the date
of grant and an additional twenty-five percent (25%) of the total number of
Shares covered by the Option after the expiration of each of the second, third
and fourth anniversaries of the date of grant while the Optionee is an Eligible
Individual; provided however, that Options (i) may become exercisable in such
other installments (which need not be equal) and at such times as may be
designated by the Committee in its discretion and set forth in the Agreement and
(ii) unless the Committee provides otherwise in the Agreement or in an
employment agreement between the Optionee and the Company, shall continue to
vest only while the Optionee is an Eligible
Individual. Notwithstanding the foregoing, the vesting of any Option
shall continue during the period the Optionee is receiving severance payments
provided Optionee enters into a release in the form acceptable to the
Company. To the extent not exercised, installments shall accumulate
and be exercisable, in whole or in part, at any time after becoming exercisable,
but not later than the date the Option expires. The Committee may, in
its discretion permit the continued vesting or, accelerate the exercisability of
any Option or portion thereof at any time.
5.5. Option
Repricing. Notwithstanding
anything contained in this Plan to the contrary, the Committee may, in its sole
discretion, approve an Option repricing without stockholder
approval. For the purposes of the preceding sentence, an “Option
repricing” shall 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, by any other method repricing or replacing any
outstanding Option, or taking any other action deemed to be a “repricing” under
the rules of the national securities exchange or other market on which the
Shares are listed or admitted to trading.
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6.
|
Terms and Conditions
Applicable to All Options.
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6.1. Non-Transferability.
(a) No Option
shall be transferable by the Optionee otherwise than by will or by the laws of
descent and distribution or pursuant to a domestic relations order (within the
meaning of Rule 16a-12 promulgated under the Exchange Act), and an Option shall
be exercisable during the lifetime of such Optionee only by the Optionee or his
or her guardian or legal representative. Notwithstanding the
foregoing, the Committee may, in its discretion, set forth in the Agreement
evidencing an Option at the time of grant or thereafter, that the Option may be
transferred to members of the Optionee’s immediate family, to trusts solely for
the benefit of such immediate family members and to partnerships in which such
family members and/or trusts are the only partners, and for purposes of this
Plan, a transferee of an Option shall be deemed to be the
Optionee. For this purpose, immediate family means the Optionee’s
spouse, parents, children, stepchildren and grandchildren and the spouses of
such parents, children, stepchildren and grandchildren. The terms of
an Option shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs and successors of the Optionee.
15
(b) Notwithstanding
anything to the contrary herein, including, without limitation, the provisions
of Section 5.3, if an Option has been transferred
in accordance with this Section 6.1, the Option
shall be exercisable solely by the transferee. The Option shall
remain subject to the provisions of the Plan, including that it shall be
exercisable only to the extent that the Optionee or Optionee’s estate would have
been entitled to exercise it if the Optionee had not transferred the
Option. Unless otherwise provided in the Optionee’s Agreement, in the
event of the death of the Optionee prior to the expiration of the right to
exercise the transferred Option, the period during which the Option shall be
exercisable shall terminate on the date one (1) year following the date of the
Optionee’s death. In the event of the death of the transferee prior
to the expiration of the right to exercise the Option, the period during which
the Option shall be exercisable by the executors, administrators, legatees and
distributees of the transferee’s estate, as the case may be, shall terminate on
the date one (1) year following the date of the transferee’s
death. In no event, however, shall the Option be exercisable after
the expiration of the Option period set forth in the terms and conditions of the
Agreement. The Option shall be subject to such other rules as the
Committee shall determine in its discretion.
6.2. Method of
Exercise. The
exercise of an Option shall be made only by a written notice delivered in
person, electronically or by mail to the Company (or its designee) specifying
the number of Shares to be exercised and, to the extent applicable, accompanied
by payment therefor and otherwise in accordance with the Agreement pursuant to
which the Option was granted; provided, however, that Options may not be
exercised by an Optionee for six (6) months following a hardship distribution to
the Optionee, to the extent such exercise is prohibited under Treasury
Regulation § 1.401(k)-1(d)(3)(B)(2)(iv)(E)(2). The exercise price for
any Shares purchased pursuant to the exercise of an Option shall be paid, in any
of the following forms (or any combination thereof): (a) cash, (b) the transfer
of Shares, either actually or by attestation, to the Company, such transfer to
be upon such terms and conditions as determined by the Committee in its
discretion, (c) withholding of Shares deliverable upon exercise or (d) a
combination of any of the foregoing or such other methods as determined by the
Committee in its discretion; provided, however, that the Committee may determine
at any time in its discretion that the exercise price shall be paid only in
cash. In addition, if Shares are regularly traded on an established
securities market at the time of exercise, Options may be exercised through a
registered broker-dealer pursuant to such “same day sale” procedures which are,
from time to time, deemed acceptable by the Committee in its
discretion. Any Shares transferred to or withheld by the Company as
payment of the exercise price under an Option shall be valued at their Fair
Market Value on the date of exercise of such Option. If requested by
the Committee in its discretion, the Optionee shall deliver the Agreement
evidencing the Option to the Company (or its designee) who shall endorse thereon
a notation of such exercise and return such Agreement to the
Optionee. Unless otherwise determined by the Committee in its
discretion, no fractional Shares (or cash in lieu thereof) shall be issued upon
exercise of an Option and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
6.3. Rights of
Optionees. No
Optionee shall be deemed for any purpose to be the owner of any Shares subject
to any Option unless and until (a) the Option shall have been exercised pursuant
to the terms thereof, (b) the Company shall have issued and delivered Shares to
the Optionee, and (c) the Optionee’s name shall have been entered as a
stockholder of record on the books of the Company. Thereupon, the
Optionee shall have full voting, dividend and
16
other
ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.
6.4. Effect of Change in
Control. Notwithstanding
any other provision contained in this Plan, except as otherwise provided in an
Agreement or employment agreement between the Optionee and the Company, in the
event of a Change in Control, any unvested Options issued under this Plan to any
Optionee shall vest and become fully exercisable, subject to the provisions of
Section 12.2, upon (i) the termination by the
Company, Subsidiary, or Affiliate of the Optionee’s employment other than for
Cause during the thirteen (13) month period following the Change in
Control (taking into account the deemed termination provisions of the last
paragraph of such definition) or (ii) the termination of the Optionee’s
employment for Good Reason, during the thirteen (13) month period
following the Change in Control (taking into account the deemed termination
provisions of the last paragraph of such definition). Except as
otherwise provided in an employment agreement between the Optionee and the
Company, in the event of a Change in Control, the Committee may, in its
discretion, do one or more of the following: (i) shorten the period
during which Options are exercisable (provided they remain exercisable for at
least thirty (30) days after the date on which notice of such shortening is
given to the Optionees); (ii) arrange to have the surviving or successor entity
assume the Options or grant replacement options with appropriate adjustments in
the Option prices and adjustments in the number and kind of securities issuable
upon exercise so that the options or their replacements either (A) represent the
right to purchase the shares of stock, securities or other property (including
cash) as may be issuable or payable as a result of a Change in Control with
respect to or in exchange for the number of Shares purchasable and receivable
upon the exercise of the Options had such exercise occurred in full prior to
such Change in Control, or (B) represent the right to purchase equity securities
of such surviving or successor entity, but only if such equity securities are
actively traded on an established securities market or (iii) cancel the Options
upon the payment to the Optionee in cash and/or securities of the surviving or
successor entity (but only if such securities are actively traded on an
established securities market) with respect to each Option to the extent then
exercisable (including any Options as to which the exercise has been accelerated
in accordance with this Section 6.4), of an amount
that is equal to the Fair Market Value of the Shares subject to the Option or
portion thereof over the aggregate exercise price for such Shares under the
Option or portion thereof surrendered at the effective time of the Change in
Control. The Committee may, in its discretion, also provide for one
or more of the foregoing alternatives in any particular Option
Agreement.
6.5. ISOs. Notwithstanding
anything to the contrary in Section 5 and this
Section 6, in the case of the grant of an Option
intending to quality as an ISO: (i) if the Optionee is a Ten Percent Holder, the
purchase price of such Option must be at least one hundred and ten percent
(110%) of the Fair Market Value of the Shares on the date of grant and the
Option must expire within a period of not more than five (5) years from the date
of grant, and (ii) termination of employment will occur when the person to whom
an ISO was granted ceases to be an employee (as determined in accordance with
Code Section 3401(c) and the regulations promulgated thereunder) of the Company
and its Subsidiaries. Notwithstanding anything in Section 5 and this Section 6 to
the contrary, Options designated as ISOs shall not be eligible for treatment
under the Code as ISOs to the extent that either (a) the aggregate Fair Market
Value of Shares (determined as of the time of grant) with respect to which such
Options are exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and
17
any
Subsidiary) exceeds $100,000, taking Options into account in the order in which
they were granted, or (b) such Options otherwise remain exercisable but are not
exercised within three (3) months of termination of employment (or such other
period of time provided in Code Section 422). Should any Option
granted under this Plan be designated an “Incentive Stock Option,” but fail, for
any reason, to meet the requirements of the Code for such a designation, then
such Option shall be deemed to be a Non-Qualified Stock Option and shall be
valid as such according to its terms.
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7.
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Stock Appreciation
Rights.
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The
Committee may, in its discretion, either alone or in connection with the grant
of an Option, grant Stock Appreciation Rights in accordance with the Plan, the
terms and conditions of which shall be set forth in an Agreement. If
granted in connection with an Option, a Stock Appreciation Right shall cover the
same Shares covered by the Option (or such lesser number of Shares as the
Committee may determine in its discretion) and shall, except as provided in this
Section 7, be subject to the same terms and
conditions as the related Option.
7.1. Time of
Grant. A
Stock Appreciation Right may be granted (a) at any time if unrelated to an
Option, or (b) if related to an Option, either at the time of grant or at any
time thereafter during the term of the Option.
7.2. Stock Appreciation Right
Related to an Option.
(a) Exercise. A
Stock Appreciation Right granted in connection with an Option shall be
exercisable at such time or times and only to the extent that the related
Options are exercisable, and will not be transferable except to the extent the
related Option may be transferable.
(b) Amount
Payable. Upon the exercise of a Stock Appreciation Right
related to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (i) the excess of the Fair Market Value of a Share on
the date preceding the date of exercise of such Stock Appreciation Right over
the per Share exercise price under the related Option, by (ii) the number of
Shares as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Committee may, in its
discretion, limit in any manner the amount payable with respect to any Stock
Appreciation Right by including such a limit in the Agreement evidencing the
Stock Appreciation Right at the time it is granted.
