Charter 2004 Annual Report Download - page 88

CHARTER COMMUNICATIONS, INC. 2004 FORM 10-K
Pursuant to a Separation Agreement executed on February 8, LIMITATION OF DIRECTORS’ LIABILITY AND INDEMNIFICATION MATTERS
2005, we will continue to pay Mr. Schumm’s base salary for Our certificate of incorporation limits the liability of directors to
65 weeks at an annual rate of $450,000, and Mr. Schumm will the maximum extent permitted by Delaware law. The Delaware
be paid a bonus of $15,815 at such time as other executives General Corporation Law provides that a corporation may
receive their bonuses. Mr. Schumm’s stock options will continue eliminate or limit the personal liability of a director for
to vest during the 65-week severance period, and he will have monetary damages for breach of fiduciary duty as a director,
60 days thereafter to exercise any vested options. except for liability for:
We have established separation guidelines which generally (1) any breach of the director’s duty of loyalty to the
apply to all employees in situations where management deter- corporation and its shareholders;
mines that an employee is entitled to severance benefits. (2) acts or omissions not in good faith or which involve
Severance benefits are granted solely in management’s discretion intentional misconduct or a knowing violation of law;
and are not an employee entitlement or guaranteed benefit. The (3) unlawful payments of dividends or unlawful stock
guidelines provide that persons employed at the level of Senior purchases or redemptions; or
Vice President may be eligible to receive between six and fifteen (4) any transaction from which the director derived an
months of severance benefits and persons employed at the level improper personal benefit.
of Executive Vice President may be eligible to receive between Our bylaws provide that we will indemnify all persons
nine and eighteen months of severance benefits in the event of whom we may indemnify pursuant thereto to the fullest extent
separation under certain circumstances generally including elimi- permitted by law.
nation of a position, work unit or general staff reduction. Insofar as indemnification for liabilities arising under the
Separation benefits are contingent upon the signing of a Securities Act may be permitted to directors, officers or persons
separation agreement containing certain provisions including a controlling us pursuant to the foregoing provisions, we have
release of all claims against us. Severance amounts paid under been informed that in the opinion of the SEC, such indemnifica-
these guidelines are distinct and separate from any one-time, tion is against public policy as expressed in the Securities Act
special or enhanced severance programs that may be approved and is therefore unenforceable.
by us from time to time. We have reimbursed certain of our current and former
Our senior executives are eligible to receive bonuses directors, officers and employees in connection with their
according to our 2005 Executive Bonus Plan. Under this plan, defense in certain legal actions. See ‘‘Item 13. Certain Relation-
our executive officers and certain other management and ships and Related Transactions — Other Miscellaneous Relation-
professional employees are eligible to receive an annual bonus. ships — Indemnification Advances.’’
Each participating employee would receive his or her target
bonus if Charter (or such employee’s division) meets specified
performance measures for revenues, operating cash flow, free
cash flow and customer satisfaction.
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