TIME WARNER CABLE INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
|
|
|
Filed by the Registrant þ
|
|
Filed by a Party other than the
Registrant o |
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to § 240.14a-12
Time Warner Cable Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ |
|
No fee required. |
|
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
(1) |
|
Title of each class of securities to which transaction applies: |
|
|
|
|
|
|
(2) |
|
Aggregate number of securities to which transaction applies: |
|
|
|
|
|
|
(3) |
|
Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it
was determined): |
|
|
|
|
|
|
(4) |
|
Proposed maximum aggregate value of transaction: |
|
|
|
|
|
|
(5) |
|
Total fee paid: |
|
|
|
|
|
o |
|
Fee paid previously with preliminary materials. |
|
o |
|
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing. |
|
(1) |
|
Amount Previously Paid: |
|
|
|
|
|
|
(2) |
|
Form, Schedule or Registration Statement No.: |
|
|
|
|
|
|
(3) |
|
Filing Party: |
|
|
|
|
|
|
(4) |
|
Date Filed: |
|
|
|
|
|
April 20, 2009
Dear Stockholder:
We cordially invite you to attend Time Warner Cable Inc.s
annual meeting of stockholders. We also welcome our new
stockholders who received Time Warner Cable shares as a result
of the recent spin-off of our company from Time Warner Inc. The
meeting will be held on Wednesday, June 3, 2009, at
11:00 a.m. at the Companys Mid-Ohio Technical
Operations Center at 3760 Interchange Road, Columbus, Ohio
43204. A map with directions to the meeting is provided on the
back cover of the Proxy Statement.
As a stockholder, you will be asked to vote on a number of
important matters, which are listed in the Notice of Annual
Meeting of Stockholders. The Board of Directors recommends a
vote FOR the proposals listed as items 1 and 2 in
the Notice.
We are again this year taking advantage of Securities and
Exchange Commission rules that allow companies to furnish proxy
materials to their stockholders on the Internet. We believe that
these rules allow us to provide our stockholders with the
information they need, while lowering the costs of delivery and
reducing the environmental impact of producing and distributing
materials for our annual meeting. Under these new rules, you can
vote in several ways. Instructions are provided in our
communications to you. If you received a Notice of Internet
Availability of Proxy Materials in the mail, you can vote over
the Internet, or, if you request printed copies of the proxy
materials by mail, you also can vote by mail or by telephone.
If you are planning to attend the annual meeting in person,
because of security procedures, you will need to register in
advance to gain admission to the meeting. You can register
by calling
1-866-892-8925
by June 2, 2009. In addition to registering in advance, you
will be required to present government-issued identification
(e.g., drivers license or passport) to enter the
meeting. The meeting also will be audiocast live on the Internet
at www.timewarnercable.com/investors.
I look forward to greeting those of you who are able to attend
the annual meeting.
Sincerely,
Glenn A. Britt
Chairman, President and
Chief Executive Officer
PLEASE PROMPTLY SUBMIT YOUR
PROXY
Time Warner Cable Inc.
60 Columbus Circle
New York, NY 10023
The Annual Meeting (the Annual Meeting) of
Stockholders of Time Warner Cable Inc. (the Company)
will be held on Wednesday, June 3, 2009 at 11:00 a.m.
(local time). The meeting will take place at:
Time Warner Cable Inc.
Mid-Ohio Technical Operations Center
3760 Interchange Road
Columbus, Ohio 43204
The purposes of the meeting are:
|
|
|
|
1.
|
To elect twelve directors for a term of one year, and until
their successors are duly elected and qualified;
|
|
|
2.
|
To ratify the appointment of the firm of Ernst & Young
LLP as independent auditor of the Company for 2009; and
|
|
|
3.
|
To transact such other business as may properly come before the
Annual Meeting.
|
The close of business on April 8, 2009 is the record date
for determining stockholders entitled to vote at the Annual
Meeting. Only holders of the Companys common stock, par
value $0.01 per share (the Common Stock), as of the
record date are entitled to vote on the matters listed in this
Notice of Annual Meeting.
Your vote is important. Whether or not you plan to attend the
Annual Meeting in person, it is important that your shares be
represented. Please follow the instructions in the Notice you
received by mail or
e-mail and
vote as soon as possible. Any stockholder of record who is
present at the meeting may vote in person instead of by proxy,
thereby canceling any previous proxy. You may not appoint more
than three persons to act as your proxy at the meeting.
Please note that, if you plan to attend the Annual Meeting in
person, you will need to register in advance to be admitted.
You may register in advance by telephone at
1-866-892-8925.
The annual meeting will start promptly at
11:00 a.m. To avoid disruption, admission may be
limited once the meeting begins.
Time Warner Cable Inc.
Marc Lawrence-Apfelbaum
Executive Vice President, General
Counsel and Secretary
April 20, 2009
TABLE OF
CONTENTS
|
|
|
|
|
|
|
Page
|
|
|
|
|
i
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
6
|
|
|
|
|
7
|
|
|
|
|
7
|
|
|
|
|
7
|
|
|
|
|
8
|
|
|
|
|
8
|
|
|
|
|
8
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
|
14
|
|
|
|
|
14
|
|
|
|
|
16
|
|
|
|
|
16
|
|
|
|
|
17
|
|
|
|
|
17
|
|
|
|
|
17
|
|
|
|
|
18
|
|
|
|
|
19
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
31
|
|
|
|
|
32
|
|
|
|
|
34
|
|
|
|
|
35
|
|
|
|
|
37
|
|
|
|
|
40
|
|
|
|
|
40
|
|
|
|
|
44
|
|
|
|
|
45
|
|
|
|
|
58
|
|
|
|
|
60
|
|
|
|
|
60
|
|
|
|
|
60
|
|
|
|
|
60
|
|
|
|
|
62
|
|
|
|
|
66
|
|
|
|
|
66
|
|
|
|
|
67
|
|
|
|
|
67
|
|
|
|
|
67
|
|
|
|
|
68
|
|
|
|
|
68
|
|
|
|
|
68
|
|
|
|
|
69
|
|
|
|
|
69
|
|
|
|
|
69
|
|
|
|
|
69
|
|
|
|
|
70
|
|
|
|
|
71
|
|
|
|
|
71
|
|
TIME WARNER CABLE
INC.
60 Columbus Circle
New York, NY 10023
PROXY
STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Time Warner
Cable Inc., a Delaware corporation (TWC or the
Company), for use at the Annual Meeting of the
Companys stockholders (the Annual Meeting) to
be held on Wednesday, June 3, 2009, at the Companys
Mid-Ohio Technical Operations Center at 3760 Interchange Road,
Columbus, Ohio 43204 commencing at 11:00 a.m., local time,
and at any adjournment or postponement, for the purpose of
considering and acting upon the matters set forth in the
accompanying Notice of Annual Meeting of Stockholders.
Stockholders attending the Annual Meeting in person should refer
to the driving directions provided on the back cover of the
Proxy Statement.
This year the Company is again taking advantage of Securities
and Exchange Commission (SEC) rules that allow
companies to furnish proxy materials to stockholders via the
Internet. Accordingly, the Company is sending a Notice of
Internet Availability of Proxy Materials (the
Notice) to its stockholders of record and beneficial
owners, unless they have directed the Company to provide the
materials in a different manner. The Notice provides
instructions on how to access and review all of the important
information contained in the Companys Proxy Statement and
Annual Report to Stockholders, as well as how to submit a proxy
over the Internet. If a stockholder receives the Notice and
would still like to receive a printed copy of the Companys
proxy materials, instructions for requesting these materials are
included in the Notice. The Company plans to mail the Notice to
stockholders by April 24, 2009. The Company will continue to
mail a printed copy of this Proxy Statement and form of proxy to
certain stockholders, and it expects that mailing to begin on or
about April 23, 2009.
At the close of business on April 8, 2009, the record date
for determining the stockholders entitled to notice of, and to
vote at, the Annual Meeting, there were outstanding and entitled
to vote 352,335,722 shares of the Companys common
stock, par value $0.01 per share (Common Stock). For
information about stockholders eligibility to vote at the
Annual Meeting, shares outstanding on the record date and the
ways to submit and revoke a proxy, please see Voting at
the Annual Meeting, below.
Each issued and outstanding share of Common Stock has one vote
on any matter submitted to a vote of stockholders.
Annual
Report
A copy of the Companys Annual Report to Stockholders for
the year 2008 is available on the Companys website at
www.timewarnercable.com/annualmeetingmaterials.
Recommendations
of the Board of Directors
The Board of Directors recommends a vote FOR the election
of each of the twelve nominees for election as directors and
FOR ratification of the appointment of Ernst &
Young LLP as the Companys independent auditor for 2009.
Important
Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to be Held on Wednesday,
June 3, 2009:
This Proxy Statement and the Companys 2008 Annual Report
to Stockholders are available at
www.timewarnercable.com/annualmeetingmaterials.
1
CORPORATE
GOVERNANCE
The
Companys Separation from Time Warner Inc.
On March 12, 2009, the separation of TWC from Time Warner
Inc. (Time Warner) was completed pursuant to a
Separation Agreement dated as of May 20, 2008 (the
Separation Agreement) between TWC and certain of its
subsidiaries and Time Warner and certain of its subsidiaries.
The separation took the form of Time Warners pro rata
dividend of all shares of TWC Common Stock held by Time Warner
to holders of record of Time Warners common stock
(Time Warner Common Stock) (the Spin-Off
Dividend or the Distribution) as of
8:00 p.m. on March 12, 2009, the record date for the
Spin-Off Dividend. Accordingly, on March 12, 2009, pursuant
to the Separation Agreement, Time Warner transferred its
beneficial ownership of Common Stock to a distribution agent for
the benefit of Time Warners stockholders, and, as a
result, Time Warner no longer has any ownership interest in TWC
(the Separation). These shares of Common Stock were
distributed on March 27, 2009 to Time Warners
stockholders of record on March 12, 2009 with each such
Time Warner stockholder receiving .083670 of a share of Common
Stock for each share of Time Warner Common Stock held on the
record date. After this distribution, Time Warner effected a
one-for-three
reverse stock split. In connection with, and before, the
Separation, on March 12, 2009, the Company:
|
|
|
|
|
paid a special cash dividend of $10.27 per share to holders of
record of its outstanding Class A common stock, par value
$0.01 per share (Class A common stock), and
Class B common stock, par value $0.01 per share
(Class B common stock), on March 11, 2009
(the Special Dividend);
|
|
|
|
filed with the Secretary of State of the State of Delaware a
second amended and restated certificate of incorporation (the
Amended Charter), pursuant to which, among other
things, each outstanding share of the Companys
Class A common stock and Class B common stock
automatically converted into one share of Common Stock, (the
Recapitalization); and
|
|
|
|
effected a one-for-three reverse stock split of its Common Stock
(the Reverse Stock Split).
|
Unless otherwise indicated in this Proxy Statement,
information about TWCs or Time Warners equity
securities prior to March 12, 2009 has not been adjusted to
reflect the Separation, the Distribution or the TWC and Time
Warner reverse stock splits. The Companys Common Stock
is listed for trading on the New York Stock Exchange (the
NYSE). As a result of the Separation, the Company is
no longer considered a controlled company under NYSE
governance requirements.
General
The Company is committed to maintaining strong corporate
governance practices that allocate rights and responsibilities
among stockholders, the Board of Directors and management in a
manner that benefits the long-term interests of the
Companys stockholders. Accordingly, the Companys
corporate governance practices are designed not merely to
satisfy regulatory requirements, but to provide for effective
oversight and management of the Company.
The Board has devoted substantial attention to the subject of
corporate governance. Among other things, the Board has
established a Nominating and Governance Committee and has
developed a Corporate Governance Policy. The Board refines this
Policy from time to time as it deems necessary. The Corporate
Governance Policy sets forth the basic rules of the
road to guide how the Board and its committees operate.
The Board of Directors also regularly holds executive sessions
without management present, conducts examinations of
managements and the Boards performance, has adopted
a code of conduct for employees and has enacted a set of ethics
guidelines specifically for outside directors. The Board of
Directors engages in a regular process of reviewing its
corporate governance practices, including comparing its
practices with those recommended by various corporate governance
groups, the expectations of the Companys stockholders, and
the practices of other leading public companies. The Company
also regularly reviews its practices in light of proposed and
adopted laws and regulations, including the Sarbanes-Oxley Act
of 2002, the rules of the SEC, and the rules and listing
standards of the NYSE.
2
Information on the Companys corporate governance is
available to the public under Corporate Governance
at www.timewarnercable.com/investors on the
Companys website. The information on the website includes:
the Companys by-laws, its Corporate Governance Policy
(which includes the Boards categorical standards for
determining director independence), the charters of the
Boards four standing committees, the Companys codes
of conduct, and information regarding the process by which
shareholders may communicate with members of the Board of
Directors. These documents are also available in print by
writing to the Companys Corporate Secretary at the
following address: Time Warner Cable Inc., 60 Columbus Circle,
New York, New York 10023, Attn: General Counsel.
The remainder of this section of the Proxy Statement summarizes
the key features of the Companys corporate governance
practices:
Board
Size
The number of directors constituting the full Board is currently
set at twelve. The Board of Directors has adopted a policy,
consistent with the Amended Charter and the Companys
by-laws, that it may determine the size of the Board from time
to time. In establishing its size, the Board considers a number
of factors, including (i) resignations and retirements from
the current Board, (ii) the availability of appropriate and
qualified candidates, (iii) balancing the desire of having
a small enough Board to facilitate deliberations with, at the
same time, having a large enough Board to have the diversity of
backgrounds, professional experience and skills so that the
Board and its committees can effectively perform their
responsibilities in overseeing the Companys businesses and
(iv) the goal of having an appropriate mix of inside and
independent directors.
Criteria
for Membership on the Board
While a significant amount of public attention has been focused
on the need for directors to be independent,
independence is just one of the important factors that the Board
and its Nominating and Governance Committee take into
consideration in selecting nominees for director. The Nominating
and Governance Committee and the Board of Directors apply the
same criteria to all candidates, regardless of whether the
candidate is proposed by a stockholder or is identified through
some other source.
Overall Composition. As a threshold
matter, the Board of Directors believes it is important for the
Board as a whole to reflect an appropriate combination of
skills, professional experience, and diversity of backgrounds in
light of the Companys current and future business needs.
Personal Qualities. Each director must
possess certain personal qualities, including financial literacy
and a demonstrated reputation for integrity, judgment, business
acumen, and high personal and professional ethics. In addition,
each director must be at least 21 years of age at the
commencement of service as a director.
Commitment to the Company and its
Stockholders. Each director must have the
time and ability to make a constructive contribution to the
Board, as well as a clear commitment to fulfilling the
directors fiduciary duties and serving the interests of
all the Companys stockholders.
Other Commitments. Each director must
satisfy the requirements of antitrust laws that limit service as
an officer or director of a significant competitor of the
Company. In addition, in order to ensure that directors have
sufficient time to devote to their responsibilities, the Board
determined that directors should generally serve on no more than
five other public company boards.
Additional Criteria for Incumbent
Directors. During their terms, all incumbent
directors on the Companys Board are expected to attend the
meetings of the Board and committees on which they serve and the
annual meetings of stockholders; to stay informed about the
Company and its business; to participate in discussions; to
comply with applicable Company policies; and to provide advice
and counsel to the Companys management.
Additional Criteria for New
Directors. As part of its annual assessment
of the Boards composition in light of the Companys
current and expected business needs, the Nominating and
Governance Committee has
3
identified additional criteria for new members of the Board. The
following attributes may evolve over time depending on changes
in the Board and the Companys business needs and
environment, and may be changed before the proxy statement for
the 2010 annual meeting of stockholders is furnished to
stockholders.
|
|
|
|
|
Professional Experience. New candidates
for the Board should have significant experience in areas such
as the following: (i) senior officer (e.g., president,
officer or chief financial officer) of a major corporation (or a
comparable position in the government, academia or non-profit
sector); or (ii) a high-level position and expertise in one
of the following areascable, telecommunications, media and
entertainment, marketing or consumer technology.
|
|
|
|
Diversity. The Nominating and
Governance Committee also believes it would be desirable for new
candidates for the Board to enhance the gender, ethnic,
and/or
geographic diversity of the Board.
|
|
|
|
Committee Eligibility. In addition to
satisfying the independence requirements that apply to directors
generally (see below), the Nominating and Governance Committee
believes that it would be desirable for new candidates for the
Board to satisfy the requirements for serving on the
Boards committees, as set forth in the charters for those
committees and applicable regulations.
|
|
|
|
Director Experience. The Nominating and
Governance Committee believes it would also be desirable for
candidates for the Board to have experience as a director of a
public corporation.
|
Independence. Under the Companys
Amended Charter, at least 50% of the directors on the Board must
be independent. The Board has determined that nine of the twelve
current directors, each of whom is also a nominee for director
(or 75% of the Board), are independent in accordance with the
Companys criteria. The Board applies the following NYSE
criteria in making its independence determinations:
|
|
|
|
|
No Material Relationship. The director
must not have any material relationship with the Company. In
making this determination, the Board considers all relevant
facts and circumstances, including commercial, charitable, and
familial relationships that exist, either directly or
indirectly, between the director and the Company.
|
|
|
|
Employment. The director must not have
been an employee of the Company at any time during the past
three years. In addition, a member of the directors
immediate family (including the directors spouse; parents;
children; siblings; mothers-, fathers-, brothers-, sisters-,
sons- and
daughters-in-law;
and anyone who shares the directors home, other than
household employees) must not have been an executive officer of
the Company in the prior three years.
|
|
|
|
Other Compensation. The director or
immediate family member (as an executive officer) must not have
received more than $100,000 per year in direct compensation from
the Company, other than in the form of director fees, pension,
or other forms of deferred compensation, during the past three
years.
|
|
|
|
Auditor Affiliation. The director must
not be a current partner or employee of the Companys
internal or external auditor and the directors immediate
family member must not be a current employee of such auditor who
participates in the firms audit, assurance or tax
compliance (but not tax planning) practice or a current partner
of such auditor. In addition, the director or an immediate
family member must not have been within the last three years a
partner or employee of such firm who personally worked on the
Companys audit.
|
|
|
|
Interlocking Directorships. During the
past three years, the director or immediate family member cannot
have been employed as a non-employee director or an executive
officer by another entity where one of the Companys or its
former parent company, Time Warners current executive
officers served at the same time on the compensation committee.
|
|
|
|
Business Transactions. The director
must not be an employee of another entity that, during any one
of the past three years, received payments from the Company, or
made payments to the Company, for property or services that
exceed the greater of $1 million or 2% of the other
entitys annual consolidated gross revenues. In addition, a
member of the directors immediate family cannot have
|
4
|
|
|
|
|
been an executive officer of another entity that, during any one
of the past three years, received payments from the Company, or
made payments to the Company, for property or services that
exceed the greater of $1 million or 2% of the other
entitys annual consolidated gross revenues.
|
|
|
|
|
|
Additional Categorical Criteria. In
addition to applying the NYSE requirements summarized above, the
Board has also developed categorical standards, which it uses to
guide it in determining whether a material
relationship exists with the Company that would affect a
directors independence:
|
|
|
|
|
>
|
Charitable Contributions. Discretionary
charitable contributions by the Company to established
non-profit entities with which a director or a member of the
directors family is affiliated will generally be deemed
not to create a material relationship, unless they occurred
within the last three years and (i) were inconsistent with
the Companys philanthropic practices; or (ii) were
provided to an organization where the director or spouse is an
executive officer or director and the Companys
contributions for the most recently completed fiscal year
represent more than (a) the greater of $100,000 or 10% of
that organizations annual gross revenues for organizations
with gross revenues up to $10 million per year or
(b) the greater of $1 million or 2% of that
organizations annual gross revenues for organizations with
gross revenues of more than $10 million per year; or
(iii) the aggregate amount of the Companys
contributions to the organizations where a director or spouse is
an executive officer or director is more than the greater of
$1 million or 2% of all such organizations annual
gross revenues.
|
|
|
>
|
Employment and Benefits. The employment by the
Company of a member of a directors family will generally
be deemed not to create a material relationship, unless such
employment involves employment at a salary of more than $60,000
per year of a directors current spouse, domestic partner,
or child. Further, vested and non-forfeitable equity-based
benefits and retirement benefits provided to directors or their
family members under qualified plans as a result of prior
employment will generally be deemed not to create a material
relationship.
|
|
|
>
|
Other Transactions. Transactions between the
Company and another entity with which a director or a member of
a directors family is affiliated will generally be deemed
not to create a material relationship unless (i) they are
the type set forth above under Business
Transactions; (ii) they occurred within the last
three years and were inconsistent with other transactions in
which the Company has engaged with third parties;
(iii) they occurred within the last three years and the
director is an executive officer, employee, or substantial
owner, or an immediate family member (as defined in the NYSE
rules) is an executive officer, of the other entity and such
transactions represent more than 2% of the other entitys
gross revenues for the prior fiscal year or more than 5% of the
Companys consolidated gross revenues for its prior fiscal
year.
|
|
|
>
|
Interlocking Directorships. Service by an
employee of the Company as a director of an entity where one of
the Companys directors or directors family members
serves as a non-employee director or an executive officer will
generally be deemed not to create a material relationship,
unless the employee (i) is an executive officer of the
Company; (ii) reports directly to the Board or a committee
of the Board; or (iii) has annual compensation approved by
the Boards Compensation Committee. In addition, service by
an employee of the Company as a director of an entity where one
of the Companys directors or a member of the
directors family serves as a non-employee director will
generally be deemed not to create a material relationship.
|
|
|
>
|
Educational and Other Affiliations. Attendance
by an employee of the Company at an educational institution
affiliated with one of the Companys directors or a member
of the directors family, or membership by an employee of
the Company in a professional association, social, fraternal or
religious organization, club or institution affiliated with a
Company director or member of the directors family, will
generally be deemed not to create a material relationship.
|
|
|
>
|
Security Ownership. Ownership by an employee
of the Company of the securities of an entity where one of the
Companys directors or a member of the directors
family serves as a director or an employee will generally be
deemed not to create a material relationship, unless
(i) the Company
|
5
|
|
|
|
|
employee (a) is an executive officer of the Company or
reports directly to the Board or a committee of the Board or has
annual compensation approved by the Boards Compensation
Committee and (b) beneficially owns more than 5% of any
class of the other entitys voting securities; and
(ii) the Company director or a member of a directors
family is a director or executive officer of the other entity.
|
|
|
|
|
|
Independent Judgment. Finally, in
addition to the foregoing independence criteria, which relate to
a directors relationship with the Company, the Board also
requires that independent directors be free of any other
affiliationwhether with the Company or another
entitythat would interfere with the exercise of
independent judgment.
|
Director
Nomination Process
There are a number of different ways in which an individual may
be nominated for election to the Board of Directors.
Nominations Developed by the Nominating and Governance
Committee. The Nominating and Governance
Committee may identify and propose an individual for election to
the Board. This involves the following steps:
|
|
|
|
|
Assessment of Needs. As described
above, the Nominating and Governance Committee conducts periodic
assessments of the overall composition of the Board in light of
the Companys current and expected business needs and, as a
result of such assessments, the Committee may establish specific
qualifications that it will seek in Board candidates. The
Committee reports on the results of these assessments to the
full Board of Directors.
|
|
|
|
Identifying New Candidates. In light of
such assessments, the Committee may seek to identify new
candidates for the Board who possess the specific qualifications
established by the Committee and satisfy the other requirements
for Board service. In identifying new director candidates, the
Committee seeks advice and names of candidates from Committee
members, other members of the Board, members of management, and
other public and private sources. The Committee may also, but
need not, retain a search firm in order to assist it in these
efforts.
|
|
|
|
Reviewing New Candidates. The Committee
reviews the potential new director candidates identified through
this process. This involves reviewing the candidates
qualifications as compared to the specific criteria established
by the Committee and the more general criteria established by
the by-laws and Corporate Governance Policy. The Committee may
also select certain candidates to be interviewed by one or more
Committee members.
|
|
|
|
Reviewing Incumbent Candidates. On an
annual basis, the Committee also reviews incumbent candidates
for renomination to the Board. This review involves an analysis
of the criteria set forth above that apply to incumbent
directors.
|
|
|
|
Recommending Candidates. The Committee
recommends a slate of candidates for the Board of Directors to
submit for approval to the stockholders at the annual
stockholders meeting. This slate of candidates may include both
incumbent and new nominees. In addition, apart from this annual
process, the Committee may, in accordance with the by-laws,
recommend that the Board elect new members of the Board who will
serve until the next annual stockholders meeting.
|
Stockholder Nominations Submitted to the
Committee. Stockholders may also submit names
of director candidates, including their own, to the Nominating
and Governance Committee for its consideration. The process for
stockholders to use in submitting suggestions to the Nominating
and Governance Committee is set forth below at Other
Procedural MattersProcedures for Submitting Director
Recommendations and Nominations.
