Charter 2011 Annual Report Download - page 35

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but could become operative in the future if certain events occur and the restrictions are imposed by Charter’s board of directors.
However, there can be no assurance that Charter’s board of directors would choose to impose these restrictions or that such
restrictions, if imposed, would prevent an ownership change from occurring.
If we are unable to retain key employees, our ability to manage our business could be adversely affected.
Our operational results have depended, and our future results will depend, upon the retention and continued performance of our
management team. On October 11, 2011, we announced that Michael J. Lovett, our President and Chief Executive Officer, would
be resigning from his positions at Charter following a transition period. On February 13, 2012, Thomas M. Rutledge became
President and Chief Executive Officer of Charter. Over the last twelve months, we have experienced other significant changes in
our management team and may experience additional changes in the future. Our ability to hire new key employees for management
positions could be impacted adversely by the competitive environment for management talent in the telecommunications industry.
The loss of the services of key members of management and the inability or delay in hiring new key employees could adversely
affect our ability to manage our business and our future operational and financial results.
Risks Related to Ownership Positions of Charter’s Principal Shareholders
Charter’s principal stockholders own a significant amount of Charter’s common stock, giving them influence over corporate
transactions and other matters.
Members of Charter’s board of directors include directors who are also employed by our principal stockholders, Mr. Darren Glatt
is an employee of Apollo Management, L.P.; Mr. Bruce Karsh is the president of Oaktree Capital Management, L.P.; Mr. Stan
Parker is a senior partner of Apollo Global Management LLC; and Mr. Edgar Lee is a Senior Vice President of Oaktree Capital
Management, L.P. As of December 31, 2011, funds affiliated with AP Charter Holdings, L.P. beneficially held approximately 33%
of the Class A common stock of Charter. Oaktree Opportunities Investments, L.P. and certain affiliated funds beneficially held
approximately 17% of the Class A common stock of Charter. The board of directors of Charter has nominated Jeffrey Marcus as
a candidate for election to the board. Mr. Marcus is a partner of Crestview Partners, L.P. Crestview beneficially held approximately
11% of Charter's outstanding Class A common stock as of December 31, 2011. Charter’s principal stockholders may be able to
exercise substantial influence over all matters requiring stockholder approval, including the election of directors and approval of
significant corporate action, such as mergers and other business combination transactions should these stockholders retain a
significant ownership interest in us. Charter’s principal stockholders are not restricted from investing in, and have invested in,
and engaged in, other businesses involving or related to the operation of cable television systems, video programming, Internet
service, telephone or business and financial transactions conducted through broadband interactivity and Internet services. The
principal stockholders may also engage in other businesses that compete or may in the future compete with us.
The principal stockholders’ substantial influence over our management and affairs could create conflicts of interest if any of them
were faced with decisions that could have different implications for them and us.
Risks Related to Regulatory and Legislative Matters
Our business is subject to extensive governmental legislation and regulation, which could adversely affect our business.
Regulation of the cable industry has increased cable operators' operational and administrative expenses and limited their revenues.
Cable operators are subject to, among other things:
• rules governing the provision of cable equipment and compatibility with new digital technologies;
• rules and regulations relating to subscriber and employee privacy and data security;
• limited rate regulation;
• rules governing the copyright royalties that must be paid for retransmitting broadcast signals;
• requirements governing when a cable system must carry a particular broadcast station and when it must first obtain
retransmission consent to carry a broadcast station;
• requirements governing the provision of channel capacity to unaffiliated commercial leased access programmers;
• rules limiting our ability to enter into exclusive agreements with multiple dwelling unit complexes and control our inside
wiring;
• rules, regulations, and regulatory policies relating to provision of high-speed Internet service, including net neutrality
rules;
• rules, regulations, and regulatory policies relating to provision of voice communications;
• rules for franchise renewals and transfers; and