(c) Treatment of Related Options
and Stock Appreciation Rights Upon Exercise. Upon the exercise
of a Stock Appreciation Right granted in connection with an Option, the Option
shall be canceled to the extent of the number of Shares as to which the Stock
Appreciation Right is exercised, and upon the exercise of an Option granted in
connection with a Stock Appreciation Right, the Stock Appreciation Right shall
be canceled to the extent of the number of Shares as to which the Option is
exercised or surrendered.
7.3. Stock
Appreciation Right Unrelated to an Option.The
Committee may, in its discretion, grant to Eligible Individuals Stock
Appreciation Rights unrelated to Options. Stock Appreciation Rights
unrelated to Options shall contain such terms and conditions as to
exercisability (subject to Section 7.7), vesting
and duration as the Committee shall determine in
18
its
discretion, but in no event shall they have a term of greater than ten (10)
years. Unless the Committee provides otherwise in the Agreement or in
an employment agreement between the Grantee and the Company, subject to the
preceding sentence in this Section 7.3, a Stock
Appreciation Right (i) may, upon the death, Disability or Retirement of the
Grantee prior to the expiration of the Stock Appreciation Right, be exercised
for up to two (2) years following the date of the Grantee’s death, Disability or
Retirement, but in any event no later than the expiration date, as applicable,
(ii) may, following the voluntary termination of service by the Grantee or a
termination other than for Cause, be exercised for up to sixty (60) days
following the date of termination, but in any event no later than the expiration
date, and (iii) shall, in the event of a termination of service for Cause, be
terminated effective immediately prior to such termination, whether or not such
Stock Appreciation Right was then exercisable. Upon exercise of a
Stock Appreciation Right unrelated to an Option, the Grantee shall be entitled
to receive an amount determined by multiplying (a) the excess of the Fair Market
Value of a Share on the date preceding the date of exercise of such Stock
Appreciation Right over the Fair Market Value of a Share on the date the Stock
Appreciation Right was granted, by (b) the number of Shares as to which the
Stock Appreciation Right is being exercised.
7.4. Non-Transferability. No
Stock Appreciation Right shall be transferable by the Grantee otherwise than by
will or by the laws of descent and distribution or pursuant to a domestic
relations order (within the meaning of Rule 16a-12 promulgated under the
Exchange Act), and such Stock Appreciation Right shall be exercisable during the
lifetime of such Grantee only by the Grantee or his or her guardian or legal
representative. The terms of such Stock Appreciation Right shall be
final, binding and conclusive upon the beneficiaries, executors, administrators,
heirs and successors of the Grantee.
7.5. Method of
Exercise. Stock
Appreciation Rights shall be exercised by a Grantee only by a written notice
delivered in person, electronically or by mail to the Company (or its designee)
specifying the number of Shares with respect to which the Stock Appreciation
Right is being exercised. If requested by the Committee in its
discretion, the Grantee shall deliver the Agreement evidencing the Stock
Appreciation Right being exercised and the Agreement evidencing any related
Option to the Company (or its designee) who shall endorse thereon a notation of
such exercise and return such Agreement to the Grantee.
7.6. Form of
Payment. Payment
of the amount determined under Sections 7.2(b) or
7.3 may be made in the discretion of the Committee
solely in whole Shares in a number determined at their Fair Market Value on the
date preceding the date of exercise of the Stock Appreciation Right, or solely
in cash, or in a combination of cash and Shares. If the Committee, in
its discretion, decides to make full payment in Shares and the amount payable
results in a fractional Share, payment for the fractional Share will be made in
cash.
7.7. Effect of Change in
Control. Notwithstanding
any other provision contained in this Plan, except as otherwise provided in an
Agreement or employment agreement between the Grantee and the Company, in the
event of a Change in Control, any unvested Stock Appreciation Rights issued
under this Plan to any Grantee shall vest and become fully exercisable, subject
to the provisions of Section 12.2, upon (i) the
termination by the Company, Subsidiary, or Affiliate of the Grantee’s employment
other than for Cause, during the thirteen (13) month period following
the Change in Control (taking into account the deemed termination provisions of
the last paragraph of such definition) or (ii) the termination of the Grantee’s
employment for Good Reason, during the thirteen (13) month period
following the Change in Control (taking into account the deemed termination
19
provisions
of the last paragraph of such definition). Except as otherwise
provided in an employment agreement between the Grantee and the Company, in the
event of a Change in Control, the Committee may, in its discretion, do one or
more of the following: (i) shorten the period during which Stock
Appreciate Rights are exercisable (provided they remain exercisable for at least
thirty (30) days after the date on which notice of such shortening is given to
the Grantees); (ii) arrange to have the surviving or successor entity assume the
Stock Appreciation Rights or grant replacement Stock Appreciation Rights with
appropriate adjustments so that the Stock Appreciation Rights or their
replacements represent the right to receive cash as may be payable as a result
of a Change in Control with respect to the amount of cash receivable upon the
exercise of the Stock Appreciation Rights had such exercise occurred in full
prior to such Change in Control, or (iii) cancel Stock Appreciation Rights upon
the payment to the Grantees in cash and/or securities of the surviving or
successor entity (but only if such securities are actively traded on an
established securities market) with respect to each Stock Appreciation Rights to
the extent then exercisable (including any Stock Appreciation Rights as to which
the exercise has been accelerated in accordance with this Section 7.7), of an amount that is equal to the Fair Market
Value of the Shares subject to the Stock Appreciation Right or portion thereof
over the aggregate exercise price for such Shares under the Stock Appreciation
Right or portion thereof surrendered at the effective time of the Change in
Control. The Committee may, in its discretion, also provide for one
or more of the foregoing alternatives in any particular
Agreement.
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8.
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Dividend Equivalent
Rights.
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Dividend
Equivalent Rights may be granted to Eligible Individuals in tandem with an
Option or Award or as a separate Award. The terms and conditions
applicable to each Dividend Equivalent Right shall be specified in the Agreement
under which the Dividend Equivalent Right is granted. Amounts payable
in respect of Dividend Equivalent Rights may be payable currently or deferred
until the lapsing of restrictions on such Dividend Equivalent Rights or until
the vesting, exercise, payment, settlement or other lapse of restrictions on the
Option or Award to which the Dividend Equivalent Rights relate. In
the event that the amount payable in respect of Dividend Equivalent Rights is to
be deferred, the Committee shall, in its discretion, determine whether such
amount is to be held in cash or reinvested in Shares or deemed (notionally) to
be reinvested in Shares. If amounts payable in respect of Dividend
Equivalent Rights are to be held in cash, there may be credited at the end of
each year (or portion thereof) interest on the amount of the account at the
beginning of the year at a rate per annum as the Committee may, in its
discretion, determine. Dividend Equivalent Rights may be settled in
cash or Shares or a combination thereof, in a single installment or multiple
installments as the Committee, in its discretion, determines.
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9.
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Restricted Stock and
Restricted Stock Units.
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9.1. Grant. The
Committee may, in its discretion, grant Awards to Eligible Individuals of
Restricted Stock and/or Restricted Stock Units, which shall be evidenced by an
Agreement. Restricted Stock is a grant or issuance of Shares the
retention, vesting and/or transferability of which is subject during specified
periods of time to such conditions (including
20
continued
employment or performance conditions) and terms as the Committee deems
appropriate. Restricted Stock Units are Awards denominated in units of Shares
under which the issuance of Shares is subject to such conditions (including
continued employment or performance conditions) and terms as the Committee deems
appropriate. Each Agreement shall contain such restrictions, terms and
conditions as the Committee may, in its discretion, determine and (without
limiting the generality of the foregoing) such Agreements may require that an
appropriate legend be placed on Share certificates of Restricted
Stock. For example, the Committee may determine that some or all
certificates representing Shares of Restricted Stock shall bear the following
legend: “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VESTING
CONDITIONS AND CERTAIN RESTRICTIONS ON TRANSFER, SALE AND HYPOTHECATION AND
CERTAIN REPURCHASE RIGHTS. A COMPLETE STATEMENT OF THE TERMS AND
CONDITIONS GOVERNING SUCH RESTRICTIONS IS SET FORTH IN THE CHARTER
COMMUNICATIONS, INC. 2009 STOCK INCENTIVE PLAN AND IN A RESTRICTED STOCK AWARD
AGREEMENT. A COPY OF THE PLAN AND AWARD AGREEMENT ARE ON FILE AT THE
CORPORATION’S PRINCIPAL OFFICE.” Awards of Restricted Stock and
Restricted Stock Units shall be subject to the terms and provisions set forth
below in this Section 9.
9.2. Rights of
Grantee. Shares
of Restricted Stock granted pursuant to an Award hereunder shall be issued in
the name of the Grantee as soon as reasonably practicable after the Award is
granted provided that the Grantee, to the extent required by the Committee and
in the manner specified by the Committee, has executed an Agreement evidencing
the Award, the appropriate blank stock powers and, in the discretion of the
Committee, an escrow agreement and any other documents which the Committee may,
in its discretion, require as a condition to the issuance of such
Shares. If a Grantee shall fail, to the extent required by the
Committee, to execute the Agreement evidencing a Restricted Stock Award, or any
documents which the Committee may, in its discretion, require within the time
period prescribed by the Committee at the time the Award is granted, the Award
shall be null and void. At the discretion of the Committee, Shares
issued in connection with a Restricted Stock Award shall be deposited together
with the stock powers with an escrow agent (which may be the Company) designated
by the Committee. Unless the Committee in its discretion determines
otherwise and as set forth in the Agreement, upon delivery of the Shares to the
escrow agent, the Grantee shall have all of the rights of a stockholder with
respect to such Shares, including the right to vote the Shares and to receive
all dividends or other distributions paid or made with respect to the
Shares. Participants shall have no rights as a stockholder with
respect to Shares underlying Restricted Stock Units unless and until such Shares
are reflected as issued and outstanding Shares on the Company’s stock
ledger.
9.3. Non-Transferability. Until
all restrictions upon the Shares of Restricted Stock awarded to a Grantee shall
have lapsed in the manner set forth in Section 9.4,
such Shares shall not be sold, transferred or otherwise disposed of and shall
not be pledged or otherwise hypothecated. No Restricted Stock Unit
shall be transferable by the Optionee otherwise than by will or by the laws of
descent and distribution or pursuant to a domestic relations order (within the
meaning of Rule 16a-12 promulgated under the Exchange Act).
21
9.4. Lapse of
Restrictions.
(a) Generally. Restrictions
upon Shares of Restricted Stock awarded hereunder shall lapse, and Restricted
Stock Units shall vest, at such time or times and on such terms and conditions
as the Committee may determine in its discretion. The Agreement
evidencing the Award shall set forth any such restrictions.