Stockholder Nominations Submitted to
Stockholders. Stockholders may choose to
submit nominations directly to the Companys stockholders.
The Companys by-laws set forth the process that
stockholders may use if they choose this approach, which is
described below at Other Procedural
MattersProcedures for Submitting Director Recommendations
and Nominations.
6
Director Elections. In connection with
the Separation, the Companys by-laws were amended to
provide, among other things, that in any uncontested election of
directors, each person receiving a majority of the votes cast
will be deemed elected. Any abstentions or broker non-votes will
not be counted as a vote cast. Accordingly, any new director
nominee in an uncontested election who receives more
against votes than for votes will not be
elected to the Board. If any incumbent director receives more
against votes than for votes, he or she
must submit an offer to resign from the Board no later than two
weeks after the certification by the Company of the voting
results. The Board will then consider the resignation offer and
may either (i) accept the resignation offer or
(ii) reject the resignation offer and seek to address the
underlying cause(s) of the against votes. The Board
is required to make its determination within 90 days
following the certification of the stockholder vote and make a
public announcement of its decision, including a statement
regarding the reasons for its decision if the Board rejects the
resignation offer. This procedure also provides that the
Chairman of the Nominating and Governance Committee has the
authority to manage the Boards review of the resignation
offer, unless it is the Chairman of the Nominating and
Governance Committee who has received the majority-withheld
vote, in which case, the remaining independent directors who
received a majority of the votes cast will select a director,
which director will have the authority otherwise delegated to
the Chairman of the Nominating and Governance Committee, to
manage the process. In any contested election of directors, the
election will be subject to a plurality vote standard, where the
persons receiving the highest numbers of the votes cast, up to
the number of directors to be elected in such election, will be
deemed elected. A contested election is generally one in which
the number of persons nominated exceeds the number of directors
to be elected.
Board
Responsibilities
The Boards primary responsibility is to seek to maximize
long-term stockholder value. The Board selects senior management
of the Company, monitors managements and the
Companys performance, and provides advice and counsel to
management. Among other things, the Board at least annually
reviews the Companys long-term strategy and longer-term
business plan and also approves an annual budget for the
Company. The Board also reviews and approves transactions in
accordance with guidelines that the Board may adopt from time to
time. In fulfilling the Boards responsibilities, directors
have full access to the Companys management, internal and
external auditors, and outside advisors.
Board
Meetings and Executive Sessions
The Board of Directors holds at least five meetings each year,
including at least four quarterly meetings and generally one
meeting devoted to addressing the Companys strategy. In
2008, the Board of Directors met ten times. The meeting schedule
is normally established in the summer of the previous year. The
Board of Directors also communicates informally with management
on a regular basis.
Non-employee directors meet by themselves, without management or
employee directors present, at every regularly scheduled Board
meeting. Additionally, the Independent Directors (as defined
below) meet together without any other directors or management
present at least twice a year. Any director may request
additional executive sessions.
These executive sessions are led by the Chair of the committee
that is responsible for the subject matter at issue (e.g., the
Audit Committee Chair would lead a discussion of audit-related
matters). When it is not clear which committee has specific
responsibility for the subject matter, the Lead Director
presides.
Board
Leadership
The Companys Corporate Governance Policy provides that the
Nominating and Governance Committee may from time to time make
recommendations to the Board regarding the leadership structure
of the Board, including whether to combine or separate the
positions of Chairman and Chief Executive Officer, or to
establish the position of lead or
presiding director. In connection with the
Separation, the Board has named Glenn A. Britt to the combined
positions of Chairman and Chief Executive Officer and has named
Peter R. Haje to serve as the Lead Director.
7
Committees
of the Board
The Board has four standing committees: the Audit Committee, the
Compensation Committee, the Nominating and Governance Committee,
and the Finance Committee, which was constituted in December
2008. The Board may eliminate or create additional committees as
it deems appropriate.
Despite the availability of a one-year phase-in period following
the Separation for full independence of membership under NYSE
rules, each of the Audit Committee, the Nominating and
Governance Committee and the Compensation Committee is composed
entirely of Independent Directors. The Chair of each committee
is elected by the Board, generally upon the recommendation of
the Nominating and Governance Committee, and is expected to be
rotated periodically. Each committee also holds regular
executive sessions at which only committee members are present.
Each committee is also authorized to retain its own outside
counsel and other advisors as it desires.
As noted above, charters for each standing committee are
available on the Companys website, but a brief summary of
the committees responsibilities follows:
Audit Committee. The Audit Committee
assists the Board of Directors in fulfilling its
responsibilities in connection with the Companys
(i) independent auditors, (ii) internal auditors,
(iii) financial statements, (iv) earnings releases and
guidance, as well as (v) the Companys compliance
program, internal controls, and risk management. The Board has
determined that each member of the Audit Committee qualifies as
an audit committee financial expert under the rules of the SEC
implementing section 407 of the Sarbanes-Oxley Act and
meets the independence and experience requirements of the NYSE
and the federal securities laws.
Nominating and Governance
Committee. The Nominating and Governance
Committee is responsible for assisting the Board in relation to
(i) corporate governance, (ii) director nominations,
(iii) committee structure and appointments, (iv) Chief
Executive Officer (CEO) performance evaluations and
succession planning, (v) Board performance evaluations,
(vi) director compensation, (vii) regulatory matters
relating to corporate governance, (viii) stockholder
proposals and communications, and (ix) related person
transactions.
Compensation Committee. The
Compensation Committee is responsible for (i) approving
compensation and employment agreements for, and reviewing
benefits provided to, certain of the Companys senior
executives, (ii) overseeing the Companys disclosure
regarding executive compensation, (iii) administering the
Companys equity-based compensation plans and
(iv) reviewing the Companys overall compensation
structure and benefit plans. A
sub-committee
of the Compensation Committee is responsible for certain
executive compensation matters, including (i) reviewing and
approving corporate goals and objectives relevant to the
compensation of the CEO, each of the other executive officers
and each of the other employees whose annual total compensation
has a value of $2 million or more (the Senior
Executives), (ii) evaluating the performance of the
CEO and the Senior Executives, and (iii) setting the
compensation level of the CEO and the Senior Executives.
Finance Committee. The Finance
Committee is responsible for reviewing and approving the
Companys financing activity and assisting the Board in
overseeing the Companys (i) capital structure and
financing strategies, (ii) insurance program, and
(iii) defined benefit pension plan.
Board
Self-Evaluation
The Board of Directors conducts a self-evaluation of its
performance annually, which includes a review of the
Boards composition, responsibilities, structure, processes
and effectiveness. Each standing committee of the Board also
conducts a similar self-evaluation with respect to such
committee.
Director
Orientation and Education
Each individual, upon joining the Board of Directors, is
provided with an orientation regarding the role and
responsibilities of the Board and the Companys operations.
As part of this orientation, new directors have opportunities to
meet with members of the Companys senior management. The
Company is also committed to the ongoing education of its
directors. From time to time, the Companys executives make
presentations to the Board regarding their respective areas. In
addition, the Company reimburses directors for reasonable
expenses relating to ongoing director education.
8
Non-Employee
Director Compensation and Stock Ownership
The Board of Directors is responsible for establishing
compensation for the Companys non-employee directors who
are not active employees of the Company. At least every two
years, the Nominating and Governance Committee reviews the
compensation for non-employee directors, including compensation
provided to non-employee directors at other companies, and makes
a recommendation to the Board for its approval. (For details on
the compensation currently provided to non-employee directors,
please see
CompensationDirector
Compensation.)
It is also the Boards policy that all directors who are
not actively employed by the Company are required to own the
Companys stock (whether as a result of exercising stock
options, receipt of shares from the Company or the purchase of
shares). It is expected that, within three years of joining the
Board, each director will own at least the number of shares of
the Companys stock, or stock-based equivalents, that have
been awarded to him or her pursuant to the Companys
compensation plans for Independent Directors, less any shares
sold by the director for the purpose of paying taxes related to
such awards.
The Company also expects all directors to comply with all
federal, state and local laws regarding trading in securities of
the Company and disclosing material, non-public information
regarding the Company, and the Company has procedures in place
to assist directors in complying with these laws.
Codes of
Conduct
In order to help assure the highest levels of business ethics at
the Company, the Board of Directors has adopted the following
three codes of conduct, which are posted on the Companys
website at
www.timewarnercable.com/investors.
Standards of Business Conduct. The
Companys Standards of Business Conduct apply to the
Companys employees, including any employee directors. The
Standards of Business Conduct establish policies pertaining to
employee conduct in the workplace, electronic communications and
information security, accuracy of books, records and financial
statements, securities trading, confidentiality, conflicts of
interest, fairness in business practices, the Foreign Corrupt
Practices Act, antitrust laws and political activities and
solicitations.
Code of Ethics for Principal Executive and Senior
Financial Officers. The Companys Code
of Ethics for Principal Executive and Senior Financial Officers
applies to certain officers of the Company, including the
Companys Chief Executive Officer, Chief Financial Officer,
Controller, and other senior executives performing senior
financial officer functions. The code serves as a supplement to
the Standards of Business Conduct. Among other things, the code
mandates that the designated officers engage in honest and
ethical conduct, avoid conflicts of interest and disclose any
material transaction or relationship that could give rise to a
conflict, protect the confidentiality of non-public information
about the Company, work to achieve responsible use of the
Companys assets and resources, comply with all applicable
governmental rules and regulations and promptly report any
possible violation of the code. Additionally, the code requires
that these individuals promote full, fair, understandable and
accurate disclosure in the Companys publicly filed reports
and other public communications and sets forth standards for
accounting practices and records. Individuals to whom the code
applies are held accountable for their adherence to it. Failure
to observe the terms of this code or the Standards of Business
Conduct can result in disciplinary action (including termination
of employment).
Guidelines for Non-Employee
Directors. The Guidelines for Non-Employee
Directors assist the Companys non-employee directors in
fulfilling their fiduciary and other duties to the Company. In
addition to affirming the directors duties of care and
loyalty, the guidelines set forth specific policies addressing,
among other things, securities trading and reporting
obligations, gifts, the Foreign Corrupt Practices Act, political
contributions and antitrust laws.
Communication
with the Directors
The Companys Independent Directors have approved a process
for stockholders to communicate with directors. This process is
described below at Other Procedural
MattersCommunicating with the Board of Directors.
9
DIRECTORS
Term
The Companys directors are elected annually by the holders
of Common Stock. The nominees for director at the Annual Meeting
will be elected to serve for a one-year term until the next
annual meeting of stockholders and until their successors have
been duly elected and qualified or until their earlier death,
resignation or retirement.
Director
Independence and Qualifications
As set forth in the Companys Corporate Governance Policy,
in selecting its slate of nominees for election to the Board,
the Nominating and Governance Committee and the Board have
evaluated, among other things, each nominees independence,
satisfaction of regulatory requirements, financial literacy,
personal and professional accomplishments and experience in
light of the needs of the Company and, with respect to incumbent
directors, past performance on the Board. See Corporate
Governance Criteria for Membership on the
Board. Each of the nominees is currently a director of the
Company. The Amended Charter requires that at least 50% of the
Board be independent. The Board has determined that nine of the
twelve current and incumbent directors (or 75% of the Board)
have no material relationship with the Company either directly
or indirectly and are independent within the meaning
of the listing requirements of the NYSE and the Companys
more rigorous independence standards (such directors, the
Independent Directors). Specifically, the Board has
identified Mses. Black and James and Messrs. Castro, Chang,
Copeland, Haje, Nicholas, Shirley and Sununu as Independent
Directors as independence is defined in the NYSE Listed Company
Manual and as defined by
Rule 10A-3
of the Securities Exchange Act of 1934 (the Exchange
Act). Additionally, each of these directors meets the
categorical standards for independence established by the Board,
as set forth in the Companys Corporate Governance Policy
and discussed elsewhere in this Proxy Statement.
Messrs. Logan and Pace are former executive officers of
Time Warner, which was the Companys parent company prior
to the Separation. The Company believes that if it were not for
this past employment, the Board could determine that each of
Messrs. Logan and Pace is independent under these criteria.
The Board has determined that the employment during part of 2008
of Mr. Nicholas stepson by Time Inc., a subsidiary of
Time Warner, does not affect Mr. Nicholas
independence. In addition, the Board has determined that each
director nominee is financially literate and possesses the high
level of skill, experience, reputation and commitment that is
mandated by the Board.
Nominees
for Election at the Annual Meeting
The Board has set the number of directors at twelve. Each of the
current directors has been nominated for election at the Annual
Meeting. In connection with the Separation, Jeffrey L. Bewkes
resigned from the Board, and Donna A. James, Edward D. Shirley
and John E. Sununu were appointed by the Board to the Board of
Directors effective, in each case, on March 12, 2009.
10
Set forth below are the principal occupation and certain other
information, as of February 28, 2009, for the twelve
nominees, each of whom currently serves as a director.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Principal Occupation During the Past Five Years
|
|
Carole Black
|
|
|
65
|
|
|
Former President and Chief Executive Officer, Lifetime
Entertainment Services. Ms. Black served as the
President and Chief Executive Officer of Lifetime Entertainment
Services, a multi-media brand for women, including Lifetime
Network, Lifetime Movie Network, Lifetime Real Women Network,
Lifetime Online and Lifetime Home Entertainment, from March 1999
to March 2005. Prior to that, Ms. Black served as the President
and General Manager of NBC4, Los Angeles, a commercial
television station, from 1994 to 1999, and in various
marketing-related positions at The Walt Disney Company, a media
and entertainment company, from 1986 to 1993. Ms. Black has
served as a director since July 2006.
|
Glenn A. Britt
|
|
|
59
|
|
|
Chairman, President and Chief Executive Officer of the
Company. Mr. Britt has served as the
Companys President and Chief Executive Officer since
February 15, 2006, adding the position of Chairman upon the
Separation. Prior to February 2006, he served as the
Companys Chairman and Chief Executive Officer from March
2003. Prior to that, Mr. Britt was the Chairman and Chief
Executive Officer of the Time Warner Cable division of Time
Warner Entertainment Company, L.P. (TWE), now the
Companys subsidiary, from August 2001 and its President
from January 1999 to August 2001. Prior to assuming that
position, he held various senior positions with Time Warner
Cable Ventures, a unit of TWE, certain of the Companys
predecessor entities, and Time Warner and its predecessor Time
Inc. Mr. Britt has served as a director since March 2003 and
also serves as a director of Xerox Corporation and as a trustee
of Teachers Insurance and Annuity Association.
|
Thomas H. Castro
|
|
|
54
|
|
|
President and Chief Executive Officer, El Dorado Capital,
LLC. Mr. Castro, the founder of El Dorado
Capital, LLC, an investment firm, has served as its President
and Chief Executive Officer since June 1, 2008. Prior to that,
he was the co-founder and Vice Chairman of Border Media
Partners, LLC, a radio broadcasting company that primarily
targets Hispanic listeners, from July 2007, having served as its
President and Chief Executive Officer from 2002. Prior to that,
Mr. Castro, an entrepreneur, owned and operated other radio
stations and founded a company that exported oil field equipment
to Mexico. Mr. Castro has served as a director since July 2006.
|
11
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Principal Occupation During the Past Five Years
|
|
David C. Chang
|
|
|
67
|
|
|
Chancellor, Polytechnic Institute of New York University.
Dr. Chang has served as Chancellor and Professor of
Electrical and Computer Engineering of Polytechnic Institute of
New York University (formerly known as Polytechnic University)
since July 2005, having served as its President from 1994. Prior
to assuming that position, he was Dean of the College of
Engineering and Applied Sciences at Arizona State University.
Dr. Chang is also a director of AXT, Inc. and has served as
director since March 2003 and served as an independent director
of American Television and Communications Corporation (a
predecessor of the Company) from 1986 to 1992.
|
James E. Copeland, Jr.
|
|
|
64
|
|
|
Former Chief Executive Officer of Deloitte & Touche USA
LLP and Deloitte Touche Tohmatsu and Former Global Scholar,
Robinson School of Business, Georgia State University. Mr.
Copeland served as a Global Scholar at the Robinson School of
Business at Georgia State University from 2003 through 2007.
Prior to that, Mr. Copeland served as the Chief Executive
Officer of Deloitte & Touche USA LLP, a public accounting
firm, and Deloitte Touche Tohmatsu, its global parent, from 1999
to May 2003. Prior to that, Mr. Copeland served in various
positions at Deloitte & Touche, and its predecessors from
1967. Mr. Copeland has served as a director since July 2006 and
is also a director of ConocoPhillips and Equifax, Inc.
|
Peter R. Haje
|
|
|
74
|
|
|
Legal and Business Consultant and Private
Investor. Mr. Haje has served as a legal and
business consultant and private investor since he retired from
service as an executive officer of Time Warner on January 1,
2000. Prior to that, he served as the Executive Vice President
and General Counsel of Time Warner from October 1990, adding the
title of Secretary in May 1993. He also served as the Executive
Vice President and General Counsel of TWE from June 1992 until
1999. Prior to his service to Time Warner, Mr. Haje was a
partner of the law firm of Paul, Weiss, Rifkind, Wharton &
Garrison LLP for more than 20 years. Mr. Haje has served as
a director since July 2006 and is also a director of American
Community Newspapers Inc.
|
Donna A. James
|
|
|
51
|
|
|
Consultant, Business Advisor and Managing Director, Lardon
& Associates LLC. Ms. James has served as a
consultant, business advisor and managing director of Lardon
& Associates LLC, a business advisory services firm, since
April 2006. Prior to that, Ms. James served as President of
Nationwide Strategic Investments, a division of Nationwide
Mutual Insurance Company (Nationwide Mutual), a
financial services and insurance company, from 2003, and as
Executive Vice President and Chief Administrative Officer of
Nationwide Mutual from 2000. Ms. James has served as a director
since March 2009 and is also a director of Limited Brands, Inc.,
Coca-Cola Enterprises Inc. and Conseco, Inc.
|
12
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Principal Occupation During the Past Five Years
|
|
Don Logan
|
|
|
64
|
|
|
Former Chairman of the Board of the Company and Former
Chairman, Time Warners Media & Communications
Group. Mr. Logan served as the Chairman of the
Companys Board of Directors from February 15, 2006 until
March 2009. He served as Chairman of Time Warners Media
& Communications Group from July 2002 until December 31,
2005. Prior to assuming that position, he was Chairman and Chief
Executive Officer of Time Inc., Time Warners publishing
subsidiary, from 1994 to July 2002 and was its President and
Chief Operating Officer from 1992 to 1994. Prior to that, Mr.
Logan held various executive positions with Southern Progress
Corporation, which was acquired by Time Inc. in 1985. Mr. Logan
has served as a director since March 2003.
|
N.J. Nicholas, Jr.
|
|
|
69
|
|
|
Investor. Mr. Nicholas is an investor. From
1964 until 1992, Mr. Nicholas held various positions at Time
Inc. and Time Warner. He was named President of Time Inc. in
1986 and served as Co-Chief Executive Officer of Time Warner
from 1990 to 1992. Mr. Nicholas has served as a director since
March 2003 and is also a director of Boston Scientific
Corporation and Xerox Corporation.
|
Wayne H. Pace
|
|
|
62
|
|
|
Former Executive Vice President and Chief Financial Officer,
Time Warner. Mr. Pace served as Executive Vice
President and Chief Financial Officer of Time Warner from
November 2001 through 2007, and served as Executive Vice
President and Chief Financial Officer of TWE from November 2001
until October 2004. He was Vice Chairman and Chief Financial and
Administrative Officer of Turner Broadcasting System, Inc., a
cable programming subsidiary of Time Warner (TBS),
from March 2001 to November 2001 and held various other
executive positions at TBS, including Chief Financial Officer,
from 1993 to 2001. Prior to that Mr. Pace was an audit partner
with Price Waterhouse, now PricewaterhouseCoopers LLP, an
international accounting firm. Mr. Pace has served as a director
since March 2003.
|
Edward D. Shirley
|
|
|
52
|
|
|
Vice-Chairman, Global Beauty and Grooming, The Procter &
Gamble Company. Mr. Shirley has served as
Vice-Chairman of Global Beauty and Grooming, a business unit of
The Procter & Gamble Company, a consumer goods company,
since July 2008, and as Group President, North America from
April 2006. Prior to that, Mr. Shirley held several senior
executive positions with The Gillette Company, a consumer goods
company, which was acquired by The Procter & Gamble Company
in 2005. Mr. Shirley has served as a director since March 2009.
|
13
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Principal Occupation During the Past Five Years
|
|
John E. Sununu
|
|
|
44
|
|
|
Former U.S. Senator, New Hampshire. Senator
Sununu served as a U.S. Senator from New Hampshire from January
2002 to 2008. He was a member of the Committees on Banking,
Commerce, Finance and Foreign Relations, and he was appointed
the Congessional Representative to the United Nations General
Assembly. Prior to his election to the Senate, he represented
New Hampshires First District in the U.S. House of
Representatives from 1996 to 2002. Prior to serving in
Congress, he served as the Chief Financial Officer of Teletrol
Systems, Inc., a manufacturer of building control systems, from
1993 to 1996. Senator Sununu has served as a director since
March 2009 and is also a director of Boston Scientific
Corporation (as of April 1, 2009).
|
Attendance
During 2008, the Board of Directors met ten times. No incumbent
director attended fewer than 75% of the total number of meetings
of the Board of Directors and the committees of which he or she
was a member. In addition, the directors are encouraged to
attend the Companys annual meetings of stockholders. Eight
of the Companys ten directors nominated for election at
the 2008 annual meeting of the Companys stockholders
attended the meeting.
Committee
Membership
Pursuant to the Companys by-laws, the Board has
established four principal standing committees of the Board. The
Board may eliminate or create additional committees as it deems
appropriate. The Board of Directors and the members of each of
the committees meet regularly in executive session without
management. The current members of the Boards principal
committees are as follows:
Audit Committee. The members of the
Audit Committee are James Copeland, Jr., who serves as the
Chair, David Chang, Donna James and Edward Shirley. Among other
things, the Audit Committee complies with all NYSE and legal
requirements and consists entirely of Independent Directors. The
authority and responsibility of the Audit Committee, which met
ten times during 2008, are described above (see Corporate
GovernanceCommittees of the Board) and set forth in
detail in its Charter, which is posted on the Companys
website at www.timewarnercable.com/investors.
Compensation Committee. The members of
the Compensation Committee are Peter Haje, who serves as the
Chair, Carole Black, Thomas Castro and N.J. Nicholas, Jr.
All of the members of the Compensation Committee are Independent
Directors. The Compensation Committee has a
sub-committee
consisting of three Independent Directors who are also
considered outside directors under
Section 162(m) of the Internal Revenue Code of 1986, as
amended, Ms. Black and Messrs. Castro and Nicholas, to
which it may delegate executive compensation matters. The
authority and responsibility of the Compensation Committee,
which met eight times during 2008, are described above (see
Corporate GovernanceCommittees of the Board)
and set forth in detail in its Charter, which is posted on the
Companys website at
www.timewarnercable.com/investors.
Nominating and Governance
Committee. The members of the Nominating and
Governance Committee are N.J. Nicholas, Jr., who serves as
the Chair, Carole Black, David Chang, Edward Shirley and John
Sununu. All of the members of the Nominating and Governance
Committee are Independent Directors. The authority and
responsibility of the Nominating and Governance Committee, which
met four times during 2008, are
14
described above (see Corporate GovernanceCommittees
of the Board) and set forth in detail in its Charter,
which is posted on the Companys website at
www.timewarnercable.com/investors.
Finance Committee. The members of the
Finance Committee are Wayne Pace, who serves as the Chair,
Thomas Castro, Donna James, Don Logan and John Sununu. The
members of the Finance Committee who are Independent Directors
are Ms. James and Messrs. Castro and Sununu. The
Finance Committee was constituted in December 2008. The
authority and responsibility of the Finance Committee, which did
not meet during 2008, are described above (see Corporate
GovernanceCommittees of the Board) and set forth in
detail in its Charter, which is posted on the Companys
website at www.timewarnercable.com/investors.
Special Committee. During 2008, a
Special Committee of the independent members of the Board of
Directors (the Special Committee) consisting of
Ms. Black and Messrs. Castro, Chang, Copeland (who
served as the Chair), Haje and Nicholas was formed to consider
the Companys Separation from Time Warner and the related
transactions. The Special Committee met twelve times during 2008.
