Charter 2005 Annual Report Download - page 97

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
provides that we will indemnify and hold him harmless to the LIMITATION OF DIRECTORS’ LIABILITY AND INDEMNIFICATION MATTERS
maximum extent permitted by law from and against any claims, Our certificate of incorporation limits the liability of directors to
damages, liabilities, losses, costs or expenses in connection with the maximum extent permitted by Delaware law. The Delaware
or arising out of the performance by him of his duties. The General Corporation Law provides that a corporation may
above agreement also contains confidentiality and non-solicita- eliminate or limit the personal liability of a director for
tion provisions. monetary damages for breach of fiduciary duty as a director,
We have established separation guidelines which generally except for liability for:
apply to all employees in situations where management deter- (1) any breach of the director’s duty of loyalty to the
mines that an employee is entitled to severance benefits. corporation and its shareholders;
Severance benefits are granted solely in management’s discretion
and are not an employee entitlement or guaranteed benefit. The (2) acts or omissions not in good faith or which involve
guidelines provide that persons employed at the level of Senior intentional misconduct or a knowing violation of law;
Vice President may be eligible to receive between six and fifteen (3) unlawful payments of dividends or unlawful stock
months of severance benefits. Currently, all Executive Vice purchases or redemptions; or
Presidents have employment agreements with Charter which (4) any transaction from which the director derived an
provide for specific separation arrangements ranging from the improper personal benefit.
payment of twelve to twenty-four months of severance benefits.
Separation benefits are contingent upon the signing of a Our bylaws provide that we will indemnify all persons
separation agreement containing certain provisions including a whom we may indemnify pursuant thereto to the fullest extent
release of all claims against us. Severance amounts paid under permitted by law.
these guidelines are distinct and separate from any one-time, Insofar as indemnification for liabilities arising under the
special or enhanced severance programs that may be approved Securities Act may be permitted to directors, officers or persons
by us from time to time. controlling us pursuant to the foregoing provisions, we have been
Our senior executives are eligible to receive bonuses informed that in the opinion of the SEC, such indemnification is
according to our 2005 Executive Bonus Plan. Under this plan, against public policy as expressed in the Securities Act and is
our executive officers and certain other management and therefore unenforceable.
professional employees are eligible to receive an annual bonus. We have reimbursed certain of our current and former
Each participating employee would receive his or her target directors, officers and employees in connection with their
bonus if Charter (or such employee’s division) meets specified defense in certain legal actions. See ‘‘Item 13. Certain Relation-
performance measures for revenues, operating cash flow, un- ships and Related Transactions — Other Miscellaneous Relation-
levered free cash flow and customer satisfaction. ships — Indemnification Advances.’’
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