(b) Effect of Change in
Control. Notwithstanding any other provision contained in this
Plan, except as otherwise provided in an Agreement or employment agreement
between the Grantee and the Company, in the event of a Change in Control, any
restrictions with respect to Restricted Stock issued under this Plan to any
Grantee shall lapse and Restricted Stock Units issued under this Plan to any
Grantee shall vest, subject to the provisions of Section 12.2, upon (i) the termination by the Company,
Subsidiary, or Affiliate of the Optionee’s employment other than for Cause,
during the thirteen (13) month period following the Change in Control
(taking into account the deemed termination provisions of the last paragraph of
such definition) or (ii) the termination of the Optionee’s employment for Good
Reason, during the thirteen (13) month period following the Change in Control
(taking into account the deemed termination provisions of the last paragraph of
such definition). Except as otherwise provided in an employment
agreement between the Grantee and the Company, in the event of a Change in
Control, the Committee may, in its discretion, do one or more of the
following: (i) arrange to have the surviving or successor entity
assume the Restricted Stock or Restricted Stock Units or grant replacement
Restricted Stock or Restricted Stock Units with appropriate adjustments in the
number and kind of securities so that the Restricted Stock or Restricted Stock
Unit Award or its replacement either (x) represents the right to receive cash or
Shares as may be payable as a result of a Change in Control with respect to the
amount of cash or Shares receivable upon the lapse of the restrictions on the
Restricted Stock or Restricted Stock Units had such lapse occurred prior to such
Change in Control, or (y) represents the right to the equity securities of the
surviving or successor entity, but only if such equity securities are actively
traded on an established securities market, or (ii) cancel the Restricted Stock
or Restricted Stock Unit Award upon the payment to the Grantees in cash and/or
securities of the surviving or successor entity (but only if such securities are
actively traded on an established securities market), with respect to each
Restricted Stock and Restricted Stock Unit Award to the extent then lapsed
(including any Restricted Stock and Restricted Stock Units as to which the lapse
of restrictions has been accelerated in accordance with this Section 9.4(b)), of an amount
that is equal to the Fair Market Value of the Shares subject to the Restricted
Stock or Restricted Stock Unit Award surrendered at the effective time of the
Change in Control. The Committee may, in its discretion, also provide
for one or more of the foregoing alternatives in any particular
Agreement.
9.5. Treatment of
Dividends. At
the time an Award of Shares of Restricted Stock is granted, the Committee may,
in its discretion, determine that the payment to the Grantee of dividends, or a
specified portion thereof, declared or paid on such Shares by the Company shall
be (a) deferred until the lapsing of the restrictions imposed upon such Shares
and (b) held by the Company for the account of the Grantee until such
time. In the event that dividends are to be deferred, the Committee
shall, in its discretion, determine whether such dividends are to be reinvested
in Shares (which shall be held as additional Shares of Restricted Stock) or held
in cash, or, if such dividends are paid in Shares, whether the Shares shall be
deposited with the Company and subject to the same restrictions on
transferability and forfeitability as the Shares of
22
Restricted
Stock with respect to which they were paid. If deferred dividends are
to be held in cash, there may be credited at the end of each year (or portion
thereof) interest on the amount of the account at the beginning of the year at a
rate per annum as the Committee may, in its discretion,
determine. Payment of deferred dividends in respect of Shares of
Restricted Stock (whether held in cash or as additional Shares of Restricted
Stock), together with interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Shares in respect of which the deferred
dividends were paid, and any dividends deferred (together with any interest
accrued thereon) in respect of any Shares of Restricted Stock shall be forfeited
upon the forfeiture of such Shares. Shares underlying Restricted
Stock Units shall be entitled to dividends or dividend equivalents only to the
extent and under the terms provided by the Committee.
9.6. Delivery of
Shares. Upon
the lapse of the restrictions on Shares of Restricted Stock and upon the vesting
of Restricted Stock Units, the Committee shall cause a stock certificate to be
promptly delivered to the Grantee with respect to such Shares, free of the
restrictions set forth in this Section 9. Notwithstanding the foregoing, the
Committee may impose such additional restrictions as it may deem advisable,
including, but not limited to, restrictions related to applicable federal
securities laws, the requirements of any national securities exchange or system
upon which Shares are then listed or traded, or any blue sky or state securities
laws.
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10.
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Performance
Awards.
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10.1. Performance
Units. The
Committee may, in its discretion, grant Awards of Performance Units to Eligible
Individuals, the terms and conditions of which shall be set forth in an
Agreement. Performance Units may be denominated in Shares or a
specified dollar amount and, contingent upon the attainment of specified
Performance Objectives within the Performance Cycle, represent the right to
receive payment as provided in Section 10.3(c) of
(i) in the case of Share-denominated Performance Units, the Fair Market Value of
a Share on the date the Performance Unit was granted, the date the Performance
Unit became vested or any other date specified by the Committee in its
discretion, (ii) in the case of dollar-denominated Performance Units, the
specified dollar amount or (iii) a percentage (which may be more than one
hundred percent (100%)) of the amount described in clause (i) or (ii) depending
on the level of Performance Objective attainment; provided, however, that, the
Committee may, in its discretion, at the time a Performance Unit is granted
specify a maximum amount payable in respect of a vested Performance
Unit. Each Agreement shall specify the number of Performance Units to
which it relates, the Performance Objectives which must be satisfied in order
for the Performance Units to vest and the Performance Cycle within which such
Performance Objectives must be satisfied.
(a) Vesting and
Forfeiture. Subject to Sections 10.3(c) and 10.4, a
Grantee shall become vested with respect to the Performance Units to the extent
that the Performance Objectives set forth in the Agreement are satisfied for the
Performance Cycle.
(b) Payment of
Awards. Subject to Section 10.3(c), payment to Grantees in respect of vested
Performance Units shall be made as soon as practicable after the last day of the
Performance Cycle to which such Award relates unless the Agreement evidencing
the Award provides for the deferral of payment, in which event the terms and
conditions of the deferral shall
23
be set
forth in the Agreement. Subject to Section 10.4, such payments may be made entirely in Shares
valued at their Fair Market Value, entirely in cash, or in such combination of
Shares and cash as the Committee shall, in its discretion, determine at any time
prior to such payment; provided, however, that if the Committee in its
discretion determines to make such payment entirely or partially in Shares of
Restricted Stock, the Committee must determine the extent to which such payment
will be in Shares of Restricted Stock and the terms of such Restricted Stock at
the time the Award is granted.
10.2. Performance
Shares. The
Committee may, in its discretion, grant Awards of Performance Shares to Eligible
Individuals, the terms and conditions of which shall be set forth in an
Agreement. Each Agreement may require that an appropriate legend be
placed on Share certificates. Awards of Performance Shares shall be
subject to the following terms and provisions:
(a) Rights of
Grantee. The Committee shall provide at the time an Award of
Performance Shares is made the time or times at which the actual Shares
represented by such Award shall be issued in the name of the Grantee; provided,
however, that no Performance Shares shall be issued until the Grantee has, to
the extent required by the Committee and in the manner specified by the
Committee, executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the discretion of the Committee, an escrow agreement and
any other documents which the Committee may require as a condition to the
issuance of such Performance Shares. If a Grantee shall fail, to the
extent required by the Committee, to execute the Agreement evidencing an Award
of Performance Shares, the appropriate blank stock powers and, in the discretion
of the Committee, an escrow agreement and any other documents which the
Committee may require within the time period prescribed by the Committee at the
time the Award is granted, the Award shall be null and void. At the
discretion of the Committee, Shares issued in connection with an Award of
Performance Shares shall be deposited together with the stock powers with an
escrow agent (which may be the Company) designated by the
Committee. Except as restricted by the terms of the Agreement, upon
delivery of the Shares to the escrow agent, the Grantee shall have, in the
discretion of the Committee, all of the rights of a stockholder with respect to
such Shares, including the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.
(b) Non-Transferability. Until
any restrictions upon the Performance Shares awarded to a Grantee shall have
lapsed in the manner set forth in Sections 10.2(c) or 10.4, such
Performance Shares shall not be sold, transferred or otherwise disposed of and
shall not be pledged or otherwise hypothecated, nor shall they be delivered to
the Grantee. The Committee may, in its discretion, also impose such
other restrictions and conditions on the Performance Shares, if any, as it deems
appropriate.
(c) Lapse of
Restrictions. Subject to Sections 10.3(c) and 10.4,
restrictions upon Performance Shares awarded hereunder shall lapse and such
Performance Shares shall become vested at such time or times and on such terms,
conditions and satisfaction of Performance Objectives as the Committee may, in
its discretion, determine at the time an Award is granted.
24
(d) Treatment of
Dividends. At the time the Award of Performance Shares is
granted, the Committee may, in its discretion, determine that the payment to the
Grantee of dividends, or a specified portion thereof, declared or paid on Shares
represented by such Award which have been issued by the Company to the Grantee
shall be (i) deferred until the lapsing of the restrictions imposed upon such
Performance Shares and (ii) held by the Company for the account of the Grantee
until such time. In the event that dividends are to be deferred, the
Committee shall determine whether such dividends are to be reinvested in Shares
(which shall be held as additional Performance Shares) or held in cash or, if
such dividends are paid in Shares, whether the Shares shall be deposited with
the Company and subject to the same restrictions on transferability and
forfeitability as the Performance Shares with respect to which they were
paid. If deferred dividends are to be held in cash, there may be
credited at the end of each year (or portion thereof) interest on the amount of
the account at the beginning of the year at a rate per annum as the Committee
may, in its discretion, determine. Payment of deferred dividends in
respect of Performance Shares (whether held in cash or in additional Performance
Shares), together with interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Performance Shares in respect of which
the deferred dividends were paid, and any dividends deferred (together with any
interest accrued thereon) in respect of any Performance Shares shall be
forfeited upon the forfeiture of such Performance Shares.
(e) Delivery of
Shares. Upon the lapse of the restrictions on Performance
Shares awarded hereunder, the Committee shall cause a stock certificate to be
delivered to the Grantee with respect to such Shares, free of all restrictions
hereunder.