15
SECURITY
OWNERSHIP
Security
Ownership by the Board of Directors and Executive
Officers
The following table sets forth information as of the close of
business on March 31, 2009 as to the number of shares of
the Companys Common Stock beneficially owned by:
|
|
|
|
|
each executive officer named in the Summary Compensation Table
included elsewhere in this Proxy Statement (a named
executive officer);
|
|
|
|
each current director and director nominee; and
|
|
|
|
all current executive officers and directors, as a group.
|
The following table reflects: (i) the shares of Common
Stock that were distributed to the listed individuals or their
associates in connection with the Spin-off Dividend and their
respective ownership of Time Warner Common Stock, (ii) the
Recapitalization, pursuant to which each outstanding share of
Class A common stock and Class B common stock was
converted into one share of Common Stock, (iii) the Reverse
Stock Split pursuant to which every three shares of Common Stock
was combined into one share of Common Stock and
(iv) related adjustments to the Companys outstanding
stock options, restricted stock units and deferred stock units.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Beneficially Owned(1)
|
|
|
|
Number
|
|
|
Right to Acquire
|
|
|
Percent
|
|
Name
|
|
of Shares
|
|
|
Shares(2)
|
|
|
of Class
|
|
|
Carole Black
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Glenn A. Britt(3)
|
|
|
11,670
|
|
|
|
134,742
|
|
|
|
|
*
|
Thomas H. Castro
|
|
|
|
|
|
|
|
|
|
|
|
*
|
David C. Chang
|
|
|
228
|
|
|
|
|
|
|
|
|
*
|
James E. Copeland, Jr.
|
|
|
8,332
|
|
|
|
|
|
|
|
|
*
|
Peter R. Haje(4)
|
|
|
13,914
|
|
|
|
|
|
|
|
|
*
|
Landel C. Hobbs
|
|
|
578
|
|
|
|
61,653
|
|
|
|
|
*
|
Donna A. James
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Michael LaJoie
|
|
|
206
|
|
|
|
19,812
|
|
|
|
|
*
|
Don Logan
|
|
|
6,666
|
|
|
|
|
|
|
|
|
*
|
Robert D. Marcus
|
|
|
1,168
|
|
|
|
35,743
|
|
|
|
|
*
|
N.J. Nicholas, Jr.
|
|
|
2,333
|
|
|
|
|
|
|
|
|
*
|
Wayne H. Pace
|
|
|
19,694
|
|
|
|
|
|
|
|
|
*
|
Carl U.J. Rossetti
|
|
|
183
|
|
|
|
17,444
|
|
|
|
|
*
|
Edward D. Shirley
|
|
|
333
|
|
|
|
|
|
|
|
|
*
|
John E. Sununu
|
|
|
|
|
|
|
|
|
|
|
|
*
|
All current directors and executive officers as a group
(20 persons)(3)-(5)
|
|
|
66,519
|
|
|
|
311,060
|
|
|
|
|
*
|
|
|
|
*
|
|
Represents beneficial ownership of
less than one percent of the issued and outstanding Common Stock
on March 31, 2009.
|
|
(1)
|
|
Beneficial ownership as reported in
the above table has been determined in accordance with
Rule 13d-3
of the Exchange Act. Unless otherwise indicated, beneficial
ownership represents both sole voting and sole investment power.
This table does not include any shares of Common Stock or other
TWC equity securities that may be held by pension and
profit-sharing plans of other corporations or endowment funds of
educational and charitable institutions for which various
directors and officers serve as directors or trustees. As of
March 31, 2009, the only equity securities of TWC
beneficially owned by the named persons or group were shares of
Common Stock, options to purchase shares of Common Stock and
restricted stock units (RSUs) and deferred stock
units reflecting the contingent right to receive shares of
Common Stock. The beneficial ownership of Common Stock for each
of Ms. Black and Messrs. Castro, Chang, Copeland,
Haje, Logan and Nicholas does not include in each case
9,815 shares, and for Mr. Pace, 7,906 shares, of
Common Stock issuable six months after termination of service as
a member of the Board pursuant to the terms of the RSUs issued
to them as compensation and 2,106, 6,126, 2,616, 5,424 and
2,845 shares of Common Stock issuable to
Messrs. Chang, Copeland, Haje, Nicholas and Pace,
respectively, on the distribution date selected by the director
under the Directors Deferred Compensation Program. See
CompensationDirector Compensation.
|
16
|
|
|
(2)
|
|
Reflects shares of Common Stock
subject to options to purchase Common Stock, which were
exercisable or, on March 31, 2009, were unexercised, but
were exercisable on or within 60 days after that date.
These shares are excluded from the column headed Number of
Shares.
|
|
(3)
|
|
Includes 29 shares of Common
Stock owned by Mr. Britts spouse as to which
Mr. Britt disclaims beneficial ownership.
|
|
(4)
|
|
Includes 958 shares of Common
Stock owned by the Peter and Helen Haje Foundation, as to which
Mr. Haje and his spouse share voting power but have no
investment power.
|
|
(5)
|
|
Includes (a) approximately
845 shares of Common Stock held in a trust under the TWC
Savings Plan for the benefit of one of the Companys
current executive officers and (b) 29 shares held by
Mr. Britts spouse.
|
Security
Ownership of Certain Beneficial Owners
In a Schedule 13D filed with the SEC on March 13,
2009, Time Warner reported that as a result of the Separation,
as of 8:00 p.m., eastern time, on March 12, 2009, Time
Warner no longer beneficially owned any shares of Common Stock.
As a result, based on a review of filings with the SEC, as of
March 31, 2009, there were no persons or groups of persons
known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock. It is possible, however,
that a holder of both Common Stock and Time Warner Common Stock
received sufficient additional shares of Common Stock in the
Spin-Off Dividend to beneficially own more than 5% of the
outstanding shares of Common Stock as a result.
AUDIT-RELATED
MATTERS
Report of
the Audit Committee
In accordance with its charter, the Audit Committee of the
Companys Board of Directors (the Audit
Committee) assists the Board of Directors in fulfilling
responsibilities in a number of areas. These responsibilities
include, among others: (i) the appointment and oversight of
the Companys independent auditor, as well as the
evaluation of the independent auditors qualifications,
performance and independence; (ii) oversight of the
Companys internal audit function, (iii) the review of
the Companys financial statements and the results of each
external audit; (iv) the review of other matters with
respect to the Companys accounting, auditing and financial
reporting practices and procedures as the Audit Committee may
find appropriate or may be brought to its attention; and
(v) the oversight of the Companys compliance program.
To assist it in fulfilling its oversight and other duties, the
Audit Committee regularly meets separately with the internal
auditor, the independent auditor and management.
Independent Auditor and Internal Audit
Matters. The Audit Committee has discussed
with the Companys independent auditor its plan for the
audit of the Companys annual consolidated financial
statements and the independent auditors evaluation of the
effectiveness of the Companys internal control over
financial reporting, as well as reviews of the Companys
quarterly financial statements. During 2008, the Audit Committee
met regularly with the independent auditor, with and without
management present, to discuss the results of its audits and
quarterly reviews of the Companys financial statements, as
well as its evaluations of the Companys internal controls
and the overall quality of the Companys accounting
principles. The Audit Committee has also appointed, subject to
stockholder ratification, Ernst & Young LLP
(E&Y) as the Companys independent auditor
for 2009, and the Board concurred in its appointment.
The Audit Committee has reviewed and approved the annual
internal audit plan and has met regularly with the
representatives of the internal audit group, with and without
management present, to review and discuss the internal audit
reports, including reports relating to operational, financial
and compliance matters.
Financial Statements as of December 31,
2008. Management has the primary
responsibility for the financial statements and the reporting
process, including its systems of internal and disclosure
controls (including internal control over financial reporting).
The independent auditor is responsible for performing an
independent audit of the Companys consolidated financial
statements and expressing opinions on the conformity of the
consolidated financial statements with U.S. generally
accepted accounting principles and on the Companys
internal control over financial reporting.
17
In this context, the Audit Committee has met and held
discussions with management and the independent auditor with
respect to the Companys audited financial statements for
the fiscal year ended December 31, 2008. Management
represented to the Audit Committee that the Companys
consolidated financial statements were prepared in accordance
with U.S. generally accepted accounting principles.
In connection with its review of the Companys year-end
financial statements, the Audit Committee has reviewed and
discussed with management and the independent auditor the
consolidated financial statements and the independent
auditors evaluation of the Companys internal control
over financial reporting. The Audit Committee also discussed
with the independent auditor the matters required to be
discussed by the Statement on Auditing Standards No. 61
(Communications with Audit Committees), as amended, as adopted
by the Public Company Accounting Oversight Board (PCAOB) in
Rule 3200T, including the quality and acceptability of the
Companys accounting policies, financial reporting
processes and controls. The Audit Committee also received from
the independent auditor the written disclosures regarding the
auditors independence required by PCAOB Ethics and
Independence Rule 3526, Communication with Audit
Committees Concerning Independence, and the Audit Committee
discussed with E&Y its independence. The Audit Committee
further considered whether the provision by the independent
auditor of any non-audit services described elsewhere in this
Proxy Statement is compatible with maintaining auditor
independence and determined that the provision of those services
does not impair the independent auditors independence.
In performing its functions, the Audit Committee acts only in an
oversight capacity and necessarily relies on the work and
assurances of the Companys management, internal audit and
independent auditor, which, in their reports, express opinions
on the conformity of the Companys annual financial
statements with U.S. generally accepted accounting
principles and the Companys internal control over
financial reporting. In reliance on the reviews and discussions
referred to in this Report and in light of its role and
responsibilities, the Audit Committee recommended to the Board
of Directors, and the Board approved, that the audited financial
statements of the Company be included in the Companys
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008 for filing with
the SEC.
Members
of the Audit Committee
James E. Copeland, Jr. (Chair)
David C. Chang
Donna A. James
Edward D. Shirley
Policy
Regarding Pre-Approval of Services Provided by the Independent
Auditor
The Audit Committee has established a policy (the
Policy) requiring its pre-approval of all audit
services and permissible non-audit services provided by the
independent auditor, along with the associated fees for those
services. The Policy provides for the annual pre-approval of
specific types of services pursuant to policies and procedures
adopted by the Audit Committee, and gives detailed guidance to
management as to the specific services that are eligible for
such annual pre-approval. The Policy requires the specific
pre-approval of all other permitted services. For both types of
pre-approval, the Audit Committee considers whether the
provision of a non-audit service is consistent with the
SECs rules on auditor independence, including whether
provision of the service (i) would create a mutual or
conflicting interest between the independent auditor and the
Company; (ii) would place the independent auditor in the
position of auditing its own work; (iii) would result in
the independent auditor acting in the role of management or as
an employee of the Company; or (iv) would place the
independent auditor in a position of acting as an advocate for
the Company. Additionally, the Audit Committee considers whether
the independent auditor is best positioned and qualified to
provide the most effective and efficient service, based on
factors such as the independent auditors familiarity with
the Companys business, personnel, systems or risk profile
and whether provision of the service by the independent auditor
would enhance the Companys ability to manage or control
risk or improve audit quality or would otherwise be beneficial
to the Company.
18
The Audit Committee has delegated to its Chair the authority to
address certain requests for pre-approval of services between
meetings of the Audit Committee, and the Chair must report his
pre-approval decisions to the Audit Committee at its next
regular meeting. The Policy is designed to ensure that there is
no delegation by the Audit Committee of authority or
responsibility for pre-approval decisions to management of the
Company. The Audit Committee monitors compliance by management
with the Policy by requiring management, pursuant to the Policy,
to report to the Audit Committee on a regular basis regarding
the pre-approved services rendered by the independent auditor.
Management has also implemented internal procedures to ensure
compliance with the Policy.
Services
Provided by the Independent Auditor
The Audit Committee is responsible for the appointment,
compensation, retention and oversight of the work of the
independent auditor. Accordingly, the Audit Committee has
appointed E&Y to perform audit and other permissible
non-audit services for the Company and its subsidiaries. The
Company has formal procedures in place for the pre-approval by
the Audit Committee (or its Chair) of all services provided by
E&Y. These pre-approval procedures are described above
under Policy Regarding Pre-Approval of Services Provided
by the Independent Auditor.
The aggregate fees billed by E&Y to the Company for the
years ended December 31, 2008 and 2007 are as follows:
Fees of
the Independent Auditor
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Audit Fees(1)
|
|
$
|
4,440,369
|
|
|
$
|
4,598,485
|
|
Audit-Related Fees(2)
|
|
|
474,025
|
|
|
|
572,350
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees for Services Provided
|
|
$
|
4,914,394
|
|
|
$
|
5,170,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Audit Fees
were for audit services,
including (a) the annual audit (including required
quarterly reviews) and other procedures required to be performed
by the independent auditors to be able to form an opinion on the
Companys consolidated financial statements; (b) the
audit of the effectiveness of internal control over financial
reporting; (c) consultation with management as to the
accounting or disclosure treatment of transactions or events
and/or the actual or potential impact of final or proposed
rules, standards or interpretations by the SEC, the Financial
Accounting Standards Board (FASB) or other
regulatory or standard-setting bodies; and (d) services
that only the independent auditors reasonably can provide, such
as services associated with SEC registration statements,
periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings and
assistance in responding to SEC comment letters.
|
|
(2)
|
|
Audit-Related Fees
were principally for
services related to
(a) agreed-upon
procedures or expanded audit procedures to comply with
contractual arrangements or regulatory/franchise reporting
requirements; (b) audits of employee benefit plans; and
(c) due diligence services pertaining to acquisitions and
dispositions.
|
None of the services related to Audit-Related Fees presented
above was approved by the Audit Committee pursuant to the waiver
of pre-approval provisions set forth in the applicable rules of
the SEC.
19
COMPENSATION
Executive
Compensation
Compensation
Discussion and Analysis
Introduction
The Companys executive compensation program is designed to
attract, retain, motivate and reward leaders who create
long-term value for the Companys stockholders. Generally,
the Companys compensation program is intended to reward
sustained financial and operating performance and leadership
excellence, align executives long-term interests with
those of the Companys stockholders and motivate executive
retention. This Compensation Discussion and Analysis describes
the Companys compensation philosophy, strategy, policies,
components and practices for the named executive officers and
how they were applied to determine 2008 compensation for the
named executive officers, including the following:
|
|
|
|
|
Governance, including the roles of the Compensation Committee of
the Board of Directors (the Compensation Committee),
the compensation consultants and management;
|
|
|
|
The Companys compensation philosophy and key principles;
|
|
|
|
The Companys compensation program design; and
|
|
|
|
The Companys 2008 compensation determinations, including
those related to base salaries, short-term incentive awards and
long-term incentive awards, and how they reflect the
Companys compensation philosophy and performance.
|
Oversight
and Authority for Executive Compensation
Under its charter, the Compensation Committee has authority and
oversight over all elements of the Companys executive
compensation program, including:
|
|
|
|
|
salaries;
|
|
|
|
short-term incentives;
|
|
|
|
long-term incentives, including equity-based awards;
|
|
|
|
employment agreements for the named executive officers,
including any change of control or severance provisions or
personal benefits set forth in those agreements;
|
|
|
|
any change of control or severance arrangements for the named
executive officers that are not part of their employment
agreements; and
|
|
|
|
employee benefits and perquisites.
|
The Compensation Committees charter states that in
determining compensation for each named executive officer, the
Compensation Committee should consider, among other factors, the
Companys overall performance, stockholder return, the
achievement of specific performance objectives established by
the Compensation Committee on an annual basis, compensation
previously provided to the executive, and the competitiveness of
the named executive officers compensation as compared with
the compensation of executives in similar positions at peer
companies.
Role of
Compensation Consultants and Management
Since early 2007, the Compensation Committee has retained
Executive Compensation Advisors, a Korn/Ferry company
(ECA), as its independent compensation consultant.
The Company pays ECA an annual retainer, plus additional amounts
for special projects, and the firm reports directly to the
Compensation Committee. ECA provides assistance and advice to
the Compensation Committee in carrying out its responsibilities
with respect to executive compensation policies and programs.
The Compensation Committee consults with ECA with respect to all
significant compensation decisions and determinations. In this
advisory
20
role, ECA attends and participates in all Compensation Committee
meetings, including executive sessions when appropriate. In
connection with ECAs role as advisor to the Compensation
Committee, Management (as defined below) may from time to time
seek input from ECA about compensation proposals it is
considering for presentation to the Compensation Committee.
Annually, the Compensation Committee reviews the performance and
independence of ECA.
Members of management, including Glenn Britt, President and
Chief Executive Officer (and Chairman, as of March 12,
2009), Robert Marcus, Senior Executive Vice President and Chief
Financial Officer, and Tomas Mathews, Executive Vice President,
Human Resources (collectively, Management), provide
recommendations for the Compensation Committees
consideration, and provide ongoing assistance to the
Compensation Committee with respect to its review of the
effectiveness of the Companys executive compensation
programs, including competitiveness and alignment with the
Companys objectives. The Company also, from time to time,
engages consulting firms (independent of those engaged by the
Compensation Committee) to assist Management in evaluating the
Companys executive compensation policies and practices.
Compensation
Philosophy and Key Principles
The Compensation Committee evaluates all elements of the
Companys executive compensation program in light of its
compensation philosophy. This philosophy is to provide a
competitive mix of base salary and short-term and long-term
incentive compensation to attract, retain, motivate and reward
the Companys executives for achievement of Company and
individual performance goals. The Companys compensation
philosophy is guided by the following key principles:
|
|
|
|
|
Pay for performanceTotal compensation delivered to
executives should reflect an appropriate level of variable,
performance-based compensation tied to the achievement of both
Company financial performance goals and established individual
performance goals.
|
|
|
|
Short-term and long-term elementsTotal compensation
should be delivered in a form that focuses the executive on both
the short-term and long-term objectives of the Company.
|
|
|
|
Alignment with stockholder interestsTotal
compensation delivered to executives should be tied to a
significant degree to the Companys stock performance to
align executives interests with those of the
Companys stockholders.
|
|
|
|
Competitive payTotal compensation delivered to
executives should reflect the competitive marketplace for talent
inside and outside the Companys industry, which must be
considered in light of the risk of losing (and the difficulty of
replacing) the relevant executive.
|
Compensation
Program Design
The Companys compensation program utilizes three principal
elementsbase salary, short-term incentives and long-term
incentives. As discussed below, each is intended to focus the
Companys executives on a different corporate priority.
Annual Base Salary: The base salary paid to
the Companys named executive officers and other employees
is intended to focus the recipient on his or her day-to-day
duties. The level of base salary paid to a named executive
officer generally reflects the executives qualifications,
level of experience and tenure with the Company, as well as the
importance of attracting and retaining the executive.
Short-Term Incentive: The Companys
short-term cash incentive program is designed to motivate the
Companys named executive officers and other participants
to help meet and exceed annual financial and non-financial goals
established annually by the Compensation Committee by giving
them an opportunity to share in the Companys success. The
program also rewards participants for achieving specified
individual short-term goals. Short term incentives for the named
executive officers are determined using the same general
criteria as are used for about 4,400 other bonus-eligible
employees. Each participant is eligible to receive a target
annual bonus calculated as a percentage of base salary and, for
the named executive officers, within the limits of the Bonus
Plan (as defined and discussed in more detail below). The
percentage is generally determined based on
21
the participants level of responsibility within the
Company. With increasing levels of responsibility, a higher
percentage of the participants total cash compensation
comes from the performance-based annual cash bonus. In
establishing each years short-term incentive program, the
Compensation Committee balances the benefits of the program
against the risk that it will cause participants to take actions
that, while consistent with the achievement of specified
short-term goals, might involve unnecessary or excessive risk to
the Company. For additional information regarding the structure
of the 2008 short-term incentive program, see 2008
Short-Term Incentive Program and Awards.
Long-Term Incentive: The Companys
long-term incentive (LTI) program is designed to
retain key employees, including the named executive officers,
motivate them to meet and exceed the Companys long-term
goals and align their interests with those of stockholders
through stock ownership. The LTI program acts as a balance to
the short-term incentive program. Prior to 2007, the
Companys senior executives received equity grants from
Time Warner based on Time Warner Common Stock as part of their
long-term incentives together with a long-term 2006 Cash LTIP
discussed below. Since 2007, the LTI program has consisted of
restricted stock units (RSUs) and stock options
based upon on the Companys stock. In establishing each
years LTI program, the Compensation Committee considers
whether the program promotes appropriate executive conduct in
light of the related risk of encouraging participants to take
actions that might involve unnecessary or excessive risk to the
Company. For additional information regarding the structure of
the 2008 LTI program, see 2008 Long-Term Incentive Program
and Awards.
The Companys short-term and long-term incentives support
its pay for performance compensation philosophy (as
discussed above). Generally, those executives with a high level
of strategic impact on the Companys success receive a
greater proportion of their compensation in the form of
variable (i.e., performance-based
and/or
equity-based) short-term and long-term incentives. For example,
approximately 92% of Mr. Britts 2008 target
compensation was variable with approximately 8% targeted as base
salary. The other named executive officers target
compensation was approximately
70-80%
variable. The Company believes that placing greater emphasis on
appropriate levels of variable compensation focuses the named
executive officers on achieving the Companys strategic and
performance objectives.
For 2008, the Company targeted slightly more compensation to the
named executive officers through long-term (as compared with
short-term) incentives. The Company believes that this mix of
compensation supports its compensation philosophy (as discussed
above) that total compensation should be delivered in a form
that focuses the executive on both the short-term and long-term
strategic objectives of the Company by encouraging the named
executive officers to focus at least as much on achieving
long-term strategic objectives as on achieving shorter-term
business objectives, as well as assisting in the retention of
such executives.
The
Companys 2008 Compensation Determinations
The Compensation Committee reviews each named executive
officers target compensation annually, as well as when the
executives employment agreement nears the end of its term
and when the executive is promoted or his responsibilities
change. Management conducts an initial review and makes
recommendations to the Compensation Committee. A starting point
for the review is the compensation provided to the executive
during the prior year. Generally, this is embodied in an
employment agreement between the Company and the named executive
officer that provides for a minimum annual salary, a target
annual bonus stated as a percentage of annual salary and, in
some cases, a target value for long-term incentive awards to be
granted each year. See Employment Agreements.
In connection with the review, each named executive
officers performance, the importance of the executive
officers position within the Company, the risk of losing
(and the difficulty of replacing) the executive officer, the
importance of retaining the executive officer in his role and
his tenure in the role is considered.
Competitive
Comparisons
In addition, the 2008 compensation recommendations for the named
executive officers were compared with the compensation for
executive officers with similar roles and responsibilities at
other companies based upon data published by 16 cable,
communications and media companies (identified below) in proxy
statements
22
or other public filings (the 2008 Peer Group) to
validate Managements recommendations. As a general
reference only, the Compensation Committee also considered the
named executive officers 2008 compensation levels in light
of market survey data available through a number of nationally
recognized compensation consulting firms based on information
relating to companies roughly comparable in size to the Company
(median annual revenues of $15 billion) in cable,
telecommunications, media and other industries. Where available,
the Company further supplemented its compensation review with
compensation data for comparable positions within Time Warner,
its parent company at that time.
The Compensation Committee believes that the companies in the
2008 Peer Group reflect the Companys competitors for
talent. The companies in this group were: Alltel Corporation,
AT&T Inc., Cablevision Systems Corporation,
CBS Corporation, Charter Communications Inc., Clear Channel
Communications, Inc., Comcast Corporation, DirecTV Group, Inc.,
DISH Network Corporation, Liberty Media Corporation., News
Corporation, QWEST Communications International, Inc., Sprint
Nextel Corporation, The Walt Disney Company, Verizon
Communications, Inc. and Viacom Inc.
Managements recommended target compensation for each named
executive officer during 2008 consisted of base salary and
short-term and long-term incentives, which, consistent with the
compensation philosophy, generally were intended to deliver
total target compensation between the median and the
75th percentile of the 2008 Peer Group for such executive
that were also consistent with those levels in the market survey
data. The Company believes that targeting executive compensation
at or above the median helps attract and retain highly qualified
senior leaders, which the Company believes is necessary to its
success in a competitive environment. The 2008 target
compensation approved by the Compensation Committee for each
named executive officer was generally consistent with this
target range. Actual total cash compensation paid was dependent
on the achievement of certain financial performance goals and an
evaluation of the executives individual performance, as
discussed in detail below, while the ultimate value of long-term
equity awards will depend on future stock performance.
The Company believes that the total target and actual
compensation for 2008, including base salary, short-term and
long-term incentives, and the mix of compensation elements,
appropriately reflects individual and Company performance,
stockholder alignment, the importance of each individuals
position within the Company, the importance of retaining the
executive in his role, his tenure in the role and competitive
market levels. The Company believes that the 2008 compensation
program, each named executive officers target and actual
compensation and the mix of compensation elements was also
broadly consistent with the compensation practices and pay
levels of companies within the 2008 Peer Group.
