Charter 2004 Annual Report Download - page 86

CHARTER COMMUNICATIONS, INC. 2004 FORM 10-K
will be eligible to receive a one-time discretionary bonus up to Charter when the bonus is payable in March 2005. Mr. Chang
100% of the actual base fee paid to him for his interim service has informed Charter of his intention to resign effective
under the agreement, based on individual and company per- April 15, 2005.
formance. Mr. May will continue to receive the compensation Until his resignation in January 2005, Mr. Vogel was
and reimbursement of expenses to which he is entitled in his employed as President and Chief Executive Officer, earning a
capacity as a member of the board of directors. Mr. May may base annual salary of $1,000,000 and was eligible to receive an
terminate the May Executive Services Agreement on thirty annual bonus of up to $500,000, a portion of which was based
(30) days notice. Charter may terminate such agreement upon on personal performance goals and a portion of which was
three (3) months notice, and Charter may elect at its discretion based on company performance measured against criteria
to pay Mr. May the base rate for such period in lieu of all or established by the board with Mr. Vogel. Pursuant to his
part of the notice. Subject to the approval of the board of employment agreement, Mr. Vogel was granted 3,400,000
directors or a suitable committee thereof, Mr. May will be options to purchase Class A common stock and 50,000 shares of
granted options to purchase shares of Charter Class A common restricted stock under our 2001 Stock Incentive Plan. In the
stock and/or receive a grant of restricted stock pursuant to the February 2004 option exchange, Mr. Vogel exchanged his
Charter Communications, Inc. 2001 Stock Incentive Plan, the 3,400,000 options for 340,000 shares of restricted stock and
number and terms of which will be determined as soon as 340,000 performance shares. Mr. Vogel’s initial 50,000 restricted
practicable. Mr. May serves as an independent contractor and is shares vested 25% on the grant date, with the remainder vesting
not entitled to any vacation or eligible to participate in any in 36 equal monthly installments beginning December 2002. The
employee benefit programs of Charter. Charter will reimburse 340,000 shares of restricted stock were to vest over a three-year
Mr. May for reasonable transportation costs from Mr. May’s period, with one-third of the shares vesting on each of the first
residence in Florida or other locations to Charter’s offices and three anniversaries of the grant date. The 340,000 performance
will provide temporary living quarters or reimburse expenses shares were to vest at the end of a three-year period if certain
related thereto. financial criteria were met. Mr. Vogel’s agreement provided that,
Mr. Chang is employed under the terms contained in an if Mr. Vogel is terminated without cause or if Mr. Vogel
offer letter effective December 2, 2003 providing for an annual terminated the agreement for good reason, he is entitled to his
base salary of $400,000 (which has since been increased to aggregate base salary due during the remainder of the term and
$450,000 per year) and eligibility for an annual incentive target full prorated benefits and bonus for the year in which
of 100% of the base salary (based on a combination of personal termination occurs. Mr. Vogel’s agreement included a covenant
performance goals and overall company performance). not to compete for the balance of the initial term or any
Mr. Chang is also eligible to participate in our 2001 Stock renewal term, but no more than one year in the event of
Incentive Plan. Under this plan, Mr. Chang was granted 350,000 termination without cause or by Mr. Vogel with good reason.
options to purchase Class A common stock and 50,000 Mr. Vogel’s agreement entitled him to participate in any
restricted shares on December 9, 2003. Mr. Chang is also disability insurance, pensions or other benefit plans afforded to
entitled to participate in our LTIP. Mr. Chang’s agreement employees generally or to our executives, including our LTIP.
provides that one half of each of his unvested restricted shares We agreed to reimburse Mr. Vogel annually for the cost of term
would immediately vest, and one half of his unvested options of life insurance in the amount of $5 million, although he declined
the initial option grant would vest if he is terminated without this reimbursement in 2002, 2003 and 2004. Mr. Vogel was
cause or if he elects to terminate his employment due to (1) a entitled to reimbursement of fees and dues for his membership
change in our Chief Executive Officer, (2) a change in reporting in a country club of his choice, which he declined in 2002, 2003
relationship to anyone other than the Chief Executive Officer, and 2004, and reimbursement for up to $10,000 per year for tax,
(3) a requirement that the employee relocate, or (4) a change of legal and financial planning services. His agreement also
control of Charter, if terminated without cause. In addition, provided for a car and associated expenses for Mr. Vogel’s use.
Mr. Chang would be entitled to eighteen months of full Mr. Vogel’s agreement provided for automatic one-year renewals
severance benefits at his current compensation rate, plus the pro and also provided that we would cause him to be elected to our
rata portion of his bonus amounts within thirty days after board of directors without any additional compensation.
termination because of any of these events. In light of In February 2005, Charter entered into an agreement with
Mr. Vogel’s resignation, Charter and Mr. Chang have agreed Mr. Vogel setting forth the terms of his resignation. Under the
that he will have until April 15, 2005 to exercise his right to terms of the agreement, Mr. Vogel received in February 2005 all
terminate his employment and receive the foregoing vesting, accrued and unpaid base salary and vacation pay through the
severance and other benefits. In addition, Charter has agreed date of resignation and a lump sum payment equal to the
that it will pay Mr. Chang a special $150,000 bonus, in addition remainder of his base salary during 2005 (totaling $953,425). In
to any other bonuses to which he may be otherwise entitled, addition, he will receive a lump sum cash payment of $500,000
conditioned on Mr. Chang’s continued service as Interim at December 31, 2005, which is subject to reduction to the
co-Chief Financial Officer through March 31, 2005, or any extent of compensation attributable to certain competitive
earlier date on which Charter may appoint a new permanent activities.
Chief Financial Officer, and on his continued employment with
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