10.3. Performance
Objectives
(a) Establishment. Performance
Objectives for Performance Awards may be based on and expressed in terms of one
or more of the following business criteria: (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: (i) the performance of
the Company, (ii) the performance of any of its Subsidiaries, (iii) the
performance of any of its Divisions, (iv) a per Share basis, (v) a per
subscriber basis, or (vi) any combination of the
foregoing. Performance Objectives may be absolute or relative (to
prior performance of the Company or to the performance of one or more other
entities or external indices) and may be expressed in terms of a progression
within a specified range. The formula for determining Performance
Objectives may 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. The Performance Objectives with respect to
a Performance Cycle shall be established in writing by the Committee by the
earlier of (x) the date on which a quarter of the Performance Cycle has elapsed
or (y) the date which is ninety (90) days after the commencement of the
Performance Cycle, and in any event while the performance relating to the
Performance Objectives remain substantially uncertain.
25
(b) Effect of Certain
Events. At the time of the granting of a Performance Award, or
at any time thereafter, in either case to the extent permitted under Code
Section 162(m) and the regulations thereunder without adversely affecting the
treatment of the Performance Award as Performance-Based Compensation, the
Committee may, in its discretion, provide for the manner in which performance
will be measured against the Performance Objectives (or may adjust the
Performance Objectives) to reflect the impact of specified corporate
transactions, accounting or tax law changes and other extraordinary or
nonrecurring events.
(c) Determination of
Performance. Prior to the vesting, payment, settlement or
lapsing of any restrictions with respect to any Performance Award that is
intended to constitute Performance-Based Compensation made to a Grantee who is
subject to Code Section 162(m), the Committee shall certify in writing that the
applicable Performance Objectives have been satisfied to the extent necessary
for such Award to qualify as Performance Based Compensation.
10.4. Effect of Change in
Control. In
the event of a Change in Control, unless otherwise determined by the Committee
in its discretion and set forth in the Agreement evidencing the Award or in an
employment agreement between the Grantee and the Company, and subject to the
provisions of Section 12.2, upon (i) the
termination by the Company, Subsidiary, or Affiliate of the Optionee’s
employment other than for Cause, during the thirteen (13) month period following
the Change in Control (taking into account the deemed termination provisions of
the last paragraph of such definition) or (ii) the termination of the Optionee’s
employment for Good Reason, during the thirteen (13) month period following the
Change in Control (taking into account the deemed termination provisions of the
last paragraph of such definition).
(a) With
respect to Performance Units, the Grantee shall (i) become vested in all
outstanding Performance Units as if all Performance Objectives had been
satisfied at the maximum level and (ii) be entitled to receive in respect of all
Performance Units which become vested as a result of a Change in Control a cash
payment within ten (10) days after termination of employment.
(b) With
respect to Performance Shares, all restrictions shall lapse immediately on all
outstanding Performance Shares as if all Performance Objectives had been
satisfied at the maximum level.
(c) The
Agreements evidencing Performance Shares and Performance Units shall provide for
the treatment of such Awards (or portions thereof), if any, which do not become
vested as the result of a Change in Control, including, but not limited to,
provisions for the adjustment of applicable Performance Objectives.
(d) Notwithstanding
the above, except as otherwise provided in an Agreement or employment agreement
between the Grantee and the Company, the Committee may, in its discretion, do
one or more of the following: (i) arrange to have the surviving or
successor entity assume the Performance Units or Performance Shares or grant
replacement Performance Units or Performance Shares, as applicable, with
appropriate adjustments so that such Awards or their
26
replacements
either (x) represent the right to receive cash or Shares as may be payable as a
result of a Change in Control with respect to the amount of cash or Shares
receivable upon the vesting of the Performance Units or Performance Shares had
such vesting occurred in full prior to such Change in Control, or (y) represent
the right to receive equity securities of the surviving or successor entity, but
only if such equity securities are actively traded on an established securities
market, or (ii) cancel the Performance Units or Performance Shares upon the
payment to the Grantees in cash with respect to each such Award to the extent
then otherwise payable in cash and/or securities of the surviving or successor
entity (but only if such securities are actively traded on an established
securities market) or in Shares (including any Awards as to which vesting or
lapse of restrictions has taken place in accordance with (a) and (b) of this
Section 10), of an amount, with respect to
Performance Units, that is equal to the amount of cash payable as if all
Performance Objectives had been satisfied at the maximum level, and, with
respect to Performance Shares, that is equal to the Fair Market Value of the
Shares payable as if all Performance Objectives had been satisfied at the
maximum level.
10.5. Non-Transferability. Until
the vesting of Performance Units or the lapsing of any restrictions on
Performance Shares, as the case may be, such Performance Units or Performance
Shares shall not be sold, transferred or otherwise disposed of and shall not be
pledged or otherwise hypothecated.
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11.
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Other Share Based
Awards.
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11.1. Share
Awards. The
Committee may, in its discretion, grant a Share Award to any Eligible Individual
on such terms and conditions as the Committee may determine in its sole
discretion. Share Awards may be made as additional compensation for
services rendered by the Eligible Individual or may be in lieu of cash or other
compensation to which the Eligible Individual is entitled from the
Company.
11.2. Phantom Stock
Awards.
(a) Grant. The
Committee may, in its discretion, grant shares of Phantom Stock to any Eligible
Individual. Such Phantom Stock shall be subject to the terms and
conditions established by the Committee in its discretion and set forth in the
applicable Agreement.
(b) Payment of
Awards. Upon the vesting of a Phantom Stock Award, the Grantee
shall be entitled to receive a cash payment in respect of each share of Phantom
Stock which shall be equal to the Fair Market Value of a Share as of the date
the Phantom Stock Award was granted, or such other date as determined by the
Committee in its discretion at the time the Phantom Stock Award was
granted. The Committee may, in its discretion, at the time a Phantom
Stock Award is granted, provide a limitation on the amount payable in respect of
each share of Phantom Stock. In lieu of a cash payment, the Committee
may, in its discretion, settle Phantom Stock Awards with Shares having a Fair
Market Value equal to the cash payment to which the Grantee has become
entitled.
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12.
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Effect of a
Termination of Employment.
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27
12.1. The
Agreement evidencing the grant of each Option and each Award shall set forth the
terms and conditions applicable to such Option or Award upon a termination or
change in the status of the employment of the Optionee or Grantee by the
Company, a Subsidiary or a Division (including a termination or change by reason
of the sale of a Subsidiary or a Division), which shall be as the Committee may,
in its discretion, determine at the time the Option or Award is granted or
thereafter. In addition, such terms and conditions may be set forth
in an employment agreement between the Eligible Individual and the
Company.
12.2. Excise Tax
Limitation.
(a) Notwithstanding
anything contained in this Plan to the contrary, except as otherwise provided in
an employment agreement between the Eligible Individual and the Company, to the
extent that any payment, distribution or acceleration of vesting to or for the
benefit of the Optionee or Grantee by the Company (within the meaning of Code
Section 280G and the regulations thereunder), whether paid or payable or
distributed or distributable pursuant to the terms of this Plan or otherwise
(the “Total Payments”) is or will be subject to the excise tax imposed under
Code Section 4999 (the “Excise Tax”), then the Total Payments shall be reduced
(but not below zero) if and to the extent that a reduction in the Total Payments
would result in the Optionee or Grantee retaining a larger amount, on an
after-tax basis (taking into account federal, state and local income taxes and
the Excise Tax), than if the Optionee or Grantee received the entire amount of
such Total Payments. Unless the Optionee or Grantee shall have given
prior written notice specifying a different order to the Company to effectuate
the foregoing, the Company shall reduce or eliminate the Total Payments, by
first reducing or eliminating the portion of the Total Payments which are
payable in cash and then by reducing or eliminating non-cash payments, in each
case in reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Determination (as hereinafter
defined). Any notice given by the Optionee or Grantee pursuant to the
preceding sentence shall take precedence over the provisions of any other plan,
arrangement or agreement governing the Executive’s rights and entitlements to
any benefits or compensation.
(b) The
determination of whether the Total Payments shall be reduced as provided in
Section 12.2(a) and
the amount of such reduction shall be made at the Company’s expense by an
accounting firm selected by the Optionee or Grantee from among the four largest
accounting firms in the United States or at the Optionee’s or Grantee’s expense
by an attorney selected by the Optionee or Grantee. Such accounting
firm or attorney (the “Determining Party”) shall provide its determination (the
“Determination”), together with detailed supporting calculations and
documentation to the Company and the Optionee or Grantee within ten (10) days of
the termination of Optionee’s or Grantee’s employment. If the
Determining Party determines that no Excise Tax is payable by the Optionee or
Grantee with respect to the Total Payments, it shall furnish the Optionee or
Grantee with an opinion reasonably acceptable to the Optionee or Grantee that no
Excise Tax will be imposed with respect to any such payments and, absent
manifest error, such Determination shall be binding, final and conclusive upon
the Company and the Optionee or Grantee. If the Determining Party
determines that an Excise Tax would be payable, the Company shall have the right
to accept the Determination of the Determining Party as to the extent of the
reduction, if any, pursuant to Section 12.2(a), or to have such Determination reviewed by an
accounting firm selected by the Company, at the Company’s expense. If
the Company’s accounting firm and the Determining Party do not agree, a third
28
accounting
firm shall be jointly chosen by the Determining Party and the Company, at the
Company's expense, in which case the determination of such third accounting firm
shall be binding, final and conclusive upon the Company and the Optionee or
Grantee.
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13.
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Adjustment Upon
Changes in Capitalization.
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(a) In the
event of a Change in Capitalization, the Committee shall conclusively determine
the appropriate proportional adjustments to (i) the maximum number and class of
Shares or other stock or securities with respect to which Options or Awards may
be granted under the Plan, (ii) the maximum number and class of Shares or other
stock or securities with respect to which Options or Awards may be granted to
any Eligible Individual in any one calendar year period, (iii) the number and
class of Shares or other stock or securities or other property (including cash)
which are subject to outstanding Options or Awards granted under the Plan and
the exercise price therefor, if applicable, (iv) for Stock Appreciation Rights
unrelated to an Option, the Fair Market Value of a Share on the date the Stock
Appreciation Right was granted, and (v) the Performance Objectives.
(b) Any such
adjustment in the Shares or other stock or securities subject to outstanding
Options or Awards that are intended to qualify as Performance-Based Compensation
shall be made in such a manner as not to adversely affect the treatment of the
Options or Awards as Performance-Based Compensation.
(c) Any
adjustment pursuant to this Section 13 in respect
of Options or Stock Appreciation Rights that are Non-409A Awards shall be made
only to the extent consistent with Treasury Regulation Section 1.409A-1(b)(5)(v)
or a successor provision.
(d) If, by
reason of a Change in Capitalization, a Grantee of an Award shall be entitled
to, or an Optionee shall be entitled to exercise an Option with respect to, new,
additional or different shares of stock or securities of the Company or any
other corporation, such new, additional or different shares shall thereupon be
subject to all of the conditions, restrictions and performance criteria which
were applicable to the Shares subject to the Award or Option, as the case may
be, prior to such Change in Capitalization.