2008 Base
Salary and Target Incentives
The basis for the determination of each named executive
officers 2008 base salary and target short-term cash and
long-term incentive compensation is described below.
Mr. Britt. The Compensation Committee
reviewed Mr. Britts 2008 compensation in December
2007. Under Mr. Britts employment agreement, he is
entitled to a minimum annual salary of $1 million, which
has been his base salary since 2001. As noted above, the Company
believes that compensation for its more senior executives should
be weighted more heavily toward variable, performance-based
and/or
equity-based compensation that focuses the executive on
achieving the Companys strategic and business objectives.
As a result, Management did not recommend any increase in
Mr. Britts base salary for 2008, and the Compensation
Committee agreed with this recommendation. Mr. Britts
target annual bonus and long-term incentive had been adjusted in
August 2006 in connection with the renewal of his employment
agreement to 500% of his base salary ($5 million) and 600%
of his base salary ($6 million), respectively, to reflect
his increased responsibilities in light of the cable systems
acquired in the July 2006 transactions with Adelphia
Communications Corporation and Comcast Corporation, the
Companys emergence as a public company, as well as his
performance, the importance of his position as President and
Chief Executive Officer within the Company, and the importance
of retaining him in that role during what could be expected to
be a challenging period for the Company. Management recommended
that no adjustment be made to Mr. Britts target
annual bonus or long-
23
term incentive for 2008 and the Compensation Committee, after
deliberation and discussion with Management (excluding
Mr. Britt), agreed with this recommendation.
Mr. Marcus. The Compensation Committee
reviewed Mr. Marcuss 2008 compensation in December
2007 in anticipation of his taking on the added role of Chief
Financial Officer (in addition to his position as the
Companys Senior Executive Vice President) effective
January 1, 2008. Based upon the increase in the scope of
each of his responsibilities, his performance, the importance of
his position as Chief Financial Officer and Senior Executive
Vice President, a review of the 2008 Peer Group for comparable
positions and survey market data and the importance of retaining
him in these roles in light of the highly competitive
environment in which the Company operates, Management (excluding
Mr. Marcus) recommended that his base salary and target
annual bonus and long-term incentives be adjusted, effective
January 1, 2008, to provide for a minimum base salary of
$800,000 per year (from $700,000), a target annual bonus of 175%
of base salary (from 150% of base salary), and a long-term
incentive target of 225% of base salary (from 193% of base
salary). The Compensation Committee, after deliberation and
discussion with Management (excluding Mr. Marcus), agreed
with these recommendations.
Mr. Hobbs. The Compensation Committee
approved a new employment agreement with Mr. Hobbs
effective February 1, 2008 that extended the term of
Mr. Hobbss employment as the Companys Chief
Operating Officer through January 31, 2011. Based upon his
performance, the importance of his position as Chief Operating
Officer within the Company, a review of the 2008 Peer Group for
comparable positions and survey market data and the importance
of retaining Mr. Hobbs in that role in light of the highly
competitive environment in which the Company operates,
Management recommended that his base salary and target annual
bonus and long-term incentive be adjusted, effective
February 1, 2008, to provide for a minimum base salary of
$900,000 per year (from $850,000), a target annual bonus of 233%
of his base salary (from 200%) and a long-term incentive target
of 333% of his base salary (from 288%). The Compensation
Committee, after deliberation and discussion with Management,
agreed with these recommendations.
Mr. LaJoie. The Compensation Committee
reviewed Mr. LaJoies 2008 compensation in December
2007. Based upon his performance, the importance of his position
as Chief Technology Officer, and the importance of retaining him
in that role in light of the Companys dependence on
technology, Management recommended that, effective
January 1, 2008, his base salary be increased to $525,000
per year (from $480,000), and that his target annual bonus be
maintained at 100% of his base salary and his target long-term
incentive be maintained at 175% of his base salary. The
Compensation Committee, after deliberation and discussion with
Management, agreed with these recommendations.
Mr. Rossetti. The Compensation Committee
reviewed Mr. Rossettis 2008 compensation in December
2007. Based upon a continued focus on new business opportunities
(such as wireless and commercial services), for which
Mr. Rossetti is responsible, his performance and the
importance of retaining him in his role while the Company
explored new business opportunities, Management recommended that
his base salary and long-term incentive target be adjusted,
effective January 1, 2008, to provide for a base salary of
$500,000 per year (from $480,000) and a long-term incentive
target of 160% of base salary (from 156% of base salary).
Management further recommended that Mr. Rossettis
target annual bonus be maintained at 100% of his base salary.
The Compensation Committee, after deliberation and discussion
with Management, agreed with these recommendations.
In connection with the 2008 compensation review, Management
determined that each of the named executive officers base
salary, target annual bonus and long-term incentives were
generally consistent with those of similarly situated executives
within the 2008 Peer Group.
2008
Short-Term Incentive Program and Awards
The determinations of the Companys annual cash bonus
payments to its executive officers are made under two
plansthe Time Warner Cable Inc. 2007 Annual Bonus Plan
(the Bonus Plan), which is intended to comply with
Section 162(m) of the Internal Revenue Code of 1986, as
amended (Section 162(m)), and the 2008 Time
Warner Cable Incentive Plan (the TWCIP), which is
used to guide the Compensation
24
Committee in its exercise of negative discretion in making
awards under the Bonus Plan, as discussed in more detail below.
Annual
Bonus Plan
The Bonus Plan for the named executive officers was approved by
the Companys stockholders in May 2007. Pursuant to the
Bonus Plan, a subcommittee of the Compensation Committee, whose
members were outside directors as defined in
Section 162(m) (the Subcommittee), established
objective performance criteria that determined the maximum bonus
pool from which the named executive officers bonuses could
be paid and a maximum allocation for each named executive
officer. For 2008, the pool was approximately $48 million,
equal to 7.5% of the amount by which the Companys
Operating Income (Loss) before depreciation of tangible assets
and amortization of intangible assets for the year ended
December 31, 2008 (excluding the impact of noncash
impairments of goodwill, franchise rights and other intangible
and fixed assets) (2008 OIBDA) exceeded
$5.6 billion. Under the performance criteria established
for 2008, this pool was allocated to allow maximum awards of
$21,600,000 (45%) for Mr. Britt, $7,200,000 (15%) for
Mr. Hobbs, $4,800,000 (10%) for Mr. Marcus, and
$2,400,000 (5%) for each of the other named executive officers.
The remaining portion of the pool was allocated among the
remaining executive officers.
As discussed below, in awarding 2008 bonuses to each named
executive officer, the Subcommittee exercised its discretion to
reduce the maximum amount available for each executive officer
under the Bonus Plans pool. The basis for this exercise of
discretion was the criteria established under the 2008 TWCIP.
2008
TWCIP
In early 2008, Management recommended that the Compensation
Committee establish Company-wide financial and individual goals
that would be used to determine payments under the 2008 TWCIP
and to guide its determinations with respect to bonuses for
executive officers under the Bonus Plan. Management proposed
that the TWCIP performance goals for the named executive
officers be weighted 70% on Company-wide financial goals and 30%
on individual goals. These weightings are the same as those used
in the Companys short-term annual cash incentive plans
over the past several years. In light of discussions with
Management and ECA, the Compensation Committee approved the
TWCIP structure recommended by Management. In connection with
its review, Management determined that the 2008 TWCIP structure
was broadly consistent with the annual bonus programs of the
2008 Peer Group. A discussion and analysis of the 2008 TWCIP
(i) financial criteria, (ii) individual goals and
(iii) structure follows:
2008 TWCIP Financial Criteria. As
adopted by the Compensation Committee, the 2008 TWCIP financial
performance goals were further weighted 60% based on 2008 OIBDA
and 40% based on 2008 Cable Operations Cash Flow (defined as
2008 OIBDA less capital expenditures plus or minus changes in
working capital) (COCF). Management and the
Compensation Committee believed that for 2008, OIBDA and COCF
would be important indicators of the operational strength and
performance of the business, including the ability to provide
cash flows to service debt and fund capital expenditures.
2008 TWCIP Individual Goals. Individual
goals were established by the Compensation Committee for
Mr. Britt and for each of the other named executive
officers. Mr. Britts 2008 individual goals reflected
the Companys strategic objectives and included
optimization of the Companys strategic positioning in
relation to its competitors, identification and implementation
of organizational changes to drive efficiencies, furtherance of
the Companys investor relations efforts, achievement of
certain operational goals and support of the Companys
diversity efforts.
The individual goals for each of the named executive officers
were intended to support the Companys strategic objectives
and Mr. Britts individual goals, but were tailored to
the executives particular role and areas of
responsibility. Mr. Hobbss 2008 individual goals
included driving organizational changes within the Company,
refining the Companys marketing, operations and customer
care efforts, the furtherance of certain new business efforts,
and development and implementation of diversity and succession
planning initiatives; Mr. Marcuss goals included a
successful transition to his new role as the Companys
Chief Financial Officer (e.g., effective oversight and
management of the Companys finance, accounting, treasury
and investor
25
relations functions), effective management of the other
departments reporting to him (mergers and acquisitions, human
resources and programming), and continued support of the
Companys diversity and leadership programs;
Mr. Rossettis goals included continued development of
the Companys commercial services efforts, including the
Companys Business Class Phone service, continued
exploration and development of wireless offering opportunities
and investigation and pursuit of other potential business
opportunities; and Mr. LaJoies goals included
ensuring the Companys technical readiness for the 2009
digital television transition, successful technical deployment
of new products and services, effective management of the
Companys advanced engineering and IT functions, and
furtherance of the Companys diversity and succession
planning programs.
As was the case with Mr. Britts individual
non-financial goals, the individual non-financial goals
established for the other named executive officers were
qualitative in nature and did not contain any specific
quantitative targets or thresholds. No specific weighting was
assigned to any individual non-financial goal.
2008 TWCIP Structure. Based on
Managements recommendation, the Compensation Committee
established a performance funding range of between 50% and 150%
of each named executive officers target annual bonus,
based upon the performance of the Company and each executive
officer. Set out below are the 2008 TWCIP structure and the
weightings assigned to the individual and financial performance
criteria:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
|
Maximum
|
|
Performance
|
|
|
|
|
Performance
|
|
|
Performance
|
|
Criteria
|
|
Weighting
|
|
|
(50% funding)
|
|
|
(150% funding)
|
|
|
|
|
|
|
(in billions)
|
|
|
(in billions)
|
|
|
Individual Goals
|
|
|
30
|
%
|
|
|
|
|
|
|
|
|
Financial Goals:
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 OIBDA
|
|
|
42
|
%
|
|
$
|
6.000
|
|
|
$
|
6.500
|
|
COCF
|
|
|
28
|
%
|
|
$
|
2.538
|
|
|
$
|
2.750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Under this structure, each of the performance criteria was
separately assessed. If, for either of the two financial
performance components (OIBDA and COCF), the threshold level of
performance was not attained, no payout would be made with
respect to that component. Alternatively, if the maximum level
of performance was exceeded for either component, no payout in
excess of 150% of target would result with respect of that
component. If, for either of the two financial components,
actual performance was above the threshold but below the
maximum, the payout with respect to that component would be
determined based solely upon the Compensation Committees
discretion, provided the payout with respect to that component
would not be less than 50% or more than 150% of the respective
weighting of the target bonus, and within the limits established
by the Bonus Plan.
In light of its subjective nature, the individual goals
component of the 2008 TWCIP was not assigned a threshold level
of performance. However, under the 2008 TWCIP, a
participants individual performance assessment could not
exceed 150%.
2008 Short-Term Incentive Program Award
Determination. In early 2009, the
Compensation Committee reviewed the Companys 2008 OIBDA
and COCF performance against the threshold and maximum levels of
performance under the TWCIP. Consistent with the terms of the
2008 TWCIP, the Compensation Committee made certain
discretionary adjustments to both OIBDA and COCF. In addition to
excluding from OIBDA certain noncash impairment charges of
approximately $14.859 billion (including an approximately
$14.8 billion impairment of the Companys franchise
rights required by its annual FAS 142 review), these
adjustments to 2008 OIBDA reflected changes in the accounting
classification of converter box retrieval costs and
approximately $304 million to COCF for unanticipated,
voluntary pension plan contributions, as well as adjustments to
both 2008 OIBDA (approximately $30 million) and COCF
(approximately $40 million) for the impact of hurricanes
and unbudgeted restructuring activity. In making adjustments to
each of the performance measures for 2008, the Compensation
Committee was guided by the principle that the 2008 TWCIP was
intended to measure and reward participants for the performance
of the Companys ongoing operations. The Compensation
Committee determined that the Companys OIBDA (adjusted as
described above) of $6.240 billion exceeded the threshold
OIBDA performance level but not the maximum OIBDA performance
level and
26
that the Companys COCF (adjusted as described above) of
$2.864 billion exceeded both the threshold and the maximum
COCF performance level.
Based on the Compensation Committees determination that
the Companys 2008 OIBDA and COCF performance (as adjusted
by the Committee) each exceeded the corresponding threshold
performance target under the 2008 TWCIP, the Compensation
Committee exercised its discretion in establishing the
Companys overall financial performance score
under the 2008 TWCIP. In exercising its discretion, the
Compensation Committee considered the following factors:
(1) how the Companys actual adjusted OIBDA and COCF
compared to the threshold (50%) and maximum (150%) levels for
each metric, (2) Managements recommendation for the
Compensation Committees determination, (3) the
external business environment, market conditions and budgetary
considerations, (4) the Companys performance relative
to the 2008 results of some other cable operators and
(5) the Companys performance relative to its 2007
results. After deliberation, the Compensation Committee
established a 2008 Company performance score of 95%.
In connection with the Compensation Committees assessment
of Mr. Britts and the other named executive
officers individual performances, Mr. Britt completed
a self-assessment of his performance and asked certain of the
Companys other executive officers to assess his
performance. Based in part on these assessments, the
Compensation Committee reached the following favorable
assessment of Mr. Britts performance against his 2008
individual goals:
|
|
|
|
|
Optimization of the Companys Strategic Positioning in
Relation to its CompetitorsBalanced subscriber growth,
short-term profitability and the quality of the Companys
subscriber base; improved customer convenience and quality
(e.g., more High Definition programming and introduction of new
features such as Start Over) and selected the appropriate
technologies to do so;
|
|
|
|
Organizational ChangesIntroduced organizational
changes to enable the Company to more nimbly and efficiently
meet competitive and consumer needs;
|
|
|
|
Investor Relations EffortsContinued to reinforce
the Companys and its managements credibility with
investors;
|
|
|
|
Operational AchievementsCommercial revenues grew
over 20% during 2008 to almost $800 million and Business
Class phone service was deployed in all of the Companys
systems; subscribers, revenue and customer satisfaction improved
during the year in some key operating areas, despite a shift in
the economy; and
|
|
|
|
DiversityImplemented a diversity program covering
hiring, programming, marketing and partnering.
|
In addition, Mr. Britt reviewed with the Compensation
Committee each named executive officers performance with
respect to their individual non-financial goals and recommended
a performance assessment score for each of the other named
executive officers based on his views of how well or poorly each
had performed against each of those goals.
Based on the Compensation Committees determinations with
respect to the Company performance and its assessment of the
named executive officers performance against their
respective individual goals, the Subcommittee exercised its
discretion under the Bonus Plan and TWCIP to award each named
executive officer a 2008 bonus payout equal to 99.5% of his
target bonus. These bonus payments were less than the permitted
maximums under the Bonus Plan.
2008
Long-Term Incentive Program and Awards
The Companys 2008 LTI program was designed to retain and
motivate employees to meet and exceed the Companys
long-term growth goals and acts as a balance to the shorter-term
incentives.
2008 Target Long-Term Incentive
Mix. Late in 2006, the Company adopted the
Time Warner Cable Inc. 2006 Stock Incentive Plan (the TWC
Stock Incentive Plan), which was approved by the
Companys stockholders. For 2007, an LTI program was
established under the TWC Stock Incentive Plan, which consisted
of RSUs and stock options. At the time of the 2007 grants, the
Companys common stock had been trading on
27
the NYSE for only about a month. In light of anticipated
volatility of the market price of the Class A common stock
(which was exacerbated by relatively light trading volumes),
Management and the Compensation Committee determined that
providing a significant percentage of LTI through RSUs that vest
based on continued service over time was important to executive
retention, and the pay for performance and stockholder alignment
components of its compensation philosophy. The 2007 mix of
target LTI value for all TWC Stock Incentive Plan participants
was allocated one-third as stock options and two-thirds as RSUs.
For the 2008 LTI program, the Compensation Committee desired to
add a stronger performance orientation to the LTI mix while
still balancing the need for incentives that would drive
retention and stock ownership among the named executive
officers. Therefore, for 2008, the executive officers mix
of target LTI value was changed to 60% as stock options and 40%
as RSUs. In contrast, for a group of the Companys senior,
non-executive officers, the 2008 LTI target mix was 50% as stock
options and 50% as RSUs, and for the balance of the roughly
1,200 employees who received 2008 LTI grants under the TWC
Stock Incentive Plan, the target mix was one-third as stock
options and two-thirds as RSUs (the same as the 2007 grants).
2008 Equity Awards. As discussed above,
the Company believes that awarding stock options and RSUs helps
retain executives and aligns the interests of executives with
the interests of stockholders.
In February 2008, the Compensation Committee authorized the 2008
equity awards, which were made on March 3, 2008.
Mr. Britt and the other named executive officers, along
with all other eligible employees, were awarded both stock
options and RSUs. The stock options were granted with an
exercise price equal to the closing price of Class A common
stock on the grant date. Generally, the stock options vest in
four equal installments on each of the first four anniversaries
of the date of grant, and the RSUs awarded at the same time vest
in two equal installments on the third and fourth anniversaries
of the date of grant. The Company generally believes that the
multi-year vesting schedule encourages executive retention and
emphasizes a longer-term perspective.
2006-2008 Cash Long-Term Incentive
Plan. In 2006, the Company granted
performance-based long-term cash awards under the
2006-2008
Long-Term Incentive Plan (2006 Cash LTIP). The
Company established the 2006 Cash LTIP to complement awards of
Time Warner stock options and RSUs at a time when the Company
was not granting awards based on its own equity. The cash
component was intended to increase the tie between long-term
compensation and the Companys (as opposed to Time
Warners) performance.
The 2006 Cash LTIP provided a target cash award based on a
three-year performance cycle. The payout range was 50% to 200%
of target based on the Companys cumulative OIBDA over the
2006-2008
performance period (three-year OIBDA). The 2006 Cash
LTIP target awards were established for each eligible executive
based on a competitive award level as compared against
executives in comparable positions at that time, the importance
of the executives position within the organization, the
importance of retaining the executive in his role and the
executives tenure in the role.
In February 2006, the TWC Board of Directors established and
approved the performance targets for the 2006 Cash LTIP. In
December 2006, pursuant to the terms of the 2006 Cash LTIP, the
Compensation Committee approved certain adjustments to the
performance targets to account for the Companys
transactions with Adelphia Communications Corporation and
Comcast Corporation, which closed on July 31, 2006, and the
distribution of assets by Texas and Kansas City Cable Partners,
L.P., which occurred at the end of 2006. The resulting payout
range of 50% to 200% of target was based on the Companys
three-year OIBDA, as follows:
|
|
|
|
|
if the Company failed to achieve three-year OIBDA of
$14.990 billion (the 50% target payout threshold), no
payments would be made under the 2006 Cash LTIP;
|
|
|
|
if the Company achieved three-year OIBDA of
$16.891 billion, the 2006 Cash LTIP payment would be
target, and
|
|
|
|
if the Company achieved or exceeded three-year OIBDA of
$18.170 billion, the 2006 Cash LTIP payment would be 200%
of target.
|
28
In early 2009, the Compensation Committee reviewed the
Companys performance against the three-year OIBDA target
to determine awards under the 2006 Cash LTIP. Consistent with
the terms of the 2006 Cash LTIP, certain adjustments that were
made in analyzing the Companys performance under the 2006,
2007 and 2008 annual cash incentive plans were also made in
analyzing the Companys performance under the 2006 Cash
LTIP.
The Companys actual cumulative
2006-2008
OIBDA performance (as adjusted by the Compensation Committee)
yielded a performance level of 99.95% of target payout. As a
result, each of the named executive officers was awarded 99.95%
of his target award. Because the 2006 Cash LTIP was delivered as
target compensation in 2006 and provided a long-term incentive,
the payout under the plan was not taken into account in
determining other aspects of 2008 compensation for the named
executive officers. Payments under the 2006 Cash LTIP were made
in early 2009 and are reported in note 6 to the Summary
Compensation Table elsewhere in this Proxy Statement.
The Use
of Pay Tallies
The Compensation Committee periodically reviews pay
tallies for the named executive officers (i.e., analyses
of the executives annual pay and long-term compensation
with potential severance payments under various involuntary
termination scenarios) to help ensure that the design of the
compensation program is consistent with the Companys
compensation philosophy and that the amount of compensation is
within appropriate competitive parameters. The Compensation
Committee finds tools like pay tallies helpful in its analysis
of the compensation program, but focuses more on the
benchmarking results of the 2008 Peer Group (see The
Companys 2008 Compensation Program above) in
determining specific compensation levels for the named executive
officers.
Based on the Compensation Committees review of 2008 pay
tallies, the Compensation Committee has concluded that the total
compensation of the named executive officers (and, in the case
of involuntary termination or
change-in-control
scenarios, potential payouts) is appropriate and
reasonable and, therefore, did not make any adjustments based on
this review.
Perquisites
The Company provides some limited perquisites to the named
executive officers. The Company believes these perquisites
facilitate the operation of its business, allow named executive
officers to better focus their time, attention and capabilities
on their Company activities, alleviate safety and security
concerns, and assist the Company in recruiting and retaining key
executives. The Company believes these perquisites are more
limited than those provided to executives at many other large
companies.
The Companys perquisites for its named executive officers
in 2008 include reimbursement for financial services and, in the
case of Mr. Britt, a car allowance as well as a
company-provided car and specially-trained driver in light of
security concerns. Additionally, during 2008, the Company owned
aircraft jointly with Time Warner and other Time Warner
companies, which was used by the Company primarily for business
purposes. Under Company policy, personal use of the aircraft was
permitted by the Companys executive officers when space
was available on otherwise-scheduled business flights, with
income attributed to the relevant executive officer.
Benefits
The Company maintains defined benefit and defined contribution
retirement programs for its employees in which the
Companys named executive officers participate. The
objective of these programs is to help provide financial
security into retirement, reward and motivate tenure and recruit
and retain talent in a competitive market. In addition to the
Companys tax-qualified defined benefit plans, the Company
maintains non-qualified defined benefit plans in which the named
executive officers participate. All tax-qualified defined
benefit plans have a maximum compensation limit and a maximum
annual benefit, which limit the benefit to participants whose
compensation exceeds these limits. In order to provide
retirement benefits commensurate with salary levels, the
non-qualified plans provide benefits to key salaried employees,
including the named
29
executive officers, using the same formula for calculating
benefits as is used under the tax-qualified plans but taking
into account compensation in excess of the compensation
limitations and maximum benefit accruals for tax-qualified
plans. See Pension Plans.
The Company also provides other benefits for its employees in
which the Companys named executive officers participate
including health care coverage, life and disability insurance
protection, reimbursement of educational expenses and access to
favorably priced group insurance coverage. The Company provides
these benefits to help alleviate the financial costs and loss of
income arising from illness, disability or death, to encourage
ongoing education in job related areas and to allow employees to
take advantage of reduced insurance rates available for group
policies.
Deferred
Compensation
Before 2003, the Company maintained a nonqualified deferred
compensation plan that generally permitted employees whose
annual cash compensation exceeded a designated threshold to
defer receipt of all or a portion of their annual bonus until a
specified future date. Since March 2003, additional deferrals
are no longer permitted, but amounts previously credited under
the deferred compensation plan continue to track crediting rate
elections made by the employee from an array of third-party
investment vehicles offered under the TWC Savings Plan. See
Nonqualified Deferred Compensation.
Employment
Agreements
Each of Mr. Britt and the other named executive officers is
employed pursuant to a multi-year employment agreement that
reflect the individual negotiations with the relevant named
executive officer. The Company has long used such agreements to
foster retention, to be competitive and to protect the business
through the use of restrictive covenants, such as
non-competition, non-solicitation and confidentiality
provisions. The Company enters into employment agreements when
it determines that an employment agreement is desirable for the
Company to obtain a measure of assurance as to the
executives continued employment in light of prevailing
market competition for the particular position held by the
executive officer, or where the Compensation Committee
determines that an employment agreement is necessary and
appropriate to attract an executive in light of market
conditions, the prior experience of the executive or practices
at the Company with respect to other similarly situated
employees.
