Charter 2008 Annual Report Download - page 24

Table of Contents
targeted bonuses, as detailed in the following chart and as set forth in the Non-Equity Incentive Plan column
of the Summary Compensation Table.
Bonus
Performance Matrixes
Bonus Metrics for 2007 Weight Goals Attainment Attainments
Revenue 30% $6.0 billion 92.50% 27.75%
Adjusted EBITDA 30% $2.1 billion 117% 35.10%
Unlevered Free Cash Flow 20% $1.0 billion 143% 28.60%
Customer Satisfaction
Customer Excellence Index Attainment 10% 4.0 or below 0% 0%
Call Center Service Level 10%
70% or
above 150% 15%
Total Corporate Attainment 106.45%
The Compensation and Benefits Committee has the discretion to increase or decrease payouts under this
annual plan based on organizational factors such as acquisitions or significant transactions, performance
driven by changes in products or markets and other unusual, unforeseen or exogenous situations. The
Compensation and Benefits Committee made certain revisions to the 2007 measures to account for
board-approved actions (i.e., incremental increase in the budget for capital expenditures) after the measures
were initially adopted. In addition to the bonuses approved under the formula for the 2007 Executive Bonus
Plan, Compensation and Benefits Committee approved discretionary bonuses of $150,000 to Mr. Smit,
$100,000 to Mr. Lovett and $50,000 to Mr. Raclin for their outstanding performances in 2007, the differing
amounts of such discretionary bonuses generally reflecting the differing levels of their responsibilities for
Company performance.
(3) Long-Term Incentives
The Company’s long-term incentive award compensation program is designed to recognize scope of
responsibilities, reward demonstrated performance and leadership, motivate future superior performance,
align the interests of the executive with that of our stakeholders, and retain the executives through the term of
the awards. We consider the grant size and the appropriate combination of stock options and full value shares
when making award decisions. In 2006, we began to shift a greater portion of our long-term incentive grants
away from stock options and towards performance units, which we believe will provide for better retention
incentives. We believe that performance units help to drive Company performance through their direct
linkage to controllable business results while, at the same time, rewarding executives for the value created
through share price appreciation. Making grants of full value awards also allowed us to reduce the number of
shares we had previously granted through the use of stock options, thereby providing for greater efficiency
with regard to dilution and the number of new shares coming into the market at any particular time. While the
size of the award is ultimately left to the Compensation and Benefits Committee discretion, in accordance
with our compensation philosophy, grant levels are generally targeted at the median of our industry peer
group.
The 2001 Stock Incentive Plan
The 2001 Stock Incentive Plan provides for the grant of non-qualified stock options, stock appreciation
rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock
and shares of restricted stock (currently not to exceed 20,000,000 shares) as each term is defined in the 2001
Stock Incentive Plan. Generally, options expire 10 years from the grant date. Unless terminated sooner by our
board of directors, the 2001 Stock Incentive Plan will terminate on February 12, 2011, and no option or award
can be granted thereafter under that plan.
As of December 31, 2007, 17,576,766 shares remained available for future grants under the plan
(assuming maximum attainment of performance units). As of December 31, 2007, there were 3,430
participants in the plan.
The plan authorizes the repricing of options, which could 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, or repricing or replacing any
outstanding options by any other method.
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Source: CHARTER COMMUNICATIO, DEF 14A, March 17, 2008