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14.
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Effect of Certain
Transactions.
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Subject
to Sections 6.4, 7.7,
9.4(b), and 10.4 or as
otherwise provided in an Agreement or employment agreement between the Eligible
Individual and the Company, in the event of (a) the liquidation or dissolution
of the Company or (b) a merger or consolidation of the Company (a “Transaction”)
that does not constitute a Change in Control, the Plan and each Option and Award
issued hereunder shall continue in effect in accordance with their respective
terms, except that the Committee may, in its discretion, do one or more of the
following: (i) shorten the period during which Options and Awards are
exercisable (provided they remain exercisable for at least thirty (30) days
after the date on which notice of such shortening is given to the Optionees or
Grantees); (ii) accelerate the vesting schedule or the lapse of any restrictions
with respect to Options and Awards, (iii) arrange to have the surviving or
successor entity assume the Options and Awards or grant replacement Options and
Awards with appropriate adjustments in the exercise prices, and adjustments in
the number and kind of securities issuable
29
upon
exercise or lapse of restrictions or adjustments so that the Options and Awards
or their replacements represent the right to purchase or receive the stock,
securities or other property (including cash) as may be issuable or payable as a
result of such Transaction with respect to or in exchange for the number of
Shares purchasable and receivable upon the exercise of the Options and Awards
had such exercise occurred in full prior to the Transaction, or (iv) with the
prior written consent of the Optionee or Grantee (unless otherwise stated in the
Agreement), cancel the Options and Awards upon the payment to the Grantees in
cash (A) with respect to each Option and Award to the extent exercisable for or
payable in Shares, of an amount that is equal to the Fair Market Value of the
Shares subject to the Award or portion thereof over the aggregate exercise price
for such Shares under the Award or portion thereof surrendered at the effective
time of the Transaction, or (B) with respect to each Award to the extent not
exercisable for or payable in Shares, of an amount that is equal to the cash
value of the Award or portion thereof surrendered at the effective time of the
Transaction. The Committee may, in its discretion, also provide for
one or more of the following alternatives in any particular
Agreement. The treatment of any Option or Award as provided in this
Section 14 shall be conclusively presumed to be
appropriate for purposes of Section 10.
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15.
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Interpretation.
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Following
the required registration of any equity security of the Company pursuant to
Section 12 of the Exchange Act:
(a) The Plan
is intended to comply with Rule 16b-3 promulgated under the Exchange Act and the
Committee shall interpret and administer the provisions of the Plan or any
Agreement in a manner consistent therewith. Any provisions
inconsistent with such Rule shall be inoperative and shall not affect the
validity of the Plan.
(b) Unless
otherwise expressly stated in the relevant Agreement, each Option, Stock
Appreciation Right and Performance Award granted under the Plan is intended to
be Performance-Based Compensation. The Committee shall not be
entitled to exercise any discretion otherwise authorized hereunder with respect
to such Options or Awards if the ability to exercise such discretion or the
exercise of such discretion itself would cause the compensation attributable to
such Options or Awards to fail to qualify as Performance-Based
Compensation.
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16.
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Successors; Binding
Agreement.
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This Plan
shall be binding upon and shall inure to the benefit of the Company, its
Successors and Assigns, and the Company shall require any Successors and Assigns
to expressly assume and agree to comply with the terms of the Plan in the same
manner and to the same extent that the Company would be required to perform it
if no such succession or assignment had taken place.
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17.
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Termination and
Amendment of the Plan or Modification of Options and
Awards.
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17.1. Plan Amendment or
Termination. The
Plan shall terminate as of the tenth (10th) anniversary of the date of its
adoption by the Board and no Option or Award may be granted
thereafter. The Board may sooner terminate the Plan and the Board may
at any time and from time to time amend, modify or suspend the Plan; provided,
however, that:
30
(a) no such
amendment, modification, suspension or termination shall impair or adversely
alter in any material respect any Options or Awards theretofore granted under
the Plan, except with the consent of the Optionee or Grantee, nor shall any
amendment, modification, suspension or termination deprive any Optionee or
Grantee of any Shares which he or she may have acquired through or as a result
of the Plan; and
(b) to the
extent necessary under any applicable law, regulation or exchange requirement,
no amendment shall be effective unless approved by the stockholders of the
Company in accordance with applicable law, regulation or exchange
requirement.
17.2. Modification of Options and
Awards. Subject
to the provisions of the Plan, no modification of an Option or Award shall
adversely alter or impair in any material respect any of the Participant's
rights or the Company's obligations under the Option or Award without the
consent of the Optionee or Grantee, as the case may be.
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18.
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Non-Exclusivity of the
Plan.
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The
adoption of the Plan by the Board shall not be construed as amending, modifying
or rescinding any previously approved incentive arrangement or as creating any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including, without limitation, the granting of stock
options otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
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19.
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Regulations and Other
Approvals; Governing Law; Jury Trial
Waiver.
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19.1. Except as
to matters of federal law, the Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of Delaware without giving effect to conflicts of laws principles
thereof.
19.2. Unless
otherwise specified in an applicable Agreement, any suit, action or proceeding
with respect to this Plan or any Award Agreement, or any judgment entered by any
court of competent jurisdiction in respect of any thereof, shall be brought in
any Court in St. Louis County, Missouri, and the Company and each Participant
shall submit to the exclusive jurisdiction of such courts for the purpose of any
such suit, action, proceeding or judgment. The Company and each
Participant shall irrevocably waive any objections which he, she or it may have
to the laying of the venue of any suit, action or proceeding arising out of or
relating to this Plan or any Award Agreement brought in any Court in St. Louis
County, Missouri, and shall further irrevocably waive any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum. The Company and each Participant shall waive any
right he, she or it may have to trial by jury in respect of any litigation based
on, arising out of, under or in connection with this Plan or any Award Agreement
or any course of conduct, course of dealing, verbal or written statement or
action of any party to any Award Agreement or relating to this Plan in any
way.
19.3. The
obligation of the Company to sell or deliver Shares with respect to Options and
Awards granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the
obtaining of all
31
such
approvals by governmental agencies as may be deemed necessary or appropriate by
the Committee in its discretion.
19.4. The Board
may make such changes as may be necessary or appropriate to comply with the
rules and regulations of any government authority.
19.5. Each
Option and Award is subject to the requirement that, if at any time the
Committee determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or Award or the
issuance of Shares, no Options or Awards shall be granted or payment made or
Shares issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions as
acceptable to the Committee in its discretion.
19.6. Notwithstanding
anything contained in the Plan or any Agreement to the contrary, in the event
that the disposition of Shares acquired pursuant to the Plan is not covered by a
then current registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), and is not otherwise exempt from such registration, such
Shares shall be restricted against transfer to the extent required by the
Securities Act and Rule 144 or other regulations thereunder. The
Committee may, in its discretion, require any individual receiving Shares
pursuant to an Option or Award granted under the Plan, as a condition precedent
to receipt of such Shares, to represent and warrant to the Company in writing
that the Shares acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other than pursuant to
an effective registration thereof under said Act or pursuant to an exemption
applicable under the Securities Act or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall be
appropriately amended or have an appropriate legend placed thereon to reflect
their status as restricted securities as aforesaid.
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20.
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Miscellaneous.
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20.1. Multiple
Agreements. The
terms of each Option or Award may differ from other Options or Awards granted
under the Plan at the same time, or at some other time. The Committee
may, in its discretion, also grant more than one Option or Award to a given
Eligible Individual during the term of the Plan, either in addition to, or in
substitution for, one or more Options or Awards previously granted to that
Eligible Individual.
20.2. Withholding of
Taxes.
(a) At such
times as an Optionee or Grantee recognizes taxable income in connection with the
receipt of Shares or cash hereunder (a “Taxable Event”), the Optionee or Grantee
shall pay to the Company an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld by the Company
in connection with the Taxable Event (the “Withholding Taxes”) prior to the
issuance, or release from escrow, of such Shares or the payment of such
cash. The Company shall have the right to deduct from any payment of
cash to an Optionee or Grantee an amount equal to the Withholding Taxes in
32
satisfaction
of the obligation to pay Withholding Taxes. In satisfaction of the
obligation to pay Withholding Taxes to the Company, the Optionee or Grantee may
make a written election (the “Tax Election”), which may be accepted or rejected
in the discretion of the Committee, to have withheld a portion of the Shares
then issuable to him or her having an aggregate Fair Market Value equal to the
Withholding Taxes. Notwithstanding the foregoing, the Committee may,
in its discretion, provide that an Optionee or Grantee shall not be entitled to
exercise or receive an Award, as applicable, for which cash has not been
provided by the Optionee or Grantee with respect to the Withholding Taxes
applicable to such Award.
(b) Notwithstanding
the foregoing, if Options have been transferred pursuant to the provisions of
Section 6.1 the Optionee shall provide the Company
with funds sufficient to pay such tax withholding when such withholding is
due. Furthermore, if such Optionee does not satisfy the applicable
tax withholding obligation, the transferee may provide the funds sufficient to
enable the Company to pay the tax withholding. However, if Options
have been transferred, the Company shall have no right to retain or sell without
notice, or to demand surrender from the transferee of, Shares in order to pay
such tax withholding.
(c) Required Consent to and
Notification of Code Section 83(b) Election. No election under
Code Section 83(b) (to include in gross income in the year of transfer the
amounts specified in Code Section 83(b) or under a similar provision of the laws
of a jurisdiction outside the United States may be made unless expressly
permitted by the terms of the Award document or by action of the Committee in
writing prior to the making of such election. In any case in which a Participant
is permitted to make such an election in connection with an Award, the
Participant shall notify the Company of such election within ten (10) days of
filing notice of the election with the Internal Revenue Service or other
governmental authority, in addition to any filing and notification required
pursuant to regulations issued under Code Section 83(b) or other applicable
provision.
(d) Requirement of Notification
Upon Disqualifying Disposition Under Code Section 421(b). If
any Participant shall make any disposition of Shares delivered pursuant to the
exercise of an ISO under the circumstances described in Code Section 421(b)
(i.e., a disqualifying disposition), such Participant shall notify the Company
of such disposition within ten (10) days thereof.
20.3. Effective
Date. The
effective date of this Plan shall be as determined by the Board in its
discretion, subject only to the approval by the affirmative vote of the holders
of a majority of the securities of the Company (i) pursuant to a written consent
or (ii) present, or represented, and entitled to vote at a meeting of
stockholders duly held, in either case in accordance with the applicable laws of
the State of Delaware within twelve (12) months of the adoption of the Plan by
the Board. If any Awards are granted under the Plan before the date
of such shareholder approval, such Awards automatically shall be granted subject
to such approval.