The employment agreement for each named executive officer is
described in detail in this Proxy Statement under
Employment Agreements and
Potential Payments upon Termination or Change in
Control. The Company believes that the features of the
employment agreements appropriately reflect the importance of
each individuals position within the Company and the
importance of retaining the executive in his role.
Tax
Deductibility of Compensation
Section 162(m) generally disallows a tax deduction to
public corporations for compensation in excess of $1,000,000 in
any one year with respect to each of its Chief Executive Officer
and three most highly paid executive officers (other than the
Chief Financial Officer) with the exception of compensation that
qualifies as performance-based compensation. The Compensation
Committee considers Section 162(m) implications in making
compensation recommendations and in designing compensation
programs for the executives. In this regard, the Bonus Plan and
the 2006 Stock Incentive Plan were submitted and approved by
stockholders in May 2007 so that compensation paid under these
plans may qualify as performance-based compensation under
Section 162(m). However, the Compensation Committee retains
the discretion to pay compensation that is not deductible when
it determines that to be in the Companys best interest and
the best interests of the stockholders. For 2008, the Company
believes that the salary and cash bonuses paid to the named
executive officers subject to Section 162(m) will be
deductible, except for an aggregate of approximately
$3.5 million paid under the 2006 Cash LTIP and related to
the vesting of RSUs.
30
Looking
Forward
The Companys Management and the Compensation Committee
have evaluated the structure of the short-term and long-term
incentive programs. The Company believes that the philosophy and
compensation elements in place for 2008 are still generally
appropriate for 2009.
Separation
of Time Warner and the Company
In connection with the payment of the Special Dividend, the
Recapitalization and the Reverse Stock Split, the Company equity
awards held by the named executive officers were adjusted to
retain their value pursuant to the terms of the TWC Stock
Incentive Plan and related award agreements. With respect to the
Special Dividend, RSU holders were permitted to elect to receive
additional RSUs in place of their entitlement to a cash retained
distribution equal to the amount of the Special Dividend.
Under the terms of Time Warners equity plans and related
award agreements, as a result of the Separation, Company
employees who held Time Warner equity awards on March 12,
2009, were treated as if their employment with Time Warner was
terminated without cause on that date. This treatment resulted
in the forfeiture of unvested stock options, shortened exercise
periods for vested stock options and pro rata vesting of the
next installment (and forfeiture of the remainder of) the RSU
awards for Company employees (other than those who satisfied
retirement eligibility provisions of the Time Warner
equity plans and related award agreements). The effect of this
treatment on the awards held by each of the named executive
officers is discussed in more detail under
Potential Payments upon Termination or Change
in Control. The Compensation Committee has approved
make-up awards, or in certain instances, cash
payments, to Company employees that are generally intended to
offset any loss of economic value in Time Warner equity awards
as a result of the Separation. These make-up awards
have not yet been made. Because the adjustments and
make-up
awards are intended to offset possible losses as a result of the
Separation, the Compensation Committee did not consider the
value of these awards in determining 2008 or 2009 compensation
for the named executive officers.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis with Management and, based
on such review and discussions, the Compensation Committee
recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in this Proxy Statement and
the Companys Annual Report on
Form 10-K
(by reference).
Members
of the Compensation Committee
|
|
|
Peter R. Haje (Chair)
|
|
Thomas H. Castro
|
Carole Black
|
|
N.J. Nicholas, Jr.
|
31
Executive
Compensation Summary Table
The following table presents information concerning total
compensation paid to the Companys Chief Executive Officer,
Chief Financial Officer and each of its three other most highly
compensated executive officers who served in such capacities on
December 31, 2008 (collectively, the named executive
officers).
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Awards(4)
|
|
Awards(5)
|
|
Compensation(6)
|
|
Earnings(7)
|
|
Compensation(8)
|
|
Total
|
|
Glenn A. Britt(1)
|
|
|
2008
|
|
|
$
|
1,000,000
|
|
|
|
|
|
|
$
|
2,878,264
|
|
|
$
|
4,157,505
|
|
|
$
|
6,434,270
|
|
|
$
|
120,950
|
|
|
$
|
82,534
|
|
|
$
|
14,673,523
|
|
Chairman, President
|
|
|
2007
|
|
|
$
|
1,000,000
|
|
|
|
|
|
|
$
|
4,623,550
|
|
|
$
|
2,706,757
|
|
|
$
|
7,825,671
|
|
|
$
|
36,370
|
|
|
$
|
89,896
|
|
|
$
|
16,282,244
|
|
and Chief Executive Officer
|
|
|
2006
|
|
|
$
|
1,000,000
|
|
|
|
|
|
|
$
|
1,018,786
|
|
|
$
|
1,645,404
|
|
|
$
|
5,587,500
|
|
|
$
|
150,810
|
|
|
$
|
73,390
|
|
|
$
|
9,475,890
|
|
Robert D. Marcus(2)
|
|
|
2008
|
|
|
$
|
800,000
|
|
|
|
|
|
|
$
|
525,175
|
|
|
$
|
488,717
|
|
|
$
|
1,970,711
|
|
|
$
|
22,160
|
|
|
$
|
30,352
|
|
|
$
|
3,837,115
|
|
Senior Executive
|
|
|
2007
|
|
|
$
|
700,000
|
|
|
|
|
|
|
$
|
321,375
|
|
|
$
|
282,676
|
|
|
$
|
1,249,500
|
|
|
$
|
26,260
|
|
|
$
|
12,986
|
|
|
$
|
2,592,797
|
|
Vice President and Chief Financial Officer
|
|
|
2006
|
|
|
$
|
650,000
|
|
|
|
|
|
|
$
|
124,719
|
|
|
$
|
276,112
|
|
|
$
|
1,218,750
|
|
|
$
|
24,210
|
|
|
$
|
13,360
|
|
|
$
|
2,307,151
|
|
Landel C. Hobbs
|
|
|
2008
|
|
|
$
|
895,192
|
|
|
|
|
|
|
$
|
939,685
|
|
|
$
|
787,673
|
|
|
$
|
3,024,849
|
|
|
$
|
8,160
|
|
|
$
|
48,546
|
|
|
$
|
5,704,105
|
|
Chief Operating
|
|
|
2007
|
|
|
$
|
850,000
|
|
|
|
|
|
|
$
|
550,803
|
|
|
$
|
458,755
|
|
|
$
|
2,802,933
|
|
|
$
|
24,330
|
|
|
$
|
44,845
|
|
|
$
|
4,731,666
|
|
Officer
|
|
|
2006
|
|
|
$
|
762,500
|
|
|
|
|
|
|
$
|
230,364
|
|
|
$
|
460,658
|
|
|
$
|
2,134,376
|
|
|
$
|
35,820
|
|
|
$
|
36,780
|
|
|
$
|
3,660,498
|
|
Michael LaJoie
|
|
|
2008
|
|
|
$
|
525,000
|
|
|
|
|
|
|
$
|
497,255
|
|
|
$
|
480,467
|
|
|
$
|
858,807
|
|
|
$
|
44,150
|
|
|
$
|
14,911
|
|
|
$
|
2,420,590
|
|
Executive Vice
|
|
|
2007
|
|
|
$
|
480,000
|
|
|
|
|
|
|
$
|
220,405
|
|
|
$
|
223,129
|
|
|
$
|
1,033,762
|
|
|
$
|
50,370
|
|
|
$
|
14,297
|
|
|
$
|
2,021,963
|
|
President and Chief Technology Officer
|
|
|
2006
|
|
|
$
|
444,911
|
|
|
|
|
|
|
$
|
51,953
|
|
|
$
|
230,583
|
|
|
$
|
646,620
|
|
|
$
|
60,090
|
|
|
$
|
12,000
|
|
|
$
|
1,446,157
|
|
Carl U.J. Rossetti(3)
|
|
|
2008
|
|
|
$
|
500,000
|
|
|
|
|
|
|
$
|
381,344
|
|
|
$
|
538,939
|
|
|
$
|
796,550
|
|
|
$
|
79,890
|
|
|
$
|
24,819
|
|
|
$
|
2,321,542
|
|
Executive Vice
|
|
|
2007
|
|
|
$
|
480,000
|
|
|
|
|
|
|
$
|
555,565
|
|
|
$
|
296,213
|
|
|
$
|
1,002,464
|
|
|
$
|
85,560
|
|
|
$
|
20,878
|
|
|
$
|
2,440,680
|
|
President and President, Time Warner Cable Ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Mr. Britt served as Chairman
from January 1, 2006 through February 15, 2006, at
which time he added the title of President and ceased serving as
Chairman. Mr. Britt became Chairman of the Board effective
March 12, 2009 and continues to serve as President and
Chief Executive Officer.
|
|
(2)
|
|
Mr. Marcus became Senior
Executive Vice President and Chief Financial Officer on
January 1, 2008, having served as Senior Executive Vice
President prior thereto.
|
|
(3)
|
|
In April 2009, Mr. Rossetti
became Executive Vice President and President, Time Warner Cable
Ventures, having served as Executive Vice President, Corporate
Development prior thereto.
|
|
(4)
|
|
Prior to 2007, the named executive
officers were granted equity awards with respect to Time Warner
Common Stock under Time Warners equity plans. In 2007 and
2008, the named executive officers received equity awards with
respect to Class A common stock under TWCs equity
plans. Accordingly, for 2007 and 2008, amounts set forth in the
Stock Awards column represent the aggregate value of TWC RSU
awards and Time Warner restricted stock and RSU awards,
recognized for financial statement reporting purposes for 2007
and 2008, respectively, as computed in accordance with
FAS 123R, disregarding estimates of forfeitures related to
service-based vesting conditions. For 2006, the amounts set
forth under Stock Awards represent the value of Time Warner
restricted stock and RSU awards only. The amounts with respect
to TWC awards were calculated based on the closing sale price of
Class A common stock on the NYSE on the date of grant and,
with respect to Time Warner awards, on the average of the high
and low sale prices of Time Warner Common Stock on the NYSE on
the date of grant. Because Messrs. Britt and Rossetti are
retirement-eligible, the full fair value of their 2007 and 2008
awards is included in the amounts for 2007 and 2008,
respectively. The awards vest equally on each of the third and
fourth anniversaries of the date of grant, assuming continued
employment. Each of the named executive officers had a right to
receive dividends on their unvested shares of restricted stock
and dividend equivalents on unvested TWC or Time Warner RSUs, if
paid. For additional information about the assumptions used in
these calculations, see Notes 12 and 10 to the
Companys audited consolidated financial statements
included in its Annual Report on
Form 10-K
for the year ended December 31, 2008 (the 2008
Form 10-K)
and 2007, respectively. The amounts set forth in the Stock
Awards column reflect the Companys accounting expense for
these awards and do not represent the actual value that may be
realized by the named executive officers.
|
32
|
|
|
(5)
|
|
Prior to 2007, the named executive
officers were granted equity awards with respect to Time Warner
Common Stock under Time Warners equity plans. In 2007 and
2008, the named executive officers received equity awards with
respect to Class A common stock under TWCs equity
plans. Accordingly, for 2007 and 2008, amounts set forth in the
Option Awards column represent the aggregate value of stock
option awards with respect to Class A common stock and Time
Warner Common Stock, recognized for financial statement
reporting purposes for 2007 and 2008, respectively, as computed
in accordance with FAS 123R, disregarding estimates of
forfeitures related to service-based vesting conditions. For
2006, the amounts represent the value of stock option awards
with respect to Time Warner Common Stock only. For information
about the assumptions used in these calculations (which relate
to TWC awards in 2007 and 2008 as well as Time Warner awards
prior to 2007), see Notes 3 and 12, Notes 3 and 10 and
Note 4 to the Companys audited consolidated financial
statements included in the Companys Annual Reports on
Form 10-K
for the fiscal years ended December 31, 2008, 2007 and
2006, respectively. The discussion in the Companys
financial statements reflects weighted-average assumptions on a
combined basis for retirement eligible employees and
non-retirement eligible employees. The amounts provided in the
table reflect specific assumptions for
(a) Messrs. Britt and Rossetti, who are
retirement-eligible, and (b) the other named executive
officers, who are not retirement eligible. Specifically, the
amounts with respect to awards of TWC stock options in 2008 for
the named executive officers other than Messrs. Britt and
Rossetti were calculated using the Black-Scholes option pricing
model, based on the following assumptions used in developing the
grant valuations for the awards on March 3, 2008: an
expected volatility of 29.98%, calculated using a 75%-25%
weighted average of implied volatilities of TWC traded options
and the historical stock price volatility of a comparable peer
group of publicly-traded companies; an expected term to exercise
of 6.38 years from the date of grant; a risk-free interest
rate of 3.12%; and a dividend yield of 0%. Because the
retirement provisions of these awards apply to
Messrs. Britt and Rossetti, different assumptions were used
in developing their 2008 grant valuations: an expected
volatility of 30.28%; an expected term to exercise of
7.02 years from the date of grant; a risk-free interest
rate of 3.29% and a dividend yield of 0%. In addition, because
Messrs. Britt and Rossetti are retirement-eligible, the
full value of their 2008 awards that was recognized for
financial statement purposes is included in the amounts for 2008
set forth under Option Awards. The actual value, if any, that
may be realized by an executive officer from any stock option
will depend on the extent to which the market value of the
Companys Class A common stock and Time Warner Common
Stock, as applicable, exceeds the exercise price of the option
on the date the option is exercised. Consequently, there is no
assurance that the value realized by an executive officer will
be at or near the value estimated above. These amounts should
not be used to predict stock performance. None of the stock
options reflected in the table was awarded with tandem stock
appreciation rights.
|
|
(6)
|
|
The amounts set forth in the
Non-Equity Incentive Plan Compensation column for 2008 represent
(a) amounts paid pursuant to the Companys Bonus Plan
using criteria established under the TWCIP to reduce the maximum
amount permitted under the Bonus Plan and (b) payments
under the 2006 Cash LTIP (payable in 2009), a three-year,
performance-based cash award plan equal to $1,459,270 for
Mr. Britt, $577,711 for Mr. Marcus, $968,516 for
Mr. Hobbs, $336,432 for Mr. LaJoie and $299,050 for
Mr. Rossetti. For additional information regarding the
Compensation Committees determinations with respect to
annual bonus payments under the Bonus Plan and TWCIP and the
cash payments under the 2006 Cash LTIP, see
Compensation Discussion and Analysis-2008 Short-Term
Incentive Program and Awards and Long-Term
Incentive Program and Awards.
|
|
(7)
|
|
These amounts represent the
aggregate change in the actuarial present value of each named
executive officers accumulated pension benefits under the
Time Warner Cable Pension Plan, the Time Warner Cable Excess
Benefit Pension Plan, the Time Warner Pension Plan and the Time
Warner Excess Benefit Pension Plan, to the extent the named
executive officer participates in these plans. See the Pension
Benefits Table and Pension Plans for
additional information regarding these benefits. The named
executive officers did not receive any above-market or
preferential earnings on compensation deferred on a basis that
is not tax qualified.
|
|
(8)
|
|
The amounts shown in the All Other
Compensation column for 2008 include the following:
|
(a) Pursuant to the TWC Savings Plan (the Savings
Plan), a defined contribution plan available generally to
TWC employees, for the 2008 plan year, each of the named
executive officers deferred a portion of his annual compensation
and TWC contributed $10,334 as a matching contribution on the
amount deferred by each named executive officer.
(b) The Company maintains a program of life and disability
insurance generally available to all salaried employees on the
same basis. This group term life insurance coverage was reduced
to $50,000 for each of Messrs. Britt, Marcus and Hobbs, who
were each given a cash payment to cover the cost of specified
coverage under a voluntary group program available to employees
generally (GUL insurance). For 2008, this cash
payment was $25,152 for Mr. Britt, $2,592 for
Mr. Marcus and $1,944 for Mr. Hobbs.
Messrs. LaJoie and Rossetti elected not to receive a cash
payment for life insurance over $50,000 and instead receive
group term life insurance available generally as well as
supplemental group term life insurance coverage provided by the
Company and are taxed on the imputed income. For 2008, the
Company paid $12,485 for Mr. Rossettis supplemental
life insurance coverage. For a description of life insurance
coverage for certain executive officers provided pursuant to the
terms of their employment agreements, see Employment
Agreements.
(c) The amounts of personal benefits shown in this column
that aggregate $10,000 or more for 2008 consist of the aggregate
incremental cost to the Company of: for Mr. Britt,
financial services and transportation-related benefits covering
an automobile allowance of $24,000 and $7,868 related to the
incremental cost to the Company of a Company-provided car and
specially trained driver provided for security reasons, based on
the portion of usage that was personal; for Mr. Hobbs,
financial services of $36,268; and for Messrs. Marcus,
LaJoie and Rossetti, financial services. Mr. Britts
transportation-related benefits also include the incremental
cost of his spouse accompanying him on two business trips on
corporate aircraft. There is no incremental cost to TWC for the
use by Mr. Britts spouse of the aircraft under these
circumstances, except for catering and TWCs portion of
employment taxes attributable to the income imputed to
Mr. Britt for tax purposes.
33
Grants of
Plan-Based Awards
The following table presents information with respect to each
award of plan-based compensation to each named executive officer
in 2008, including (a) annual cash awards under the Bonus
Plan and TWCIP and (b) awards of stock options to purchase
Class A common stock and TWC RSUs granted under the Time
Warner Cable Inc. 2006 Stock Incentive Plan (the TWC Stock
Incentive Plan).
The following table does not reflect certain adjustments
(antidilution adjustments) to the TWC stock option
exercise prices and number and kind of shares underlying the TWC
stock options and RSUs. These adjustments were made in March
2009 in connection with the Separation and were intended to
maintain the awards values following the payment of the
Special Dividend, the Reverse Stock Split and the
Recapitalization. See Compensation Discussion and
Analysis-Separation of Time Warner and the Company.
GRANTS OF
PLAN-BASED AWARDS
DURING 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Exercise or
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under
|
|
|
Shares of
|
|
|
Securities
|
|
|
Base Price
|
|
|
of Stock
|
|
|
|
Grant
|
|
|
Approval
|
|
|
Non-Equity Incentive Plan Awards
|
|
|
Stock or
|
|
|
Underlying
|
|
|
of Option
|
|
|
and Option
|
|
Name
|
|
Date
|
|
|
Date(1)
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards(2)
|
|
|
Awards
|
|
|
Glenn A. Britt
|
|
|
|
(3)
|
|
|
|
|
|
$
|
2,500,000
|
|
|
$
|
5,000,000
|
|
|
$
|
6,675,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
(4)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
374,610
|
|
|
$
|
27.51
|
|
|
$
|
4,042,042
|
|
|
|
|
3/3/2008
|
(5)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,964
|
|
|
|
|
|
|
|
|
|
|
$
|
2,860,050
|
|
Robert D. Marcus
|
|
|
|
(3)
|
|
|
|
|
|
$
|
700,000
|
|
|
$
|
1,400,000
|
|
|
$
|
2,100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
(4)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,383
|
|
|
$
|
27.51
|
|
|
$
|
1,131,697
|
|
|
|
|
3/3/2008
|
(5)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,190
|
|
|
|
|
|
|
|
|
|
|
$
|
858,037
|
|
Landel C. Hobbs
|
|
|
|
(3)
|
|
|
|
|
|
$
|
1,033,333
|
|
|
$
|
2,066,667
|
|
|
$
|
3,100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
(4)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
187,305
|
|
|
$
|
27.51
|
|
|
$
|
1,886,161
|
|
|
|
|
3/3/2008
|
(5)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,982
|
|
|
|
|
|
|
|
|
|
|
$
|
1,430,025
|
|
Michael LaJoie
|
|
|
|
(3)
|
|
|
|
|
|
$
|
262,500
|
|
|
$
|
525,000
|
|
|
$
|
787,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
(4)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,363
|
|
|
$
|
27.51
|
|
|
$
|
577,645
|
|
|
|
|
3/3/2008
|
(5)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,920
|
|
|
|
|
|
|
|
|
|
|
$
|
437,959
|
|
Carl U.J. Rossetti
|
|
|
|
(3)
|
|
|
|
|
|
$
|
250,000
|
|
|
$
|
500,000
|
|
|
$
|
750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
(4)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,948
|
|
|
$
|
27.51
|
|
|
$
|
538,939
|
|
|
|
|
3/3/2008
|
(5)
|
|
|
2/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,862
|
|
|
|
|
|
|
|
|
|
|
$
|
381,344
|
|
|
|
|
(1)
|
|
The date of approval is the date on
which the Compensation Subcommittee reviewed and approved
stock-based awards to be made on a selected future date that
provided sufficient time for TWC to prepare communications
materials for its employees.
|
|
(2)
|
|
The exercise price for the awards
of stock options under the TWC Stock Incentive Plan was
determined based on the closing sale price of Class A
common stock on the date of grant.
|
|
(3)
|
|
Reflects the threshold, target and
maximum payout amounts under the TWCIP of non-equity incentive
plan awards that were awarded in 2008 and were paid out in 2009
under the Bonus Plan and TWCIP. The target payout amount for
each named executive officer was established in accordance with
the terms of the named executive officers employment
agreement. Each maximum payout amount reflects 150% of the
applicable target payout amount, except for
Mr. Britts payout, which is subject to a contractual
limit. There was no target amount established under the TWCIP
for 2008. For a discussion of TWCIP performance goals, see
Compensation Discussion and Analysis.
|
|
(4)
|
|
Reflects awards of stock options to
purchase Class A common stock under the TWC Stock Incentive
Plan and the full grant date fair value of each award under
FAS 123R. See footnote (5) to the Summary Compensation
Table for the assumptions used to determine the grant-date fair
value of the stock options in accordance with FAS 123R.
Does not reflect certain March 2009 antidilution adjustments,
the net effect of which was to increase the exercise price of
these stock options to $35.60 per share of Common Stock and
decrease the number of shares of Common Stock covered by such
stock options by approximately 22.72%. For example,
pre-adjustment options to purchase 1000 shares of
Class A common stock at $27.51 per share would,
post-adjustment, represent options to purchase approximately
773 shares of Common Stock at $35.60 per share.
|
|
(5)
|
|
Reflects awards of RSUs with
respect to Class A common stock under the TWC Stock
Incentive Plan and the full grant date fair value of each award
under FAS 123R. See footnote (4) to the Summary
Compensation Table for the assumptions used to determine the
grant-date fair value of the stock awards in accordance with
FAS 123R. Does not reflect certain March 2009 antidilution
adjustments,
|
34
|
|
|
|
|
the net effect of which was to
reduce the number of RSUs shown in this column by two thirds.
For example, pre-adjustment RSUs with respect to
1000 shares of Class A common stock would,
post-adjustment, represent RSUs with respect to
333.33 shares of Common Stock. When the Special Dividend
was paid, a retained distribution equal to the Special Dividend
was credited on each RSU and will be paid in cash or shares of
Common Stock, pursuant to the holders election, when the
shares of Common Stock underlying the RSUs are distributed to
the holder, subject to the terms of the underlying award (the
Special Dividend retained distribution). The Special
Dividend retained distributions are not reflected in the table.
|
The TWC stock options granted in 2008 become exercisable, or
vest, in installments of 25% on the anniversary of each grant
date over a four-year period, assuming continued employment, and
expire ten years from the grant date. The stock options are
subject to accelerated vesting upon the occurrence of certain
events such as retirement, death or disability. The exercise
price of the stock options cannot be less than the fair market
value of the Class A common stock on the date of grant. In
addition, holders of the stock options do not receive dividends
or dividend equivalents or have any voting rights with respect
to the shares of Class A common stock underlying the stock
options.
The awards of TWC RSUs granted in 2008 vest in equal
installments on each of the third and fourth anniversaries of
the date of grant, assuming continued employment and subject to
accelerated vesting upon the occurrence of certain events such
as retirement, death or disability. Holders of the RSUs are
entitled to receive dividend equivalents on unvested RSUs, if
and when regular cash dividends are paid on outstanding shares
of Class A common stock and at the same rate. The awards of
RSUs confer no voting rights on holders and are subject to
restrictions on transfer and forfeiture prior to vesting. See
Compensation Discussion and Analysis2008
Long-Term Incentive Program and Awards.
Employment
Agreements
The following is a description of the material terms of the
compensation provided to the Companys named executive
officers during the term of their employment pursuant to
employment agreements between the Company or TWE, and each
executive. See Potential Payments Upon Termination
or Change in Control for a description of the payments and
benefits that would be provided to the Companys named
executive officers in connection with a termination of their
employment or a change in control of the Company.
Glenn A. Britt. The Company entered into an
employment agreement with Mr. Britt, effective as of
August 1, 2006, which provides that Mr. Britt will
serve as the Companys Chief Executive Officer through
December 31, 2009, subject to earlier termination as
provided in the agreement. Mr. Britts agreement is
automatically extended for consecutive one-month periods, unless
terminated by either party upon 60 days notice, and
terminates automatically on the date Mr. Britt becomes
eligible for normal retirement at age 65. The agreement
provides Mr. Britt with a minimum annual base salary of
$1,000,000 and an annual discretionary target bonus of
$5,000,000, which will vary subject to Mr. Britts and
the Companys performance from a minimum of $0 up to a
maximum of $6,675,000. In addition, the agreement provides that,
beginning in 2007, for each year of the agreement, the Company
will provide Mr. Britt with long-term incentive
compensation with a target value of approximately $6,000,000
(based on a valuation method established by the Company), which
may be in the form of stock options, RSUs, other equity-based
awards, cash or other components, or any combination of such
forms, as may be determined by the Companys Board of
Directors or, if delegated by the Board, the Compensation
Committee, in its sole discretion. Mr. Britt participates
in the benefit plans and programs available to the
Companys other senior executive officers, including
$50,000 of group life insurance. Mr. Britt also receives an
annual payment equal to two times the premium cost of
$4 million of life insurance as determined under the
Companys GUL insurance program.
Robert D. Marcus. The Company entered into an
employment agreement with Mr. Marcus, effective as of
August 15, 2005, which provides that Mr. Marcus will
serve as the Companys Senior Executive Vice President
through August 15, 2008, subject to earlier termination as
provided in the agreement. Mr. Marcus was appointed Senior
Executive Vice President and Chief Financial Officer effective
January 1, 2008. Mr. Marcus agreement is
automatically extended for consecutive one-month periods, unless
terminated by Mr. Marcus upon 60 days written
notice or by the Company upon written notice specifying the
effective date of such termination. The agreement provides
Mr. Marcus with a minimum annual base salary of $650,000
35
(which was increased to $800,000 by the Compensation Committee
as of January 1, 2008), an annual discretionary target
bonus of 125% of his base salary (which was increased by the
Compensation Committee to 175% as of January 1, 2008),
subject to Mr. Marcus and the Companys
performance, a one-time grant of options to purchase
25,000 shares of Time Warner Common Stock (which was issued
to Mr. Marcus in connection with the execution of the
agreement), a discretionary annual equity and other long-term
incentive compensation award with a minimum target value of
$1,300,000 (which was increased to 225% of base salary by the
Compensation Committee as of January 1, 2008), subject to
Mr. Marcus and the Companys performance, and
participation in the Companys benefit plans and programs,
including $50,000 of group life insurance. Mr. Marcus also
receives an annual payment equal to two times the premium cost
of $2 million of life insurance as determined under the
Companys GUL insurance program.
Landel C. Hobbs. The Company entered into an
employment agreement with Mr. Hobbs, effective as of
February 1, 2008, which provides that Mr. Hobbs will
serve as the Companys Chief Operating Officer through
January 31, 2011, subject to earlier termination as
provided in the agreement. Mr. Hobbs agreement is
automatically extended for consecutive one month periods, unless
terminated by Mr. Hobbs upon 60 days written
notice or by the Company upon written notice specifying the
effective date of such termination. The agreement provides
Mr. Hobbs with a minimum annual base salary of $900,000
(which was increased from $850,000 by the Compensation Committee
as of February 1, 2008), an annual discretionary target
bonus of 233% of his base salary (which was increased from 200%
as of February 1, 2008), subject to Mr. Hobbs
and the Companys performance, a discretionary annual
equity and other long-term incentive compensation award for 2008
with a minimum target value of $3,000,000, subject to
Mr. Hobbs and the Companys performance, and
participation in the Companys benefit plans and programs,
including life insurance. Mr. Hobbs also receives an annual
payment equal to two times the premium cost of $1.5 million
of life insurance as determined under the Companys GUL
insurance program.
Michael LaJoie. The Company entered into an
employment agreement with Mr. LaJoie, effective as of
June 1, 2000, which was renewed and amended, effective as
of January 1, 2009, and provides that Mr. LaJoie will
serve as the Companys Executive Vice President and Chief
Technology Officer through December 31, 2011, subject to
earlier termination as provided in the agreement. The
Companys failure upon the expiration of the agreement to
offer Mr. LaJoie a renewal agreement with terms
substantially similar to those of his current agreement is
considered a termination without cause. The agreement provides
for a minimum annual base salary of $525,000 and an annual
discretionary target bonus of 100% of his base salary, subject
to Mr. LaJoies and the Companys performance,
and participation in the Companys benefit plans and
programs, including life insurance.
Carl U.J. Rossetti. The Company entered into
an employment agreement with Mr. Rossetti, effective as of
June 1, 2000, which provides that Mr. Rossetti will
serve as an Executive Vice President of the Company for a term
of three years from that date, subject to earlier termination as
provided in the agreement. As of January 1 of each year, the
Company may renew the term of Mr. Rossettis
employment agreement for a term of three years from that date.
Currently, Mr. Rossettis employment agreement has
been extended through December 31, 2011. The agreement
provides for a minimum annual base salary (which was increased
to $500,000 by the Compensation Committee as of January 1,
2008), and an annual discretionary target bonus of 100% of his
base salary, subject to Mr. Rossettis and the
Companys performance, and participation in the
Companys benefit plans and programs, including life
insurance.
36
Outstanding
Equity Awards
The following table provides information about each of the
outstanding awards of options to purchase the Companys
Class A common stock and Time Warner Common Stock and the
aggregate TWC and Time Warner RSUs held by each named executive
officer on December 31, 2008. On December 31, 2008,
none of the named executive officers held performance-based
equity awards.
The information in this table does not reflect
(1) antidilution adjustments to the stock option exercise
prices of and number and kind of shares underlying (a) TWC
stock options and RSUs, as applicable, as a result of the
payment of the Special Dividend, the Reverse Stock Split and the
Recapitalization and (b) Time Warner stock options and RSUs
as a result of Time Warners Spin-Off Dividend and
one-for-three reverse stock split and (2) the forfeiture
and vesting of Time Warner stock options and RSUs and the
shortened exercise periods of certain Time Warner stock options
as a result of the Separation. General information about the
impact of the Separation on the awards is provided in certain
footnotes. See Compensation Discussion and
AnalysisSeparation of Time Warner and the
Company.
OUTSTANDING
EQUITY AWARDS AT
DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards(1)
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock That
|
|
|
Stock That
|
|
|
|
|
|
|
Date of
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
|
Name
|
|
Option Grant
|
|
|
Exercisable(2)
|
|
|
Unexercisable(2)
|
|
|
Price(2)
|
|
|
Date(2)
|
|
|
Vested(3)
|
|
|
Vested(4)
|
|
|
|
|
|
Glenn A. Britt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner Cable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
223,923
|
|
|
$
|
4,803,149
|
|
|
|
|
|
|
|
|
4/2/2007
|
|
|
|
40,355
|
|
|
|
121,066
|
|
|
$
|
37.05
|
|
|
|
4/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
|
|
|
|
|
|
|
374,610
|
|
|
$
|
27.51
|
|
|
|
3/2/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,605
|
|
|
$
|
338,066
|
|
|
|
|
|
|
|
|
3/17/1999
|
|
|
|
56,250
|
|
|
|
|
|
|
$
|
46.10
|
|
|
|
3/16/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2000
|
|
|
|
93,750
|
|
|
|
|
|
|
$
|
57.79
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/18/2001
|
|
|
|
112,500
|
|
|
|
|
|
|
$
|
48.96
|
|
|
|
1/17/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/27/2001
|
|
|
|
264,932
|
|
|
|
|
|
|
$
|
45.31
|
|
|
|
2/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/6/2001
|
|
|
|
3,927
|
|
|
|
|
|
|
$
|
38.56
|
|
|
|
4/5/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/17/2001
|
|
|
|
38,333
|
|
|
|
|
|
|
$
|
44.16
|
|
|
|
4/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/24/2001
|
|
|
|
637,500
|
|
|
|
|
|
|
$
|
40.95
|
|
|
|
8/23/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/15/2002
|
|
|
|
100,000
|
|
|
|
|
|
|
$
|
26.65
|
|
|
|
2/14/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/14/2003
|
|
|
|
195,000
|
|
|
|
|
|
|
$
|
10.32
|
|
|
|
2/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2004
|
|
|
|
225,000
|
|
|
|
|
|
|
$
|
17.28
|
|
|
|
2/12/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/18/2005
|
|
|
|
176,250
|
|
|
|
58,750
|
|
|
$
|
17.97
|
|
|
|
2/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
|
90,474
|
|
|
|
90,476
|
|
|
$
|
17.40
|
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Marcus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner Cable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,181
|
|
|
$
|
1,247,983
|
|
|
|
|
|
|
|
|
4/2/2007
|
|
|
|
9,080
|
|
|
|
27,240
|
|
|
$
|
37.05
|
|
|
|
4/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
|
|
|
|
|
|
|
112,383
|
|
|
$
|
27.51
|
|
|
|
3/2/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,593
|
|
|
$
|
207,166
|
|
|
|
|
|
|
|
|
3/17/1999
|
|
|
|
30,000
|
|
|
|
|
|
|
$
|
46.10
|
|
|
|
3/16/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2000
|
|
|
|
52,500
|
|
|
|
|
|
|
$
|
57.79
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/18/2001
|
|
|
|
300,000
|
|
|
|
|
|
|
$
|
48.96
|
|
|
|
1/17/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/6/2001
|
|
|
|
2,081
|
|
|
|
|
|
|
$
|
38.56
|
|
|
|
4/5/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/15/2002
|
|
|
|
125,938
|
|
|
|
|
|
|
$
|
26.65
|
|
|
|
2/14/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/14/2003
|
|
|
|
25,000
|
|
|
|
|
|
|
$
|
10.32
|
|
|
|
2/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2004
|
|
|
|
75,000
|
|
|
|
|
|
|
$
|
17.28
|
|
|
|
2/12/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/18/2005
|
|
|
|
42,000
|
|
|
|
14,000
|
|
|
$
|
17.97
|
|
|
|
2/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
|
35,700
|
|
|
|
35,700
|
|
|
$
|
17.40
|
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/21/2006
|
|
|
|
12,500
|
|
|
|
12,500
|
|
|
$
|
17.23
|
|
|
|
6/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards(1)
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock That
|
|
|
Stock That
|
|
|
|
|
|
|
Date of
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
|
Name
|
|
Option Grant
|
|
|
Exercisable(2)
|
|
|
Unexercisable(2)
|
|
|
Price(2)
|
|
|
Date(2)
|
|
|
Vested(3)
|
|
|
Vested(4)
|
|
|
|
|
|
Landel C. Hobbs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner Cable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,965
|
|
|
$
|
2,165,699
|
|
|
|
|
|
|
|
|
4/2/2007
|
|
|
|
16,478
|
|
|
|
49,436
|
|
|
$
|
37.05
|
|
|
|
4/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
|
|
|
|
|
|
|
187,305
|
|
|
$
|
27.51
|
|
|
|
3/2/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,230
|
|
|
$
|
324,234
|
|
|
|
|
|
|
|
|
3/17/1999
|
|
|
|
18,000
|
|
|
|
|
|
|
$
|
46.10
|
|
|
|
3/16/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2000
|
|
|
|
22,500
|
|
|
|
|
|
|
$
|
57.79
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/4/2000
|
|
|
|
75,000
|
|
|
|
|
|
|
$
|
55.56
|
|
|
|
10/3/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/18/2001
|
|
|
|
225,000
|
|
|
|
|
|
|
$
|
48.96
|
|
|
|
1/17/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/27/2001
|
|
|
|
200,000
|
|
|
|
|
|
|
$
|
31.62
|
|
|
|
9/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2004
|
|
|
|
37,500
|
|
|
|
|
|
|
$
|
17.28
|
|
|
|
2/12/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/18/2005
|
|
|
|
24,000
|
|
|
|
24,000
|
|
|
$
|
17.97
|
|
|
|
2/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
|
29,925
|
|
|
|
59,850
|
|
|
$
|
17.40
|
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael LaJoie
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner Cable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,715
|
|
|
$
|
701,737
|
|
|
|
|
|
|
|
|
4/2/2007
|
|
|
|
5,649
|
|
|
|
16,950
|
|
|
$
|
37.05
|
|
|
|
4/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
|
|
|
|
|
|
|
57,363
|
|
|
$
|
27.51
|
|
|
|
3/2/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,800
|
|
|
$
|
78,468
|
|
|
|
|
|
|
|
|
3/17/1999
|
|
|
|
7,125
|
|
|
|
|
|
|
$
|
46.10
|
|
|
|
3/16/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2000
|
|
|
|
7,125
|
|
|
|
|
|
|
$
|
57.79
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/18/2001
|
|
|
|
14,250
|
|
|
|
|
|
|
$
|
48.96
|
|
|
|
1/17/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/27/2001
|
|
|
|
32,124
|
|
|
|
|
|
|
$
|
45.31
|
|
|
|
2/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/15/2002
|
|
|
|
30,000
|
|
|
|
|
|
|
$
|
26.65
|
|
|
|
2/14/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2004
|
|
|
|
40,000
|
|
|
|
|
|
|
$
|
17.28
|
|
|
|
2/12/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/18/2005
|
|
|
|
27,000
|
|
|
|
13,500
|
|
|
$
|
17.97
|
|
|
|
2/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
|
21,000
|
|
|
|
21,000
|
|
|
$
|
17.40
|
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl U.J. Rossetti
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner Cable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,857
|
|
|
$
|
618,983
|
|
|
|
|
|
|
|
|
4/2/2007
|
|
|
|
5,044
|
|
|
|
15,134
|
|
|
$
|
37.05
|
|
|
|
4/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2008
|
|
|
|
|
|
|
|
49,948
|
|
|
$
|
27.51
|
|
|
|
3/2/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,020
|
|
|
$
|
70,621
|
|
|
|
|
|
|
|
|
3/17/1999
|
|
|
|
23,625
|
|
|
|
|
|
|
$
|
46.10
|
|
|
|
3/16/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/11/1999
|
|
|
|
23,625
|
|
|
|
|
|
|
$
|
44.77
|
|
|
|
8/10/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2000
|
|
|
|
47,250
|
|
|
|
|
|
|
$
|
57.79
|
|
|
|
3/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/18/2001
|
|
|
|
47,250
|
|
|
|
|
|
|
$
|
48.96
|
|
|
|
1/17/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/27/2001
|
|
|
|
115,944
|
|
|
|
|
|
|
$
|
45.31
|
|
|
|
2/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/15/2002
|
|
|
|
125,000
|
|
|
|
|
|
|
$
|
26.65
|
|
|
|
2/14/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/14/2003
|
|
|
|
45,000
|
|
|
|
|
|
|
$
|
10.32
|
|
|
|
2/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2004
|
|
|
|
80,000
|
|
|
|
|
|
|
$
|
17.28
|
|
|
|
2/12/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/18/2005
|
|
|
|
38,250
|
|
|
|
12,750
|
|
|
$
|
17.97
|
|
|
|
2/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
|
18,900
|
|
|
|
18,900
|
|
|
$
|
17.40
|
|
|
|
3/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The dates of grant of each named
executive officers TWC and Time Warner stock options
outstanding as of December 31, 2008 are set forth in the
table, and the vesting dates for each award can be determined
based on the vesting schedules described in this footnote.
Except as noted below, the awards of both TWC and Time Warner
stock options become exercisable in installments of 25% on the
first four anniversaries of the date of grant, assuming
continued employment and subject to accelerated vesting upon the
occurrence of certain events. The Time Warner stock options
listed above that were granted prior to 2001 each had a vesting
schedule that provided for vesting in installments of one-third
on the first three anniversaries of the date of grant, except
that (i) to the extent not already vested, all stock
options awarded prior to 2000 became immediately exercisable in
full upon the approval of the merger of America Online, Inc.
(now named AOL LLC) and Time Warner Inc. (now named
Historic TW Inc.) on January 9, 2000.
|
|
(2)
|
|
These columns do not reflect the
impact of the Separation. As a result of certain March 2009
antidilution adjustments, (a) each of the TWC stock options
in the table has been adjusted to (i) increase the exercise
price per share of Common Stock by approximately 29.4% and
(ii) reduce the number of shares of Common Stock covered by
such stock option by approximately 22.72%, and (b) each of
the Time Warner stock options in the table has been adjusted to
(i) increase the exercise price per share of Time Warner
Common Stock thereof by approximately 123% and (ii) reduce
the number of shares of Time Warner Common Stock covered by such
stock option by approximately 55.2%. In addition, as a result of
the Separation, (a) the unvested Time Warner stock options
held by
|
38
|
|
|
|
|
Messrs. Britt, Marcus and
Rossetti vested on March 12, 2009 and those held by
Messrs. Hobbs and LaJoie were forfeited and (b) the
option expiration dates for vested Time Warner stock options
were shortened such that those held by
(i) Messrs. Hobbs and LaJoie expire on the earlier of
the original expiration date shown in the table and
March 12, 2010, (ii) Mr. Marcus expire on the
earlier of the original expiration date shown in the table and
March 12, 2012 and (iii) Messrs. Britt and
Rossetti expire on the earlier of the original expiration date
shown in the table and March 12, 2014.
|
|
(3)
|
|
This column presents the number of
shares of TWC Class A common stock and Time Warner Common
Stock represented by unvested RSU awards at December 31,
2008 and does not reflect the impact of the Separation or the
antidilution adjustments. The Time Warner and TWC RSUs included
in this column vest equally on each of the third and fourth
anniversaries of the date of grant. The vesting schedules for
the awards of RSUs assume continued employment and are subject
to acceleration upon the occurrence of certain events. The
vesting dates for the Time Warner and TWC unvested RSU awards
are as follows as of December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
Time Warner RSUs
|
|
TWC RSUs
|
|
|
|
|
Name
|
|
That Have Not Vested
|
|
That Have Not Vested
|
|
Date of Grant
|
|
Vesting Dates
|
|
Glenn A. Britt
|
|
|
33,605
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
3/3/2009 and 3/3/2010
|
|
|
|
|
|
|
|
119,959
|
|
|
|
4/2/2007
|
|
|
4/2/2010 and 4/2/2011
|
|
|
|
|
|
|
|
103,964
|
|
|
|
3/3/2008
|
|
|
3/3/2011 and 3/3/2012
|
Robert D. Marcus
|
|
|
7,333
|
|
|
|
|
|
|
|
2/18/2005
|
|
|
2/18/2009
|
|
|
|
13,260
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
3/3/2009 and 3/3/2010
|
|
|
|
|
|
|
|
26,991
|
|
|
|
4/2/2007
|
|
|
4/2/2010 and 4/2/2011
|
|
|
|
|
|
|
|
31,190
|
|
|
|
3/3/2008
|
|
|
3/3/2011 and 3/3/2012
|
Landel C. Hobbs
|
|
|
10,000
|
|
|
|
|
|
|
|
9/16/2005
|
|
|
9/16/2009
|
|
|
|
22,230
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
3/3/2009 and 3/3/2010
|
|
|
|
|
|
|
|
48,983
|
|
|
|
4/2/2007
|
|
|
4/2/2010 and 4/2/2011
|
|
|
|
|
|
|
|
51,982
|
|
|
|
3/3/2008
|
|
|
3/3/2011 and 3/3/2012
|
Michael LaJoie
|
|
|
7,800
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
3/3/2009 and 3/3/2010
|
|
|
|
|
|
|
|
16,795
|
|
|
|
4/2/2007
|
|
|
4/2/2010 and 4/2/2011
|
|
|
|
|
|
|
|
15,920
|
|
|
|
3/3/2008
|
|
|
3/3/2011 and 3/3/2012
|
Carl U.J. Rossetti
|
|
|
7,020
|
|
|
|
|
|
|
|
3/3/2006
|
|
|
3/3/2009 and 3/3/2010
|
|
|
|
|
|
|
|
14,995
|
|
|
|
4/2/2007
|
|
|
4/2/2010 and 4/2/2011
|
|
|
|
|
|
|
|
13,862
|
|
|
|
3/3/2008
|
|
|
3/3/2011 and 3/3/2012
|
|
|
|
|
|
As a result of certain March 2009
antidilution adjustments, the number of TWC RSUs has been
reduced by two-thirds. A Special Dividend retained distribution
was credited on each TWC RSU and will be paid in cash or shares
of Common Stock, pursuant to the holders election, when
the shares of Common Stock underlying the RSUs are distributed
to the holder, subject to the terms of the underlying award. The
Special Dividend retained distributions are not reflected in the
table. As a result of the Separation, Time Warner RSUs held by
Messrs. Britt, Marcus and Rossetti that were not vested on
March 12, 2009, are no longer subject to a risk of
forfeiture and the underlying shares of Time Warner Common Stock
will be distributed to the holder on the original vesting dates
of the related RSU award. Time Warner RSUs held by
Messrs. Hobbs and LaJoie that were not vested on
March 12, 2009 were forfeited on that date other than a pro
rata portion of the next vesting installment, which are no
longer subject to risk of forfeiture and the underlying shares
of Time Warner Common Stock will be distributed on their
original vesting dates. In addition, the number of non-forfeited
Time Warner RSUs held by each of the named executive officers
was reduced by approximately 55.2%.
|
|
(4)
|
|
Calculated using the NYSE
pre-reverse stock split closing price on December 31, 2008,
of $21.45 per share of TWC Class A common stock and $10.06
per share of Time Warner Common Stock, as applicable.
|
39
Option
Exercises and Stock Vested
The following table sets forth as to each of the named executive
officers information on exercises of Time Warner stock options
and the vesting of Time Warner restricted stock awards during
2008, including: (i) the number of shares of Time Warner
Common Stock underlying options exercised during 2008;
(ii) the aggregate dollar value realized upon exercise of
such options; (iii) the number of shares of Time Warner
Common Stock received from the vesting of awards of Time Warner
restricted stock during 2008; and (iv) the aggregate dollar
value realized upon such vesting (based on the stock price of
Time Warner Common Stock on the vesting dates). During 2008,
none of the named executive officers (a) exercised TWC
stock options or (b) had TWC RSUs that vested. This table
does not reflect the impact of Time Warners Spin-Off
Dividend or reverse stock split effected in March 2009.
OPTION
EXERCISES AND STOCK VESTED DURING 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner
|
|
|
Time Warner
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized
|
|
|
Acquired on
|
|
|
Value Realized
|
|
Name
|
|
Exercise
|
|
|
on Exercise(1)
|
|
|
Vesting(2)
|
|
|
on Vesting(3)
|
|
|
Glenn A. Britt
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
$
|
578,200
|
|
Robert D. Marcus
|
|
|
|
|
|
|
|
|
|
|
7,333
|
|
|
$
|
121,728
|
|
Landel C. Hobbs
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
139,500
|
|
Michael LaJoie
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl U.J. Rossetti
|
|
|
40,000
|
|
|
$
|
242,452
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Calculated based on the difference
between the sale price per share of Time Warner Common Stock and
the option exercise price.
|
|
(2)
|
|
The awards of Time Warner
restricted stock and RSUs that vested in 2008 include
(a) Time Warner restricted stock awarded to Mr. Britt
on February 13, 2004 and (b) Time Warner RSUs awarded
to Messrs. Hobbs and Marcus on September 16, 2005 and
February 18, 2005, respectively, each of which vested or
will vest in installments of one half on the third and fourth
anniversaries of the date of grant subject to acceleration upon
the occurrence of certain events such as death, disability or
retirement. The payment of withholding taxes due upon vesting of
the restricted stock and RSUs (unless an election under
section 83(b) of the Internal Revenue Code was made at the
time of the grant) generally may be made in cash or by having
full shares of Time Warner Common Stock withheld from the number
of shares delivered to the individual. Each of the named
executive officers has a right to receive dividends on unvested
awards of restricted stock and dividend equivalents on awards of
RSUs, if regular cash dividends are paid on the outstanding
shares of Time Warner Common Stock. The holders have the right
to vote unvested shares of Time Warner restricted stock on
matters presented to Time Warner stockholders, but do not have
any right to vote on such matters in connection with RSUs.
|
|
(3)
|
|
Calculated using (a) the
average of the high and low sale prices of Time Warner Common
Stock on the vesting date, which were $16.53 per share on
February 13, 2008 and $13.95 on September 16, 2008 and
(b) $16.60 for the February 18, 2008 vesting date,
representing the average of the average of the high and low sale
prices of Time Warner Common Stock on each of the trading day
before and after the vesting date.
|
Pension
Plans
TWC
Pension Plans
Each of the named executive officers currently participates in
the Time Warner Cable Pension Plan, a tax qualified defined
benefit pension plan, and the Time Warner Cable Excess Benefit
Pension Plan (the Excess Benefit Plan), a
nonqualified defined benefit pension plan (collectively, the
TWC Pension Plans), which are sponsored by the
Company. Each of Messrs. Britt, Marcus and LaJoie was a
participant in pension plans sponsored by Time Warner until
March 31, 2003, August 14, 2005 and July 31,
1995, respectively, when their respective participation in the
Time Warner Cable Pension Plan commenced.