20.4. Compliance with Code Section
162(m). It is
the intent of the Company that Options and SARs granted to “covered employees”
(within the meaning of Code Section 162(m)) and other Awards designated as
awards of Performance-Based Compensation are intended to constitute qualified
“performance-based compensation” within the meaning of Code Section 162(m) and
the regulations thereunder. Accordingly, the terms of Sections 4.1, 5.2, 7
33
and 10 shall be interpreted in a manner consistent with
Code Section 162(m) and the regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a
given Participant will be in a covered employee with respect to a fiscal year
that has not yet been completed, the term covered employee as used herein shall
mean only a person designated by the Committee as likely to be a covered
employee with respect to a specified fiscal year. If any provision of
the Plan or any Agreement relating to an Award that is designated as intended to
comply with Code Section 162(m) does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be construed or deemed amended to the
extent necessary to conform to such requirements, and no provision shall be
deemed to confer upon the Committee or any other person discretion to increase
the amount of compensation otherwise payable in connection with any such Award
upon attainment of the applicable performance objectives.
20.5. Certain Limitations on
Awards to Ensure Compliance with Code Section 409A. For
purposes of this Plan, references to an Option or Award term or event (including
any authority or right of the Company or a Participant) being “permitted” under
Code Section 409A mean, for a 409A Award, that the term or event will not cause
the Participant to be liable for payment of interest or a tax penalty under Code
Section 409A and, for a Non-409A Award, that the term or event will not cause
the Award to be treated as subject to Code Section 490A. Other
provisions of the Plan notwithstanding, the terms of any 409A Award and any
Non-409A Award, including any authority of the Company and rights of the
Participant with respect to the Award, shall be limited to those terms permitted
under Code Section 409A, and any terms not permitted under Code Section 409A
shall be automatically modified and limited to the extent necessary to conform
with Code Section 409A. For this purpose, other provisions of the
Plan notwithstanding, the Company shall have no authority to accelerate
distributions relating to 409A Awards in excess of authority permitted under
Code Section 409A, and any distribution subject to Code Section
409A(a)(2)(A)(i)(separation from service) to a “specified employee” as defined
under Code Section 409A(a)(2)(B)(i), shall not occur earlier than the earliest
time permitted under Code Section 409A(a)(2)(B)(i). The Company shall
have no liability to a Participant, or any other party, if an Award that is
intended to be exempt from, or compliant with, Code Section 409A is not so
exempt or compliant or for any action taken by the Committee or the Company and,
in the event that any amount or benefit under the Plan becomes subject to
penalties under Section 409A, responsibility for payment of such penalties shall
rest solely with the affected Participant(s) and not with the
Company.
20.6. Certain Limitations Relating
to Accounting Treatment of Awards. Other
provisions of the Plan notwithstanding, the Committee’s authority under the Plan
is limited to the extent necessary to ensure that any Option or other Award of a
type that the Committee has intended to be subject to fixed accounting with a
measurement date at the date of grant or the date performance conditions are
satisfied under FAS 123(R) shall not become subject to “variable” accounting
solely due to the existence of such authority.
20.7. Awards to Participants
Outside the United States. The
Committee may modify the terms of any Award under the Plan made to or held by a
Participant who is then resident or primarily employed outside of the United
States in any manner deemed by the Committee to be necessary or appropriate in
order that such Award shall conform to laws,
34
regulations,
and customs of the country in which the Participant is then resident or
primarily employed, or so that the value and other benefits of the Award to the
Participant, as affected by foreign tax laws and other restrictions applicable
as a result of the Participant's residence or employment abroad shall be
comparable to the value of such an Award to a Participant who is resident or
primarily employed in the United States. An Award may be modified under this
Section 20.7 in a manner that is inconsistent with
the express terms of the Plan, so long as such modifications will not contravene
any applicable law or regulation or result in actual liability under Section
16(b) for the Participant whose Award is modified.
20.8. Payments in the Event of
Forfeitures; Fractional Shares. No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award. The Committee shall determine whether cash, other Awards or
other property shall be issued or paid in lieu of such fractional Shares or
whether such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated.
20.9. Right of
Setoff. The
Company or any Subsidiary or Affiliate may, to the extent permitted by
applicable law, deduct from and set off against any amounts the Company or a
Subsidiary or Affiliate may owe to the Participant from time to time (including
amounts payable in connection with any Award that are owed as wages, fringe
benefits, or other compensation owed to the Participant), such amounts as may be
owed by the Participant to the Company, although the Participant shall remain
liable for any part of the Participant’s payment obligation not satisfied
through such deduction and setoff; provided, however, that no such setoff may be
made if such setoff would result in the imposition of penalties under Code
Section 409A. By accepting any Award granted hereunder, the
Participant agrees to any deduction or setoff under this Section 20.9.
20.10. Unfunded Status of Awards;
Creation of Trusts. To
the extent that any Award is deferred compensation, the Plan is intended to
constitute an “unfunded” plan for deferred compensation with respect to such
Award. With respect to any payments not yet made to a Participant or
obligation to deliver Stock pursuant to an Award, nothing contained in the Plan
or any Agreement shall give any Participant the right to any specific assets or
securities of the Company or any Subsidiary or Affiliate.
20.11. Conditions and Restrictions
Upon Securities Subject to Awards. Each
Participant to whom an Award is made under the Plan shall (i) enter into an
Agreement with the Company that shall contain such provisions consistent with
the provisions of the Plan, as may be approved by the Committee and (ii) to the
extent the Award is made at a time prior to the date Shares are not listed for
trading on an established securities exchange, enter into a “Stockholder’s
Agreement” that is substantially similar in all material respect to any
stockholder’s agreement entered into by any other employee of the Company or its
Subsidiaries in connection with the Award of any equity-based compensation. The
Committee may provide that the Shares issued upon exercise of an Option or Stock
Appreciation Right or otherwise subject to or issued under an Award shall be
subject to such further agreements, restrictions, conditions or limitations as
the Committee in its discretion may specify prior to the exercise of such Option
or Stock Appreciation Right or the grant, vesting or settlement of such Award,
including without limitation, conditions on vesting or transferability,
forfeiture or repurchase provisions and method of payment for the Shares issued
upon exercise, vesting or settlement of
35
such
Award (including the actual or constructive surrender of Shares already owned by
the Participant) or payment of taxes arising in connection with an
Award. Without limiting the foregoing, such restrictions may address
the timing and manner of any resales by the Participant or other subsequent
transfers by the Participant of any Shares issued under an Award, including
without limitation (i) restrictions under an insider trading policy or pursuant
to applicable law, (ii) restrictions designed to delay and/or coordinate the
timing and manner of sales by Participant and holders of other Company equity
compensation arrangements, (iii) restrictions as to the use of a specified
brokerage firm for such resales or other transfers and (iv) provisions requiring
Shares to be sold on the open market or to the Company in order to satisfy tax
withholding or other obligations.
20.12. Compliance with Laws and
Regulations. This
Plan, the grant, issuance, vesting, exercise and settlement of Options and
Awards thereunder, and the obligation of the Company to sell, issue or deliver
Shares under such Options and Awards, shall be subject to all applicable
foreign, federal, state and local laws, rules and regulations, stock exchange
rules and regulations, and to such approvals by any governmental or regulatory
agency as may be required. The Company shall not be required to register in a
Participant’s name or deliver any Shares prior to the completion of any
registration or qualification of such Shares under any foreign, federal, state
or local law or any ruling or regulation of any government body which the
Committee shall determine to be necessary or advisable. To the extent the
Company is unable to or the Committee deems it infeasible to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, the Company and its Affiliates shall be relieved of any liability
with respect to the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained. No Option shall be exercisable
and no Shares shall be issued and/or transferable under any Option or Award
unless a registration statement with respect to the Shares underlying such
Option or Award is effective and current or the Company has determined that such
registration is unnecessary. References in this Plan to a particular
law, rule or regulation shall be deemed to include all subsequent amendments,
modifications and interpretations as well as any successor provision
thereto.
20.13. Deferral of
Gains. The
Committee may, in an Agreement or otherwise, provide for the deferred delivery
of Shares upon settlement, vesting or other events with respect to an Award
(other than an Option or Stock Appreciation Right). Notwithstanding anything
herein to the contrary, in no event will any deferral of the delivery of Shares
or any other payment with respect to any Award be allowed if the Committee
determines, in its sole discretion, that the deferral would result in the
imposition of the additional tax under Code Section 409A(a)(1)(B).
20.14. No Effect on Employment or
Service. Nothing
in the Plan shall interfere with or limit in any way the right of the Company to
terminate any Participant’s employment or service at any time, for any reason
and with or without cause.
20.15. Participation. No
person shall have the right to be selected to receive an Award under this Plan,
or, having been so selected, to be selected to receive a future
Award. The Committee’s determination under the Plan (including,
without limitation, determination of the Eligible Employees who shall be granted
Awards, the form, amount and timing of such Awards,
36
the terms
and provisions of Awards and the Agreements and the establishment of Performance
Objectives) need not be uniform and may be made by it selectively among Eligible
Employees who receive or are eligible to receive Awards under the Plan, ether or
not such Eligible Employees are similarly situated.
20.16. No Rights as
Stockholder. No
Participant (nor any beneficiary) shall have any of the rights or privileges of
a stockholder of the Company with respect to any Shares issuable pursuant to an
Award (or exercise thereof), unless and until certificates representing such
Shares shall have been issued, recorded on the records of the Company or its
transfer agents or registrars, and delivered to the Participant (or
beneficiary).
20.17. Gender and
Number. Except
where otherwise indicated by the context, any masculine term used herein also
shall include the feminine; the plural shall include the singular and the
singular shall include the plural.
20.18. Severability. In
the event any provision of the Plan or of any Award Agreement shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan or the Award Agreement, and the Plan and/or the
Award Agreement shall be construed and enforced as if the illegal or invalid
provision had not been included.
20.19. Captions. Captions
are provided herein for convenience only, and shall not serve as a basis for
interpretation or construction of the Plan.
20.20. Other
Benefits. No
Award granted or paid out under this Plan shall be deemed compensation for
purposes of computing benefits under any retirement plan of the Company or its
Affiliates nor affect any benefits under any other benefit plan now or
subsequently in effect under which the availability or amount of benefits is
related to the level of compensation.
20.21. Costs. The
Company shall bear all expenses associated with administering this Plan,
including expenses of issuing Shares pursuant to any Awards
hereunder.