The Excess Benefit Plan is designed to provide supplemental
payments to highly compensated employees in an amount equal to
the difference between the benefits payable to an employee under
the tax-qualified Time Warner Cable Pension Plan and the amount
the employee would have received under that plan if the
limitations under the tax laws relating to the amount of benefit
that may be paid and compensation that may be taken into account
in calculating a pension payment were not in effect. In
determining the amount of excess
40
benefit pension payment, the Excess Benefit Plan takes into
account compensation earned up to $350,000 per year (including
any deferred bonus). The pension benefit under the Excess
Benefit Plan is payable, at the participants election, in
either a lump sum or 120 monthly installments starting six
months following termination of employment.
Benefit payments are calculated using the highest consecutive
five-year average annual compensation, which is referred to as
average compensation. Compensation covered by the
TWC Pension Plans takes into account salary, bonus, some
elective deferrals and other compensation paid, but excludes the
payment of deferred or long-term incentive compensation and
severance payments. The annual pension payment under the terms
of the TWC Pension Plans, if the employee is vested, and if paid
as a single life annuity, commencing at age 65, is an
amount equal to the sum of:
|
|
|
|
|
1.25% of the portion of average compensation that does not
exceed the average of the Social Security taxable wage base
ending in the year the employee reaches the Social Security
retirement age, referred to as covered compensation,
multiplied by the number of years of benefit service up to
35 years, plus
|
|
|
|
1.67% of the portion of average compensation that exceeds
covered compensation, multiplied by the number of years of
benefit service up to 35 years, plus
|
|
|
|
0.5% of average compensation multiplied by the employees
number of years of benefit service in excess of 35 years,
plus
|
|
|
|
a supplemental benefit in the amount of $60 multiplied by the
employees number of years of benefit service up to
30 years, with a maximum supplemental benefit of $1,800 per
year.
|
In addition, in determining the benefits under the TWC Pension
Plans, special rules apply to various participants who were
previously participants in plans that have been merged into the
TWC Pension Plans and of various participants in the TWC Pension
Plans prior to January 1, 1994. Reduced benefits are
available in the case of retirement before age 65 and in
other optional forms of benefits payouts. Amounts calculated
under the pension formula that exceed Internal Revenue Code
limits are payable under the Excess Benefit Plan.
Eligible employees become vested in benefits under the TWC
Pension Plans after completion of five years of service. For
vesting purposes under the TWC Pension Plans, Mr. Marcus is
credited with service under the TW Pension Plans and is
therefore fully vested.
Time
Warner Pension Plans
The Time Warner Employees Pension Plan, as amended (the
Old TW Pension Plan), which provides benefits to
eligible employees of Time Warner and certain of its
subsidiaries, was amended effective as of January 1, 2000,
as described below, and was renamed (the Amended TW
Pension Plan and, together with the Old TW Pension Plan,
the TW Pension Plans). Messrs. Britt, Marcus
and LaJoie have ceased to be active participants in the TW
Pension Plans described below and commenced participation in the
TWC Pension Plans described above. Each of them is entitled to
benefits under the TW Pension Plans in addition to the TWC
Pension Plans.
Under the Amended TW Pension Plan, a participant accrues
benefits equal to the sum of 1.25% of a participants
average annual compensation (defined as the highest average
annual compensation for any five consecutive full calendar years
of employment, which includes regular salary, overtime and shift
differential payments, and non-deferred bonuses paid according
to a regular program) not in excess of his covered compensation
up to the applicable average Social Security wage base and 1.67%
of his average annual compensation in excess of such covered
compensation multiplied by his years of benefit service (not in
excess of 30). Compensation for purposes of calculating average
annual compensation under the TW Pension Plans is limited to
$200,000 per year for 1988 through 1993, $150,000 per year for
1994 through 2001 and $200,000 per year for 2002 and thereafter
(each subject to adjustments provided in the Internal Revenue
Code). Eligible
41
employees become vested in all benefits under the TW Pension
Plans on the earlier of five years of service or certain other
events.
Under the Old TW Pension Plan, a participant accrues benefits on
the basis of
12/3%
of the participants average annual compensation (defined
as the highest average annual compensation for any five
consecutive full and partial calendar years of employment, which
includes regular salary, overtime and shift differential
payments, and non-deferred bonuses paid according to a regular
program) for each year of service up to 30 years and 0.50%
for each year of service over 30. Annual pension benefits under
the Old TW Pension Plan are reduced by a Social Security offset
determined by a formula that takes into account benefit service
of up to 35 years, covered compensation up to the average
Social Security wage base and a disparity factor based on the
age at which Social Security benefits are payable (the
Social Security Offset). Under the Old TW Pension
Plan and the Amended TW Pension Plan, the pension benefit of
participants on December 31, 1977 in the former Time
Employees Profit-Sharing Savings Plan (the Profit
Sharing Plan) is further reduced by a fixed amount
attributable to a portion of the employer contributions and
investment earnings credited to such employees account
balances in the Profit Sharing Plan as of such date (the
Profit Sharing Offset).
Under the Amended TW Pension Plan, employees who are at least
62 years old and have completed at least ten years of
service may elect early retirement and receive the full amount
of their annual pension (calculated as described above). This
provision could apply to Messrs. Marcus and LaJoie with
respect to their benefits under the TW Plans. Under the Old TW
Pension Plan, employees who are at least 60 years old and
have completed at least ten years of service may elect early
retirement and receive the full amount of their annual pension
(calculated as described above). This provision could apply to
Mr. Britt.
Federal law limits both the amount of compensation that is
eligible for the calculation of benefits and the amount of
benefits derived from employer contributions that may be paid to
participants under both of the TW Pension Plans. However, as
permitted by the Employee Retirement Income Security Act of
1974, as amended (ERISA), Time Warner has adopted
the Time Warner Excess Benefit Pension Plan (the TW Excess
Plan). The TW Excess Plan provides for payments by Time
Warner of certain amounts that eligible employees would have
received under the TW Pension Plans if eligible compensation
(including deferred bonuses) were limited to $250,000 in 1994
(increased 5% per year thereafter, to a maximum of $350,000) and
there were no payment restrictions. The amounts shown in the
table do not reflect the effect of an offset that affects
certain participants in the TW Pension Plans on
December 31, 1977.
42
Set forth in the table below is each named executive
officers years of credited service and the present value
of his accumulated benefit under each of the pension plans
pursuant to which he would be entitled to a retirement benefit
computed as of December 31, 2008, the pension plan
measurement date used for financial statement reporting purposes
in the Companys audited financial statements for the year
ended December 31, 2008. The estimated amounts are based on
the assumption that payments under the TWC Pension Plans and the
TW Pension Plans will commence upon normal retirement (generally
age 65) or early retirement (for those who have at
least ten years of service), that the TWC Pension Plans and the
TW Pension Plans will continue in force in their forms as of
December 31, 2008, that the maximum annual covered
compensation is $350,000 and that no joint and survivor annuity
will be payable (which would on an actuarial basis reduce
benefits to the employee but provide benefits to a surviving
beneficiary). Amounts calculated under the pension formula which
exceed ERISA limits will be paid under the Excess Benefit Plan
or the TW Excess Plan, as the case may be, from TWCs or
Time Warners assets, respectively, and are included in the
present values shown in the table.
PENSION
BENEFITS FOR 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Years
|
|
|
Present Value of
|
|
|
|
|
|
|
|
|
Credited
|
|
|
Accumulated
|
|
|
Payments
|
|
Name
|
|
Plan Name
|
|
Service(1)
|
|
|
Benefit(2)
|
|
|
During 2008
|
|
|
Glenn A. Britt(3)
|
|
Time Warner Cable Pension Plan
|
|
|
5.8
|
|
|
$
|
125,210
|
|
|
|
|
|
|
|
Time Warner Cable Excess Benefit Plan
|
|
|
5.8
|
|
|
$
|
81,890
|
|
|
|
|
|
|
|
Old TW Pension Plan
|
|
|
30.7
|
|
|
$
|
1,177,200
|
(4)
|
|
|
|
|
|
|
TW Excess Plan(5)
|
|
|
30.7
|
|
|
$
|
806,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
36.5
|
|
|
$
|
2,190,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Marcus
|
|
Time Warner Cable Pension Plan
|
|
|
3.4
|
|
|
$
|
33,760
|
|
|
|
|
|
|
|
Time Warner Cable Excess Benefit Plan
|
|
|
3.4
|
|
|
$
|
22,590
|
|
|
|
|
|
|
|
Amended TW Pension Plan
|
|
|
7.7
|
|
|
$
|
96,020
|
|
|
|
|
|
|
|
TW Excess Plan(5)
|
|
|
7.7
|
|
|
$
|
70,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
11.1
|
|
|
$
|
222,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Landel C. Hobbs
|
|
Time Warner Cable Pension Plan
|
|
|
7.2
|
|
|
$
|
83,380
|
|
|
|
|
|
|
|
Time Warner Cable Excess Benefit Plan
|
|
|
7.2
|
|
|
$
|
55,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
7.2
|
|
|
$
|
138,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael LaJoie
|
|
Time Warner Cable Pension Plan
|
|
|
13.4
|
|
|
$
|
253,770
|
|
|
|
|
|
|
|
Time Warner Cable Excess Benefit Plan
|
|
|
13.4
|
|
|
$
|
166,330
|
|
|
|
|
|
|
|
Amended TW Pension Plan
|
|
|
1.6
|
|
|
$
|
37,710
|
|
|
|
|
|
|
|
TW Excess Plan
|
|
|
1.6
|
|
|
$
|
27,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
15.0
|
|
|
$
|
484,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl U.J. Rossetti
|
|
Time Warner Cable Pension Plan
|
|
|
22.0
|
|
|
$
|
607,620
|
|
|
|
|
|
|
|
Time Warner Cable Excess Benefit Plan
|
|
|
22.0
|
|
|
$
|
392,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
22.0
|
|
|
$
|
1,000,120
|
|
|
|
|
|
|
|
|
(1)
|
|
Consists of the number of years of
service credited to the executive officers as of
December 31, 2008 for the purpose of determining benefit
service under the applicable pension plan.
|
|
(2)
|
|
The present values of accumulated
benefits as of December 31, 2008 were calculated for the
TWC Plans using a 6.17% discount rate and for the TW Pension
Plans and the TW Excess Plan using a 6.09% discount rate and the
RP-2000 Mortality Table, consistent with the assumptions used in
the calculation of the Companys benefit obligations as
disclosed in Note 13 to the audited consolidated financial
statements of the Company included in the 2008
Form 10-K.
All benefits are payable at the earliest retirement age at which
unreduced benefits are payable (which is age 65 under the
TWC Pension Plans, age 62 under the TW Pension Plans in the
case of Messrs. Marcus and LaJoie, and age 60 under
the TW Pension Plans in the case of Mr. Britt) as a life
annuity, except for Mr. Britts
|
43
|
|
|
|
|
benefits under the TW Pension
Plans, which are assumed payable as a lump sum determined using
a 6.09% lump sum rate and the RP-2000 Mortality Table as of
December 31, 2008. No preretirement turnover is reflected
in the calculations.
|
|
(3)
|
|
Under Mr. Britts
employment agreement, in the event that the benefits
Mr. Britt receives upon retirement are not as generous as
benefits he would have received if he had participated in the TW
Pension Plans for his entire tenure, the Company will provide
him or his survivors, if applicable, with the financial
equivalent of the difference between the two benefits. See
Potential Payments Upon Termination or Change
in ControlGlenn A. Britt.
|
|
(4)
|
|
Because of certain grandfathering
provisions under the TW Pension Plans, the benefit of
participants with a minimum of ten years of benefit service
whose age and years of benefit service equal or exceed
65 years as of January 1, 2000, including
Mr. Britt, will be determined under either the provisions
of the Old TW Pension Plan or the Amended TW Pension Plan,
whichever produces the greater benefit. The amount shown in the
table is greater than the estimated annual benefit payable under
the Amended TW Pension Plan and the TW Excess Plan.
|
|
(5)
|
|
During 2008, Messrs. Britt and
Marcus each elected to receive a lump-sum distribution of the
present value of his accumulated benefit under the TW Excess
Plan as of June 30, 2009. This payment is expected to be
made by Time Warner on or about July 1, 2009.
|
Nonqualified
Deferred Compensation
Prior to 2003, TWEs unfunded deferred compensation plan
generally permitted employees whose annual cash compensation
exceeded a designated threshold (including certain named
executive officers) to defer receipt of all or a portion of
their annual bonus until a specified future date at which a
lump-sum or installment distribution would be made based on the
participants election. During the deferral period, the
participant selects a crediting rate or rates to be applied to
the deferred amount from certain of the third party investment
vehicles then offered under the TWC Savings Plan and may change
that selection quarterly. Since March 2003, deferrals may no
longer be made under the deferred compensation plan but amounts
previously credited under the deferred compensation plan
continue to track the available crediting rate elections.
Mr. Marcus participated in the Time Warner Inc. Deferred
Compensation Plan prior to being employed by TWC. The terms of
the Time Warner plan are substantially the same, except that
employees of Time Warner may still make deferrals under the
plan. While Mr. Marcus may no longer make deferrals under
the Time Warner plan, during the deferral period, he may select
the crediting rate applied to the deferred amount similarly to
accounts maintained under TWEs plan. In 2008,
Mr. Marcus elected to receive a lump-sum distribution of
his account balance under the Time Warner Inc. Deferred
Compensation Plan in April 2009.
During his employment with Turner Broadcasting System, Inc. (a
subsidiary of Time Warner), prior to his employment by TWC,
Mr. Hobbs deferred a portion of his compensation under the
Turner Broadcasting System, Inc. Supplemental Benefit Plan, a
nonqualified defined contribution plan, and received matching
contributions. While he may no longer make deferrals under this
plan, he may maintain his existing account and select among
several crediting rates, similar to those available under the
Time Warner Savings Plan, to be applied to the balance
maintained in a rabbi trust on his behalf and may change his
selection of crediting rates once per month. Deferred amounts
are payable in April following the year in which his employment
is terminated, subject to the requirements of Section 409A
of the Internal Revenue Code. In 2008, Mr. Hobbs elected to
receive a lump-sum distribution of his account balance in April
2009.
In addition, prior to 2001, pursuant to his employment agreement
then in place, TWE made contributions for Mr. Britt to a
separate special deferred compensation account maintained in a
grantor trust. This individual account is invested in certain
eligible securities by a third-party investment advisor
designated by the Company (subject to Mr. Britts
approval). The accrued amount will be paid to Mr. Britt in
accordance with the terms of the deferred compensation
arrangements. In general, except as otherwise described under
Potential Payments Upon Termination or Change in
Control, payments under Mr. Britts special
deferred compensation account commence following the earlier of
December 31, 2009 and the date Mr. Britt ceases to be
treated as an employee of the Company for any reason. Earnings
on the account are based on the earnings of the actual
investments selected by the investment advisor, adjusted for
taxes on realized income computed as if the account was a
stand-alone corporation conducting 40% of its business in New
York City. The account is reduced by such taxes on a net
operating profit basis or credited with a tax benefit in the
event the account sustains a net operating loss. There is no
guaranteed rate of return on accounts maintained under any of
these deferred compensation arrangements.
44
Set forth in the table below is information about the earnings,
if any, credited to the accounts maintained by the named
executive officers under these arrangements and any withdrawal
or distributions therefrom during 2008 and the balance in the
account on December 31, 2008.
NONQUALIFIED
DEFERRED COMPENSATION FOR 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Balance at
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings
|
|
|
Withdrawals/
|
|
|
December 31,
|
|
Name
|
|
in 2008
|
|
|
in 2008
|
|
|
in 2008(4)
|
|
|
Distributions
|
|
|
2008
|
|
|
Glenn A. Britt(1)
|
|
|
|
|
|
|
|
|
|
$
|
(1,039,941
|
)
|
|
|
|
|
|
$
|
2,567,037
|
|
Robert D. Marcus(2)
|
|
|
|
|
|
|
|
|
|
$
|
(538,691
|
)
|
|
|
|
|
|
$
|
1,094,138
|
|
Landel C. Hobbs(3)
|
|
|
|
|
|
|
|
|
|
$
|
(109,540
|
)
|
|
|
|
|
|
$
|
169,950
|
|
Michael LaJoie
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl U.J. Rossetti
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The amounts reported for
Mr. Britt consist of the aggregate earnings (loss) and the
aggregate year-end balance credited to his nonqualified deferred
compensation under the Time Warner Excess Profit Sharing Plan,
which is now maintained under the Time Warner Entertainment
Deferred Compensation Plan and credited with interest,
compounded daily at the long-term applicable federal rate
published monthly by the Internal Revenue Service (earnings of
$3,577, year-end balance of $86,621) and his individual deferred
compensation account provided under the terms of his employment
agreement (loss of $1,043,518, year-end balance of $2,480,416).
|
|
(2)
|
|
The amounts reported for
Mr. Marcus reflect the aggregate earnings (loss) and the
year-end balance credited to his nonqualified deferred
compensation under the Time Warner Deferred Compensation Plan.
|
|
(3)
|
|
The amounts reported for
Mr. Hobbs reflect the aggregate earnings (loss) and the
year-end balance credited to his account in the Turner
Broadcasting System, Inc. Supplemental Benefit Plan.
|
|
(4)
|
|
None of the amounts reported in
this column are required to be reported as compensation for
fiscal year 2008 in the Summary Compensation Table.
|
Potential
Payments Upon Termination or Change in Control
The following summaries and tables describe and quantify the
potential additional payments and benefits that would be
provided to each of the Companys named executive officers
in connection with a termination of employment or a change in
control of the Company on December 31, 2008 under the
executives employment agreement, in each case as in effect
on such date and the Companys other compensation plans and
programs. In determining the benefits payable upon certain
terminations of employment, the Company has assumed in all cases
that (i) the executives employment terminates on
December 31, 2008, (ii) he does not become employed by
a new employer or return to work for the Company and
(iii) unless otherwise noted, the Company continues to be a
consolidated subsidiary of Time Warner during the
post-termination period when the executive continues to be
considered an employee of the Company, despite the effectiveness
of the Separation on March 12, 2009.
Impact of the Separation. As a result
of the Separation, under the terms of the plans and award
agreements under which the Time Warner stock option and RSU
awards were granted, employees of the Company with outstanding
Time Warner equity awards, including the named executive
officers, were treated as if their employment with Time Warner
was terminated without cause at the time of the Separation,
March 12, 2009. As discussed above, this treatment resulted
in the forfeiture of unvested Time Warner stock options and
shortened exercise periods for vested stock options and pro rata
vesting of the next installment of (and forfeiture of the
remainder of) the RSU awards for TWC employees other than those
who either satisfied the retirement eligibility provisions in
the Time Warner equity plans and related award agreements or
were party to an employment agreement providing for different
treatment. Messrs. Britt and Rossetti satisfied the
retirement eligibility provisions of the Time Warner equity
plans on the date of the Separation, and Mr. Marcus
employment agreement expressly provides for a circumstance such
as the Separation. As a result, the outstanding Time Warner
stock options and RSUs held by Messrs. Britt, Marcus and
Rossetti became fully vested and no longer subject to a risk of
forfeiture on March 12, 2009, and their stock options will
be exercisable for five years after that date (three years for
Mr. Marcus), but not beyond their original expiration
dates. TWC intends to grant
make-up
TWC equity awards or make cash payments to TWC employees,
45
including the named executive officers, that are generally
intended to offset any loss of economic value associated with
any forfeiture or shortened exercise period of Time Warner
equity awards as a result of the Separation.
Glenn
A. Britt
Termination without Cause/Company Material
Breach. Under his employment agreement,
Mr. Britt is entitled to certain payments and benefits upon
a termination without cause, which includes the
Companys termination of his employment under the
employment agreement without cause or his
termination of such employment due to the Companys
material breach. For this purpose, cause means
certain felony convictions and certain willful and intentional
actions by Mr. Britt including failure to perform material
duties; misappropriation, embezzlement or destruction of the
Companys property; material breach of duty of loyalty to
the Company having a significant adverse financial impact;
improper conduct materially prejudicial to the Companys
business; and material breach of certain restrictive covenants
regarding non-competition, hiring of employees, and
nondisclosure of confidential information. A material breach
includes the Companys failure to cause a successor to
assume the Companys obligations under the employment
agreement; the Companys or a successors failure to
offer Mr. Britt the CEO position after a merger, sale,
joint venture or other combination of assets with another entity
in the cable business; Mr. Britt not being employed as the
Companys CEO with authority, functions, duties and powers
consistent with that position; Mr. Britt not reporting to
the Board; and Mr. Britts principal place of
employment being anywhere other than the greater Stamford,
Connecticut or New York, New York areas.
In the event of a termination without cause,
Mr. Britt is entitled to the following payments and
benefits:
|
|
|
|
|
any earned but unpaid base salary;
|
|
|
|
a pro-rata portion of his average annual bonus,
which is defined as the average of his two largest annual
bonuses paid in the prior five years, except that if
Mr. Britt has not been paid any full-year annual bonus
under his current employment agreement, then he is entitled to
be paid his target annual bonus, or if he has been paid only one
full-year annual bonus under his current employment agreement,
he will be paid the average of such full-year annual bonus and
his target annual bonus. The Company will pay this bonus between
January 1 and March 15 of the calendar year following the year
of termination, which is the same time the full annual bonus
would have been paid under the employment agreement had such
termination not occurred;
|
|
|
|
any unpaid bonus for the year before the year in which
termination of employment occurs, to the extent the bonus amount
has been determined or, if not determined, it will be deemed to
be his average annual bonus;
|
|
|
|
any accrued but unpaid long-term compensation;
|
|
|
|
until 24 months after termination, Mr. Britt will
continue to be treated as an employee of the Company and
continue to receive his base salary (paid on the Companys
normal payroll payment dates in effect immediately prior to
Mr. Britts termination), his average annual bonus,
the continuation of his benefits (except for additional pension
plan accrual and contributions to the TWC Savings Plan),
including automobile allowance and financial services benefits
but not including any additional stock-based awards, unless
Mr. Britt dies during such period, in which case these
benefits will be replaced with the death benefits described
below;
|
|
|
|
office space, secretarial services, office facilities, services
and furnishings reasonably appropriate to an employee of
Mr. Britts position and responsibilities prior to
termination, but taking into account his reduced need for such
space, services, facilities and furnishings. The Company will
provide these benefits for no charge for up to 12 months
after termination. These benefits will cease if Mr. Britt
commences full-time employment with another employer;
|
46
|
|
|
|
|
all stock options granted to Mr. Britt by Time Warner will
continue to vest, and these vested stock options will remain
exercisable (but not beyond the original term of the options)
while Mr. Britt is treated as an employee of the Company;
|
|
|
|
because Mr. Britt otherwise qualifies for retirement under
the applicable stock option agreement, the
retirement-eligibility provision of Mr. Britts stock
option agreements will govern, so that all stock options granted
to Mr. Britt by Time Warner will (a) vest immediately
on the date Mr. Britt ceases to be treated as an employee
of the Company and (b) remain exercisable for five years
after Mr. Britt ceases to be treated as an employee of the
Company (but not beyond the original term of the options), see
Equity Awards: Stock Options and Restricted Stock
UnitsRetirement;
|
|
|
|
if the date Mr. Britt ceases to be treated as an employee
because of a termination without cause occurs before
a change in control transaction (as described below) and
Mr. Britt forfeits any restricted stock grants because of
such termination, then, as of the date that Mr. Britt
ceases to be treated as an employee of the Company,
Mr. Britt will receive a cash payment equal to the value of
any forfeited restricted stock based on the fair market value of
the stock as of the date of termination; and
|
|
|
|
Mr. Britts special deferred compensation account will
be distributed in a lump-sum payment following the earlier of
December 31, 2009 and the date he ceases to be treated as
an employee of the Company.
|
Conditions and Obligations Applicable to Receipt of Payments
and Benefits. Mr. Britts right to
receive these payments and benefits upon a termination
without cause is conditioned on his execution of a release
of claims against the Company no later than 60 days after
Mr. Britts separation of service from the Company. If
Mr. Britt does not execute a release of claims, he will
receive a severance payment determined in accordance with the
Companys policies relating to notice and severance.