[End of
Document]
37
Exhibit
99.1
SEPARATION
AGREEMENT AND RELEASE
FOR
GRIER C. RACLIN
This
Separation Agreement and Release (this “Agreement”) is entered into between
Charter Communications, Inc. (the “Company” or “Charter”) and me, Grier C.
Raclin, as a condition to my receiving payments pursuant to my Amended and
Restated Employment Agreement with Charter dated August 1, 2007, as amended (as
amended, the “Employment Agreement”), in connection with the termination of my
employment with Charter as of December 15, 2009 (the “Termination
Date”). The Company and I hereby agree as follows:
(a) Payments And Benefits
Payable Per The Employment Agreement: Provided I am not
terminated for breach of the terms of this Agreement or of my Employment
Agreement prior thereto, I shall remain employed by Charter pursuant to the
terms of my Employment Agreement through the Termination Date, I shall receive
salary at my current annual rate of $486,757.89 in bi-weekly installments as
such installments are normally paid to senior executives (with all salary
installments due but not paid prior to my execution of this Agreement to be paid
on the first payday after all conditions in Section 15(g) of the Employment
Agreement are satisfied); I shall continue to receive all benefits, without
interruption, including, without limitation, health insurance; and I shall
continue to participate in all medical and child-care flex spending accounts I
have previously selected, all through the Termination Date. I may
elect COBRA, if I choose to participate, and this Agreement does not constitute
my election for COBRA. As of December 15, 2009, I will cease to make
contributions to the Charter PAC. In addition, in exchange for my
execution and delivery of this Agreement, specifically including the
effectiveness of the release set forth in section “b” hereof (and the failure to
revoke same within seven (7) days after I sign and deliver it), the Company will
provide me with the following payments and benefits as set forth herein in
satisfaction of the requirements of Section 15(b) of the Employment
Agreement and any other claim I may hold against Charter or its
employees:
(i) An
amount equal to two times (a) my current base salary, calculated at the current
annual rate of $486,757.89 per annum, and (b) my annual target bonus of
$365,068.42, payable in equal installments bi-weekly from the date my employment
is terminated through December 15, 2011 (the “Separation Term); provided that, the
total of such payments shall be but shall not exceed, in the aggregate, the
gross amount of $1,703,652.62; provided further
that, without conceding the applicability of Section 409A of the Internal
Revenue Code of 1986 (the “Code”), in order to avoid any tax consequences of
Section 409A, the first payment, totaling $425,913.15 for severance due
prior to that date which amount shall be in addition to the payments due under
Paragraphs (a)(iii), (a)(iv) and (a)(vi) hereof, shall be made to me on June 16,
2010 for the period (the “Initial Payment Period”) beginning on December 16,
2009 and ending on the six (6) month anniversary of the date I have a separation
from service for purposes of Code Section 409A;
(ii) To
the extent not previously paid, a lump sum bonus payment for the period from
January 1, 2009 through June 30, 2009 in the amount of $182,534, under the terms
of the 2009 Executive Bonus Plan;
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(iii) A
lump sum payment (net after deduction of taxes and other required withholdings)
equal to $16,702.56 (or twenty-four (24) times the monthly cost, at the
time my employment is terminated) for me to receive, at my option under COBRA,
the paid coverage for health, dental and vision benefits then being provided for
me and my family at the Company’s cost at the time my employment is
terminated. This amount will be paid to me on June 16, 2010, and such
payment will not take into account future increases in costs during the
applicable time period;
(iv) To
the extent authorized and permitted by the terms of the applicable plan, any
performance cash or restricted cash awards shall continue to vest and be paid,
with the first such payment to be paid on June 16, 2010 and the remaining
payment to be paid as called for under such applicable plan for and during the
Separation Term, in accordance with the schedule attached hereto as Schedule
A;
(v) The
Company will provide, at its expense, the full cost of executive-level
out-placement services. These services will continue through July 31,
2010; and
(vi) A
cash payout of $37,441.60 for any remaining hours of accrued and unused vacation
calculated as of December 15, 2009 at my rate of base salary in effect as of
December 15, 2009, to be paid on June 16, 2010.
These
payments and benefits will be paid and/or provided as and when called for by the
Employment Agreement, unless otherwise provided in this Agreement, after all
conditions to the effectiveness of this Agreement and the releases called for by
this Agreement have been satisfied. The right to retain the same
shall be subject to compliance with this Agreement and the terms of the
Employment Agreement. In the event I die before all payments and
amounts due to me hereunder are paid, any remaining payments will be made to my
spouse, if she survives me and, if not, then to my estate.
I
acknowledge I have received full payment under the Company's Executive Cash
Award Plan ("ECAP") and the Company hereby waives any, and acknowledges that
there is no applicable repayment provision pursuant to the payment agreement
which I executed to receive the payments under the ECAP. I also
acknowledge I have received full payment of my RVP Bonus and am not entitled to
any further payments under the Company's Value Creation Plan and the Company
acknowledges that there is no repayment provision with respect to the RVP
Bonus.
Complete
Release: I hereby understand and agree to the termination of
all offices, directorships, manager positions and other similar offices I hold
with Charter or any of its subsidiaries or related or affiliated corporations,
limited liability companies and partnerships and all employment by Charter
effective the close of business on December 15, 2009. In
consideration for the payments I am to receive hereunder, I unconditionally and
irrevocably release, waive and give up any and all known and unknown claims,
lawsuits and causes of action, if any, that I now may have or hold against
Charter, its current and former parents, plans, subsidiaries, and related or
affiliated corporations, ventures, limited liability companies and partnerships,
and their respective current and former employees, directors, fiduciaries,
administrators, insurers, members, managers, partners, and agents and related
parties, in any way arising out of, in connection with or based upon
(i) any event or fact that has occurred prior to the date I sign this
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Agreement,
(ii) my employment with Charter and/or any of its subsidiaries or
affiliates to date and any event or occurrence occurring during such employment,
(iii) the termination of my employment, (iv) any breach of the
Employment Agreement, (v) any claim to payment under or from the ECAP or
for salary, bonus, stock options or restricted shares, or performance or
restricted cash awards, other than as specifically granted pursuant to this
Agreement; or (vi) any decision, promise, agreement, statement, policy,
practice, act or conduct prior to this date of or by any person or entity I am
releasing, and from any claims, lawsuits. I understand that this means that,
subject to the limitations described below, I am releasing Charter and such
other persons and entities from, and may not bring claims against any of them
under (a) Title VII of the Civil Rights Act of 1964 or Sections 1981
and 1983 of the Civil Rights Act of 1866, which prohibit discrimination based on
race, color, national origin, ancestry, religion, or sex; (b) the Age
Discrimination in Employment Act, which prohibits discrimination based on age;
(c) the Equal Pay Act, which prohibits paying men and women unequal pay for
equal work; (d) the Americans with Disabilities Act and Sections 503
and 504 of the Rehabilitation Act of 1973, which prohibit discrimination based
on disability; (e) the WARN Act, which requires that advance notice be
given of certain workforce reductions; (f) the Missouri Human Rights Act,
chapter 213, R.S. Mo., which prohibits discrimination in employment, including
but not limited to discrimination and retaliation based on race, gender,
national origin, religion, age and disability; (g) the Employee Retirement
Income Security Act, which among other things, protects employee benefits;
(h) the Family and Medical Leave Act of 1993, which requires employers to
provide leaves of absence under certain circumstances; (i) the
Sarbanes-Oxley Act of 2002, which, among other things, provides Whistleblower
protection; (j) any federal or state law, regulation, decision, or
executive order prohibiting discrimination or retaliation or for breach of
contract; (k) any of the laws of the State of Missouri or any political
subdivision of such State; (l) any law prohibiting retaliation based on
exercise of my rights under any law, providing whistleblowers protection,
providing workers’ compensation benefits, protecting union activity, mandating
leaves of absence, prohibiting discrimination based on veteran status or
military service, restricting an employer’s right to terminate employees or
otherwise regulating employment, enforcing express or implied employment
contracts, requiring an employer to deal with employees fairly or in good faith,
providing recourse for alleged wrongful discharge, tort, physical or personal
injury, emotional distress, fraud, negligent or other misrepresentation,
defamation, and similar or related claims, and any other law relating to salary,
commission, compensation, benefits, and other matters. I specifically
represent and agree that I have not been treated adversely on account of age,
gender or other legally protected classification, nor have I otherwise been
treated wrongfully in connection with my employment with the Company and/or any
of its subsidiaries or affiliates and that I have no basis for a claim under the
Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,
or any applicable law prohibiting employment or other discrimination or
retaliation. I acknowledge that the Company relied on the
representations and promises in this Agreement in agreeing to pay me the
benefits described in subsection (a). I understand that I am
releasing claims for events that have occurred prior to my signing this
Agreement that I may not know about. This release does not include
claims arising after the date I sign this Agreement, any claim under a stock
option plan or award agreement, incentive stock plan, or the restricted stock
award agreement based upon my service to and ending the date my employment
terminates, any claim under a group health insurance plan in which I participate
for claims accrued as of the date my employment terminated, a breach of the
provisions of this Agreement (including but not limited to a breach of
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any
obligation to provide me with the payments and benefits called for by
Sections 15 (b) of the Employment Agreement, as specified in paragraph
(a) above) and any pending claims for workers compensation that have
already been filed or for on-the-job injuries that have already been reported,
or any claim for indemnification by Charter for actions taken by me within the
course and scope of my employment to the degree such actions are subject to
indemnification under Charter’s policies and practices.
Charter
hereby states and acknowledges that, to the best current knowledge of its Chief
Executive Officer, Chief Operating Officer and General Counsel, Charter has no
claim against me for breach of my employment agreement or other claim of
material liability.
(b) Promise Not to File
Claims: I promise never to file, prosecute or pursue any
lawsuit based on a claim purportedly released by this Agreement, or (absent
court order) to assist others in filing or prosecuting similar claims against
Charter. I understand and agree that nothing in this Agreement
precludes me from filing a charge of discrimination under applicable federal or
state law, although I have personally released such claims with regard to
matters and facts occurring prior to this date. I specifically
acknowledge and agree that I am not entitled to severance or any other benefits
under the Charter Communications Special One-Time Severance Plan or other
severance plan or contract, or to any payments following termination of my
employment under or by reason of the Employment Agreement (other than the
payments and benefits called for by Sections 15(b) of the Employment
Agreement, as specified in paragraph (a) above), and that the payments and
benefits described in this Agreement are in lieu of any severance or other
benefits to which I may be entitled under such plan or any other policy,
program, plan or agreement and satisfy and are in lieu of any payments to which
I may be entitled under the Employment Agreement or any other such plan, policy,
program or arrangement, and I specifically waive any rights I may have under
that plan and any such agreement, if any.
(c) Non-admission of
Liability: This Agreement is not an admission of fault,
liability or wrongdoing by me or any released party, and should not be
interpreted or construed as such I understand that all released parties
specifically deny engaging in any liability or wrongdoing.
(d) Non-Disparagement: Neither
Charter nor I will make any statement or announcement concerning my performance
at, employment with, or departure from Charter except as may be reviewed and
approved by the other party in advance; provided that, both
Charter and I may inform third parties that my employment will terminate or was
terminated (as the case may be) through mutual agreement on December 15,
2009. During the balance of and subsequent to my employment with
Charter and/or any of its subsidiaries or affiliates, I agree not to criticize,
denigrate, disparage, or make any derogatory statements about the Company
(including any subsidiaries, or affiliates), its business plans, policies and
practices, or about any of its officers, employees or former officers or
employees, to customers, competitors, suppliers, employees, former employees,
members of the public (including but not limited to in any internet publication,
posting, message board or weblog), members of the media, or any other person,
nor shall I take any action reasonably expected to harm or in any way adversely
affect the reputation and goodwill of the Company. During the balance
of and subsequent to my employment with Charter and/or any of its subsidiaries
or affiliates, Charter agrees, for itself, its directors and executive employees
not to criticize, denigrate, disparage, or make any derogatory statements
4 of 8
about me
or my performance at or employment with Charter to customers, competitors,
suppliers, employees, former employees, potential employers, members of the
public (including but not limited to in any Internet publication, posting,
message board or weblog), members of the media, or any other person, nor shall
Charter, its directors, employees, or agents, take any action reasonably
expected to harm or in any way adversely affect my
reputation. Nothing in this paragraph shall prevent anyone from
giving truthful testimony or information to law enforcement entities,
administrative agencies or courts or in any other legal proceedings as required
by law, including, but not limited to, assisting in an investigation or
proceeding brought by any governmental or regulatory body or official related to
alleged violations of any law relating to fraud or any rule or regulation of the
Securities and Exchange Commission.
(e) Future
Cooperation: I agree, at no cost to myself, to make myself
reasonably available by telephone, e-mail or in person to meet and speak with
representatives of Charter regarding events, omissions or other matters
occurring during my employment with Charter of which I have personal knowledge
or involvement that give rise or may give rise to a legal claim against
Charter. I, at no out-of-pocket cost to myself, also shall reasonably
cooperate with Charter in the defense of such claims, provided that, the
requirement for such cooperation with Charter shall terminate seven years from
the date of the identification of any such claim or claims. To the
fullest extent possible, Charter shall schedule any telephone conferences or
meetings with me for places near my residence and at times outside my normal
work schedule and shall take all other reasonable measures to ensure that my
schedule is disrupted to the least extent possible. To the fullest
extent possible, Charter will seek to avoid having me travel to locations
outside the metropolitan area within which I reside. If the Company
requires me to travel outside the metropolitan area in the United States where I
then reside to provide any testimony or otherwise provide any such assistance,
then Charter will reimburse me for any reasonable, ordinary and necessary travel
and lodging expenses incurred by me to do so, provided I submit all
documentation required under Charter’s standard travel expense reimbursement
policies and as otherwise may be required to satisfy any requirements under
applicable tax laws for Charter to deduct those expenses. I shall
respond to requests by Charter for nominal assistance (such as occasional
requests for factual recollections) at no charge but shall be compensated for my
time and assistance providing more than nominal amounts of historical factual
information or testimony at the rate of $100 per hour; provided, that any legal
services beyond such nominal assistance or provision of historical factual
information or testimony I am requested to provide to Charter in the future
shall be paid for at whatever rate is agreed by the parties at the
time. Nothing in this Agreement shall be construed or interpreted as
requiring me to provide any testimony, sworn statement or declaration that is
not complete and truthful.
(f) Confidential and Proprietary
Information; Covenant Not To Compete: I reaffirm my
obligations under and agree to remain bound by and to comply with the provisions
of Sections 17, 18 and 19 of my Employment Agreement with Charter, and
agree those provisions continue to apply to me, notwithstanding the termination
of my employment, the reason for termination of employment, or any act, promise,
decision, fact or conduct occurring prior to this date. The
“Restricted Period” for purposes of Section 19 of my Employment Agreement
shall start for all purposes on December 16, 2009 and shall end (a) for (and
solely for) the purposes of section 19(b)(i) of the Employment Agreement, on
December 15, 2010, and (b) for (and solely for) the purposes
of section 19(b)(ii) and (iii) of the Employment Agreement, on
December 15, 2011. In addition, I reaffirm my obligations under and
agree to remain bound by and to comply
5 of 8
with any
other agreement or policy relating to confidential information, invention,
non-solicitation, non-competition, or similar matters to which I am now
subject.
(g) Consideration of
Agreement: The Company advised me to take this Agreement home,
read it, and carefully consider all of its terms before signing
it. The Company gave me, and I understand that I have, 21 days in
which to consider this Agreement, sign it and return it to the
Company. I waive any right I might have to additional time within
which to consider this Agreement. I understand that I may discuss
this Agreement with an attorney, at my own expense during this period I
understand that I may revoke this Agreement within 7 days after I sign it by
advising Richard R. Dykhouse, Vice President, Associate General Counsel, and
Corporate Secretary, orally or in writing within that seven (7) day time period
of my intention to revoke this Agreement. I have carefully read this
Agreement, I fully understand what it means, and I am entering into it
voluntarily. I am receiving valuable consideration in exchange for my
execution of this Agreement that I would not otherwise be entitled to receive,
consisting of the benefits described in Paragraph (a) of this
Agreement. If I revoke my acceptance of this Agreement within such 7
day time period, or if I fail to accept this Agreement within the 21-day period,
then Charter shall have no obligations under this Agreement, including but not
limited to any obligation to pay or provide the payments specified in this
Agreement or under the Employment Agreement. I further understand
that I cannot sign this Agreement prior to December 15, 2009, or it will not be
effective.
(h) Return of
Property: I will return to the Company on or prior to the
Termination Date all files, memoranda, documents, records, credit cards, keys,
equipment (other than my Blackberry cell phone and laptop computer, although I
understand that I will no longer be provided service for such equipment after my
Termination Date (except that the Blackberry cell phone number will be
transferred or ported to me and Blackberry cell phone service will continue
until January 31, 2010 or such earlier time as I am able to transfer the phone
number for my Blackberry to a personal account; and I will reimburse the Company
for my usage during such period); , badges, vehicles, Confidential Information
(as defined in the Employment Agreement) and any other property of the Company
then in my possession or control as directed by the Company; provided that,
subject to the confidentiality requirements set forth herein and in my
Employment Agreement, I may keep copies of Company files currently residing on
my laptop computer but shall return the laptop computer and Blackberry cell
phone to the Company as soon as reasonably possible after the date hereof so
that the hard drive containing Company files and information (but not including
documents contained in the “Personal” folders residing on the computer), and all
programs allowing access to Company systems can be removed from the computer and
replaced with a hard drive containing copies of all other programs and all
documents and records (including, without limitation, the “Personal” folders
currently residing on the computer and provided further
that the Company shall provide me with Outlook Web access to the
“grier.raclin@chartercom.com” e-mail address until February 28,
2010. I also will reveal to the Company at the Company’s request all
access codes to any computer or other program or equipment.
(i) Choice of
Law: This Agreement was drafted in Missouri, and the Company’s
Corporate offices are in Missouri. Therefore, this Agreement
(including, without limitation, any covenants not to compete) is to be governed
by and interpreted according to the internal laws of the State of
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Missouri
without reference to conflicts of law principles, and this Agreement shall be
deemed to have been accepted and entered into in the State of
Missouri.
(j) Amendment,
Miscellaneous: Neither this Agreement nor any of its terms may
be amended, changed, waived or added to except in a writing signed by both
parties. The Company has made no representations or promises to me to
sign this Agreement, other than those in or referred to by this
Agreement. If any provision in this Agreement is found to be
unenforceable, all other provisions will remain fully enforceable.
This
Agreement was originally presented to me on December 11, 2009. I have
been advised to read it and carefully consider all of its provisions before
signing it. I will have 21 days in which to consider it, sign it and
return it to Rick Dykhouse. To accept this Agreement, I understand
that it must be signed and returned to Rick Dykhouse on or after December 15,
2009.
THIS
AGREEMENT AND RELEASE IS NOT VALID IF EXECUTED PRIOR TO DECEMBER 15,
2009.
I have
carefully read this Agreement, I fully understand what it means, and I am
entering into it voluntarily.
Presented
By:
Name:
______________________________
Date
Delivered: December 11, 2009
Employee:
Signature: /s/ Grier C.
Raclin
Date
Signed: December 19,
2009
Printed
Name: Grier C. Raclin
Company:
Signature:
/s/ Michael J.
Lovett
Date
Signed: December 21,
2009
Printed
Name: Michael J. Lovett
EVP & COO
Please Return
to:
Richard
R. Dykhouse
Vice
President, Associate General Counsel and Corporate Secretary
Charter
Communications, Inc.
12405
Powerscourt Drive
St.
Louis, MO 63131
314-543-2407
(Telephone)
314-965-6640
(Facsimile)
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Schedule A for Grier Raclin
Separation Agreement and Release
|
Performance Bank
|
||||
|
3/18/2008
Original
Grant
|
$ | 300,000 | ||
|
Performance
Attainment Adjustment
Applied
|
83.4 | % | ||
|
Deposit
to Performance
Bank
|
$ | 250,200 | ||
|
Payout
– 1/3rd
of Performance Bank
Balance
|
$ | (83,392 | ) | |
|
Performance
Bank Net Balance
|
$ | 166,808 | ||
|
Interest
Adjustment – Unknown
|
$ | |||
|
(The
2008 grant will be adjusted by a 2009 interest adjustment)
|
||||
|
Performance
Bank Balance after 2009 Interest
adjustment
|
$ | 166,808 | * | |
|
March
2010 Payout – 1/3rd of Performance Bank
Balance
|
$ | 55,597 | * | |
|
March
2011 Payout – 1/3rd of Performance Bank Balance
|
$ | 37,070 | * | |
| 2009 LTIP Actions – Grier Raclin did not receive a 2009 Performance Cash or Restricted Cash Grant | ||||
*Amounts
are estimated based on performance bank balance at December 11, 2009; to be
adjusted by 2009 interest adjustment in 2010.
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