Mr. Britt is required to engage in any mitigation necessary
to preserve the Companys tax deduction in respect of the
payments described above and avoid applicability of the
golden parachute excise taxes and related lost
corporate tax deduction. Also, if, following a termination
without cause, Mr. Britt obtains other employment
(other than with a non-profit organization or government
entity), he is required to pay over to the Company the total
cash salary and bonus (but not any equity-based compensation or
similar benefit) payable to him by a new employer for services
provided until December 31, 2009 to the extent the amounts
the Company has paid him are in excess of any severance to which
he would be entitled from the Company under its standard
severance policies. The payments may also be delayed to the
extent the Company deems it necessary for compliance with
Section 409A of the Internal Revenue Code, governing
nonqualified deferred compensation.
Change in Control. Under his employment
agreement, Mr. Britt is entitled to certain payments and
benefits if the Company ceases to be a consolidated subsidiary
of Time Warner or if Time Warner disposes of all or
substantially all of the Companys assets resulting in the
financial results of the Companys business not being
consolidated with Time Warners financial results (each a
TWC Deconsolidation). Upon such a transaction,
because Mr. Britt qualifies for retirement under the
applicable stock option agreement, the retirement-eligibility
provision of Mr. Britts stock option agreements would
govern, so that all Time Warner stock options granted to
Mr. Britt would (a) vest immediately and
(b) remain exercisable for five years following the date of
the transaction (but not beyond the original term of the
options). All Time Warner RSUs or other awards would be treated
pursuant to the retirement eligibility provisions of the
applicable plans as if Mr. Britts employment was
terminated without cause on the date of closing of the
transaction. Payments or benefits may also be delayed to the
extent the Company deems it necessary for compliance with
Section 409A of the Internal Revenue Code.
Disability. Under his employment agreement,
Mr. Britt is entitled to payments and benefits if he
becomes disabled and has not resumed his duties after six
consecutive months or an aggregate of six months in any
12-month
period. In such event, the Company will pay him a pro-rata bonus
for the year in which the disability occurs (which will be
calculated based on his average annual bonus, described above).
In addition, through the later of December 31, 2009 or
12 months following the date the disability occurs,
Mr. Britt will continue to be treated as an employee, and
the Company will pay Mr. Britt disability benefits equal to
75% of his annual base salary and average annual bonus, and he
will continue to be eligible to participate in the
Companys benefit plans (other than equity-based plans,
additional pension plan accruals and contributions to
47
the TWC Savings Plan) and to receive his other benefits
(including automobile allowance and financial services). The
Company may generally deduct from these payments amounts equal
to disability payments received by Mr. Britt during this
payment period from Workers Compensation, Social Security
and the Companys disability insurance policies.
Mr. Britts special deferred compensation account will
be distributed in a lump-sum payment following the date he
ceases to be considered an employee.
Retirement. No benefits or payments provided
above in connection with a termination without cause or due to
disability will be payable after Mr. Britts normal
retirement date at age 65. Under his employment agreement
and a separate agreement with Time Warner, Mr. Britt is
entitled to certain payments and benefits when he retires. Under
his employment agreement, to the extent the benefits
Mr. Britt receives upon retirement are not as generous as
benefits he would have received if he had participated in the
defined benefit pension plans offered by Time Warner instead of
the Companys defined benefit pension plans, then the
Company will provide Mr. Britt with the financial
equivalent of the more generous benefits. In addition, Time
Warner has agreed to ensure that Mr. Britt receives the
equivalent of the benefits he would have received under Time
Warners retiree medical program if he had retired from
Time Warner on the same terms and conditions as senior corporate
executives of Time Warner upon retirement. This commitment is
conditioned on Mr. Britts retiring pursuant to his
employment agreement.
Death. Under his employment agreement, if
Mr. Britt dies, the employment agreement and all of the
Companys obligations to make any payments under the
agreement terminate, except that Mr. Britts estate or
designated beneficiary is entitled to receive:
(i) Mr. Britts salary to the last day of the
month in which his death occurs, (ii) any unpaid bonus for
the year prior to his death (if not previously determined, then
based on his average annual bonus) and (iii) bonus
compensation, at the time bonuses are normally paid, based on
his average annual bonus but prorated according to the number of
whole or partial months Mr. Britt was employed by the
Company in the calendar year. Mr. Britts special
deferred compensation account will be distributed in a lump sum
within 75 days following his death.
For Cause. Under Mr. Britts
employment agreement, if the Company terminates his employment
for cause (as defined above), the Company will have no further
obligations to Mr. Britt other than (i) to pay his
base salary through the effective date of termination,
(ii) to pay any bonus for any year prior to the year in
which such termination occurs that has been determined but not
yet paid as of the date of such termination, and (iii) to
satisfy any rights Mr. Britt has pursuant to any insurance
or other benefit plans or arrangements. Mr. Britts
special deferred compensation account will be valued as of the
earlier of December 31, 2009 and 12 months after
termination of employment, and distributed in a lump sum within
75 days of such valuation date.
See Pension Plans for a description of
Mr. Britts entitlements under the Companys
pension plans and Time Warners pension plans. See
Nonqualified Deferred Compensation for a
description of Mr. Britts entitlements under
nonqualified deferred compensation plans in which he
participates.
Certain Restrictive
Covenants. Mr. Britts employment
agreement provides that he is subject to restrictive covenants
that obligate him, among other things: (1) not to disclose
any of the Companys confidential matters, (2) not to
hire certain of the Companys employees for one year
following termination of employment for cause, without cause, or
due to retirement at age 65; and (3) not to compete
with the Companys business during his employment and until
the latest of December 31, 2009, the date Mr. Britt
ceases to be considered an employee and 12 months after the
effective date of any termination of the term of employment for
cause, without cause, or due to retirement at age 65.
Equity Awards: Stock Options and Restricted Stock
Units. Unless a more favorable outcome is
specified in Mr. Britts employment agreement, the
terms of Mr. Britts equity award agreements govern
his entitlements under those awards in the event of a
termination of employment with or without cause, retirement or a
change in control.
Termination without Cause/Material Breach. In
the event of a termination without cause, Mr. Britts
Time Warner and TWC unvested stock options and RSUs would
continue to vest during the post-termination period in
accordance with their terms and any remaining unvested stock
options and RSUs
48
would vest to the extent provided under the terms of his
employment agreement and applicable award agreement. Under the
terms of his employment agreement and equity award agreements,
because he is over the age of 55 with 10 years of service
with the Company or its affiliates, all of his unvested TWC and
Time Warner stock options and RSUs would vest.
Retirement. Under the agreements governing
Time Warner and TWC stock options and RSUs held by
Mr. Britt, because he is over the age of 55 with
10 years of service with the Company or its affiliates on
December 31, 2008, all of his unvested TWC and Time Warner
stock options, restricted stock and RSUs would vest upon his
retirement.
Change in Control. The agreements that govern
Mr. Britts TWC and Time Warner stock options
generally provide for accelerated vesting following a change in
control of TWC or Time Warner (as defined in the award
agreements), respectively, upon the earlier of (i) the
first anniversary of the change in control and (ii) the
termination of his employment other than for cause (as defined
in the option agreements) unless due to death or disability or
by Mr. Britt for good reason (as defined in the option
agreements). The terms of the agreements that govern Time Warner
and TWC RSU awards generally provide for accelerated vesting
following a change in control of the respective company upon the
earliest of (i) the first anniversary of the change in
control, (ii) the original vesting date with respect to
each portion of the award and (iii) the termination of the
participants employment other than for cause (as defined
in the RSU agreements) unless due to death or disability or by
the participant for good reason (as defined in the RSU
agreements). For purposes of the table below, it is assumed that
with respect to Mr. Britts Time Warner equity awards,
a change in control of TWC would result in a TWC Deconsolidation
but would not result in a change in control of Time Warner.
Under the TWC equity award agreements, however, not all of such
changes in ownership of TWC would be considered a change in
control of TWC. In particular, the Separation would not be
considered a change in control of TWC under the terms of the TWC
equity awards. For a discussion of the treatment of equity
awards in the event of TWC Deconsolidation under
Mr. Britts employment agreement, see
Change in Control above.
Assuming the trigger event causing any of the payments and other
benefits described above occurred on December 31, 2008, and
based on the NYSE closing price per share on December 31,
2008 of Class A common stock ($21.45) and Time Warner
Common Stock ($10.06), the dollar value of additional payments
and other benefits provided to Mr. Britt under his contract
are estimated to be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
|
|
|
Group Benefit
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
Bonus
|
|
|
Pro Rata
|
|
|
Plans
|
|
|
Stock-Based
|
|
|
|
|
|
|
Continuation
|
|
|
Continuation
|
|
|
Bonus
|
|
|
Continuation
|
|
|
Awards(2)
|
|
|
Other(3)
|
|
|
Termination without Cause
|
|
$
|
2,000,000
|
|
|
$
|
11,337,500
|
|
|
$
|
5,668,750
|
|
|
$
|
78,935
|
(1)
|
|
$
|
5,141,215
|
|
|
$
|
467,296
|
|
Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,141,215
|
|
|
|
|
|
Retirement
|
|
|
|
|
|
|
|
|
|
$
|
5,668,750
|
|
|
$
|
78,511
|
(4)
|
|
$
|
5,141,215
|
|
|
|
|
|
Disability
|
|
$
|
750,000
|
|
|
$
|
4,251,563
|
|
|
$
|
5,668,750
|
|
|
$
|
77,793
|
(5)
|
|
$
|
5,141,215
|
|
|
$
|
163,168
|
|
Death
|
|
|
|
|
|
|
|
|
|
$
|
5,668,750
|
|
|
|
|
|
|
$
|
5,141,215
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes $20,359 to cover the
estimated cost of continued health, life and disability
insurance for two years and $58,575, representing the present
value of a health insurance subsidy under the Time Warner Inc.
Retiree Medical Plan that Mr. Britt would receive
thereafter based on current plan rates equal to $10,376 per year
before he reaches the age of 65 and $4,404 per year thereafter.
|
|
(2)
|
|
Based on the excess of the closing
sale price of Class A common stock and Time Warner Common
Stock on December 31, 2008 over the exercise price for each
accelerated option, as applicable, and based on the closing sale
price of Class A common stock and Time Warner Common Stock
on December 31, 2008 in the case of accelerated TWC and
Time Warner RSUs. With respect to Time Warner equity awards, the
change-in-control
amount is based on the assumption that the change in control of
the Company results in a TWC Deconsolidation. If there were a
change in control of Time Warner that met the requirements of
the Time Warner equity award agreements (but was not a change in
control of TWC), the amount would be $338,066. See the
Outstanding Equity Awards at December 31, 2008 Table for
additional information as of December 31, 2008.
|
|
(3)
|
|
Includes a car allowance of $24,000
annually for two years (one year in the event of disability),
financial planning reimbursement of up to $100,000 annually for
two years (one year in the event of disability), payments of
$39,168 for two years (one year in the event of disability)
corresponding to two times the premium cost of $4,000,000 of
life insurance coverage under the Companys GUL insurance
program, and, other than in the case of disability, office space
and secretarial support each for one year after termination at a
cost of $80,960 and $60,000, respectively.
|
49
|
|
|
(4)
|
|
Represents the present value of a
health insurance subsidy from Time Warner under the Time Warner
Inc. Retiree Medical Plan to which Mr. Britt is entitled
upon retirement based on current plan rates of $10,376 per year
before he reaches the age of 65 and $4,404 per year after
turning 65 years old.
|
|
(5)
|
|
Includes $9,786 to cover the
estimated cost of continued health, life and disability
insurance for one year and $68,008, representing the present
value of a health insurance subsidy under the Time Warner Inc.
Retiree Medical Plan that Mr. Britt would receive
thereafter based on current plan rates equal to $10,376 per year
before he reaches the age of 65 and $4,404 per year thereafter.
|
Robert
D. Marcus
Termination without Cause/Company Material
Breach. Under his employment agreement,
Mr. Marcus is entitled to certain payments and benefits
upon a termination without cause, which includes the
Companys termination of his employment under the
employment agreement without cause or his
termination of such employment due to the Companys
material breach. For this purpose, cause has the
same meaning as in Mr. Britts employment agreement,
which is described above. A material breach includes the
Companys failure to cause a successor to assume the
Companys obligations under the agreement; Mr. Marcus
not being employed as the Companys Senior Executive Vice
President with authority, functions, duties and powers
consistent with that position; Mr. Marcus not reporting to
the CEO; and Mr. Marcus principal place of employment
being anywhere other than the greater Stamford, Connecticut area
or other location of the Companys principal corporate
offices in the New York metropolitan area.
In the event of a termination without cause,
Mr. Marcus is entitled to the following payments and
benefits:
|
|
|
|
|
any earned but unpaid base salary;
|
|
|
|
a pro-rata portion of his average annual bonus,
calculated and paid in the same manner as under
Mr. Britts employment agreement;
|
|
|
|
until 24 months after termination (and Mr. Marcus will
continue to be treated as an employee of the Company during this
period), continued payment by the Company of
Mr. Marcus base salary (paid on the Companys
normal payroll payment dates in effect immediately prior to
Mr. Marcus termination), his average annual bonus,
and the continuation of his benefits (except for additional
pension plan accrual and contributions to the TWC Savings Plan),
including financial services benefits but not including any
additional stock-based awards, unless Mr. Marcus dies
during such period, in which case these benefits will be
replaced with the death benefits described below; and
|
|
|
|
unless Mr. Marcus otherwise qualifies for retirement under
the applicable stock option, restricted stock, RSU or other
equity-based award agreement, (a) all stock options granted
to Mr. Marcus by Time Warner or the Company that would have
vested on or before the date when the salary and bonus
continuation payments described above would otherwise cease,
will vest immediately on the date Mr. Marcus ceases to be
considered an employee of the Company and all of such stock
options, together with previously vested stock options, will
remain exercisable for three years after Mr. Marcus ceases
to be considered an employee of the Company (but not beyond the
original term of the options), (b) any unvested awards of
Time Warner or the Companys restricted stock, RSUs or
other equity-based award that would have vested on or before the
date when the salary and bonus continuation payments described
above would otherwise cease, will vest immediately and
(c) any grants of long-term cash compensation which would
vest as of the date when the salary and bonus continuation
payments described above would otherwise cease, will vest
immediately and be paid on the dates on which such long-term
cash compensation is ordinarily scheduled to be paid (with the
awards in (b) and (c) above being deemed for this
purpose to vest pro rata over the applicable vesting period).
|
Conditions and Obligations Applicable to Receipt of Payments
and Benefits. Mr. Marcus right to
receive these payments and benefits upon a termination
without cause is conditioned on his execution of a release
of claims against the Company no later than 60 days after
Mr. Marcus separation of service from the Company. If
Mr. Marcus does not execute a release of claims, he will
receive a severance payment determined
50
in accordance with the Companys policies relating to
notice and severance. The payments may also be delayed to the
extent the Company deems it necessary for compliance with
Section 409A of the Internal Revenue Code, governing
nonqualified deferred compensation.
Change in Control. Under his employment
agreement, Mr. Marcus is entitled to certain payments and
benefits in the event of a TWC Deconsolidation. Upon such a
transaction, unless Mr. Marcus otherwise qualifies for
retirement under the applicable stock option, restricted stock,
RSU or other equity-based award agreement, (a) all stock
options granted to Mr. Marcus by Time Warner that would
have vested on or before the date when the salary and bonus
continuation payments described above would otherwise cease,
will vest immediately on the date the transaction closes and
will remain exercisable for three years (but not beyond the
original term of the options), and (b) any unvested awards
of Time Warner RSUs or other equity-based award that would have
vested on or before the date when the salary and bonus
continuation payments described above would otherwise cease,
will vest immediately on the date the transaction closes.
Disability. Under his employment agreement,
Mr. Marcus is entitled to payments and benefits if he
becomes disabled and has not resumed his duties after six
consecutive months or an aggregate of six months in any
12-month
period. In such event, the Company will pay him a pro-rata bonus
for the year in which the disability occurs (which will be
calculated based on his average annual bonus). In addition,
through the later of the end of his contract term or
24 months following the date the disability occurs,
Mr. Marcus will continue to be treated as an employee of
the Company, and the Company will pay Mr. Marcus disability
benefits equal to 75% of his annual base salary and average
annual bonus, and he will continue to be eligible to participate
in the Companys benefit plans (other than equity-based
plans, additional pension plan accrual and contributions to the
TWC Savings Plan) and to receive his other benefits (including
financial services). The Company may generally deduct from these
payments amounts equal to disability payments received by
Mr. Marcus during this payment period from Workers
Compensation, Social Security and the Companys disability
insurance policies.
Death. Under his employment agreement, if
Mr. Marcus dies, the employment agreement and all of the
Companys obligations to make any payments under the
agreement will terminate, except that Mr. Marcus
estate or designated beneficiary will be entitled to receive:
(a) his salary to the last day of the month in which his
death occurred and (b) bonus compensation, at the time
bonuses are normally paid, based on his average annual bonus but
pro-rated according to the number of whole or partial months he
was employed by the Company in the calendar year.
For Cause. Under Mr. Marcus
employment agreement, if the Company terminates his employment
for cause (as defined above), it would have no further
obligations to Mr. Marcus other than (a) to pay his
base salary through the effective date of termination,
(b) to pay any bonus for any year prior to the year in
which such termination occurs that has been determined but not
yet paid as of the date of such termination, and (c) to
satisfy any rights Mr. Marcus has pursuant to any insurance
or other benefit plans or arrangements.
See Pension Plans for a description of
Mr. Marcus entitlements under the Companys
pension plans and Time Warners pension plans. See
Nonqualified Deferred Compensation for a
description of Mr. Marcus entitlements under
nonqualified deferred compensation plans in which he
participates. Mr. Marcus was not retirement-eligible on
December 31, 2008 for the purposes of any retirement plan
or equity awards.
Certain Restrictive
Covenants. Mr. Marcus employment
agreement provides that he is subject to restrictive covenants
that obligate him, among other things: (a) not to disclose
any of the Companys confidential matters, (b) not to
solicit certain of the Companys employees for one year
following termination of employment for cause or without cause;
and (c) not to compete with the Companys business
during his employment and until the date Mr. Marcus ceases
to be considered an employee and 12 months after the
effective date of any termination of the term of employment for
cause or without cause.
Equity Awards: Stock Options and Restricted Stock
Units. Unless a more favorable outcome is
specified in Mr. Marcus employment agreement, the
terms of his equity award agreements govern his entitlements
under those awards in the event of a termination of employment
with or without cause, retirement or a change in control. In the
event of a termination without cause or a TWC or Time Warner
change in
51
control, under the award agreements, Mr. Marcus Time
Warner and TWC unvested stock options and RSUs would be treated
in the same fashion as Mr. Britts, described under
Glenn A. BrittEquity Awards: Stock Options and
Restricted Stock Units, except that he is not eligible to
retire. For a discussion of the treatment of his equity awards
in the event of a TWC Deconsolidation under
Mr. Marcus employment agreement, see
Change in Control above.
Assuming the trigger event causing any of the payments and other
benefits described above occurred on December 31, 2008, and
based on the NYSE closing price per share on December 31,
2008 of Class A common stock ($21.45) and Time Warner
Common Stock ($10.06), the dollar value of additional payments
and other benefits provided to Mr. Marcus under his
contract are estimated to be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
|
|
|
Group Benefit
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
Bonus
|
|
|
Pro Rata
|
|
|
Plans
|
|
|
Stock-Based
|
|
|
|
|
|
|
Continuation
|
|
|
Continuation
|
|
|
Bonus
|
|
|
Continuation(1)
|
|
|
Awards(2)
|
|
|
Other(3)
|
|
|
Termination without Cause
|
|
$
|
1,600,000
|
|
|
$
|
2,468,250
|
|
|
$
|
1,234,125
|
|
|
$
|
29,960
|
|
|
$
|
1,028,765
|
|
|
$
|
55,568
|
|
Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,455,148
|
|
|
|
|
|
Disability
|
|
$
|
1,200,000
|
|
|
$
|
1,851,188
|
|
|
$
|
1,234,125
|
|
|
$
|
29,960
|
|
|
$
|
1,455,148
|
|
|
$
|
55,568
|
|
Death
|
|
|
|
|
|
|
|
|
|
$
|
1,234,125
|
|
|
|
|
|
|
$
|
1,455,148
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes the estimated cost of
continued health, life and disability insurance.
|
|
(2)
|
|
Based on the excess of the closing
sale price of Class A common stock and Time Warner Common
Stock on December 31, 2008 over the exercise price for each
accelerated option, as applicable, and based on the closing sale
price of Class A common stock and Time Warner Common Stock
on December 31, 2008 in the case of accelerated RSUs. With
respect to Time Warner equity awards, the
change-in-control
amount is based on the assumption that the change in control of
the Company results in a TWC Deconsolidation. If there were a
change in control of Time Warner that met the requirements of
the Time Warner equity award agreements (but was not a change in
control of TWC), the amount would be $207,166. See the
Outstanding Equity Awards at December 31, 2008 Table for
additional information as of December 31, 2008.
|
|
(3)
|
|
Includes financial planning
reimbursement of up to $25,000 annually and an annual payment of
$2,592 for 2009 and $2,976 for 2010 corresponding to two times
the premium cost of $2,000,000 of life insurance coverage under
the Companys GUL insurance program.
|
Landel
C. Hobbs
Termination without Cause/Company Material
Breach. Under his employment agreement in effect
on December 31, 2008, Mr. Hobbs is entitled to certain
payments and benefits upon a termination without
cause, which includes the Companys termination of
his employment under the employment agreement without
cause or his termination of such employment due to
the Companys material breach. For this purpose,
cause has the same meaning as in
Mr. Britts employment agreement, which is described
above. A material breach includes the Companys failure to
cause a successor to assume the Companys obligations under
the agreement; Mr. Hobbs not being employed as the
Companys Chief Operating Officer with authority,
functions, duties and powers consistent with that position;
Mr. Hobbs not reporting to the CEO; and
Mr. Hobbs principal place of employment being
anywhere other than New York, New York.
In the event of a termination without cause,
Mr. Hobbs is entitled to the following payments and
benefits:
|
|
|
|
|
any earned but unpaid base salary;
|
|
|
|
a pro-rata portion of his average annual bonus,
calculated and paid in the same manner as under
Mr. Britts employment agreement;
|
|
|
|
until the later of January 31, 2011 (the term of his
employment agreement) or 24 months after termination (and
Mr. Hobbs will continue to be treated as an employee of the
Company during this period), continued payment by the Company of
Mr. Hobbs base salary (paid on the Companys
normal payroll payment dates in effect immediately prior to
Mr. Hobbs termination), his average annual bonus, and
the continuation of his benefits (except for additional pension
plan accrual and contributions to the TWC Savings Plan), but not
including any additional stock-based awards, unless
Mr. Hobbs dies during such period, in which case these
benefits will be replaced with the death benefits described
below; and
|
52
|
|
|
|
|
unless Mr. Hobbs otherwise qualifies for retirement under
the applicable stock option, RSU or other equity-based award
agreement, (a) all stock options granted to Mr. Hobbs
by the Company that would have vested on or before the date when
the salary and bonus continuation payments described above would
otherwise cease, will vest immediately on the date
Mr. Hobbs ceases to be considered an employee of the
Company and will remain exercisable for three years after
Mr. Hobbs ceases to be considered an employee of the
Company (but not beyond the original term of the options),
(b) any unvested awards of the Companys restricted
stock, RSUs or other equity-based award that would have vested
on or before the date when the salary and bonus continuation
payments described above would otherwise cease, will vest
immediately and (c) any grants of long-term cash
compensation which would vest as of the date when the salary and
bonus continuation payments described above would otherwise
cease, will vest immediately and be paid on the dates on which
such long-term cash compensation is ordinarily scheduled to be
paid (with the awards in (b) and (c) above being
deemed for this purpose to vest pro rata over the applicable
vesting period).
|
Conditions and Obligations Applicable to Receipt of Payments
and Benefits. Mr. Hobbs right to
receive these payments and benefits upon a termination
without cause is conditioned on his execution of a release
of claims against the Company no later than 60 days after
Mr. Hobbs separation of service from the Company. If
Mr. Hobbs does not execute a release of claims, he will
receive a severance payment determined in accordance with the
Companys policies relating to notice and severance.
Disability, Death and Termination for
Cause. The Companys obligations to
Mr. Hobbs in the event of his disability, death or
termination by the Company for cause (as defined above) are the
same as the Companys obligations to Mr. Marcus, which
are described above, except that in the event of disability,
Mr. Hobbs will continue to be considered an employee of the
Company through the later of the end of his contract term or
12 months following the date the disability occurs.
See Pension Plans for a description of
Mr. Hobbs entitlements under the Companys
pension plans. See Nonqualified Deferred
Compensation for a description of Mr. Hobbs
entitlements under nonqualified deferred compensation plans in
which he participates. Mr. Hobbs was not
retirement-eligible on December 31, 2008 for the purposes
of any retirement plan or equity awards.
Certain Restrictive
Covenants. Mr. Hobbs employment
agreement provides that he is subject to restrictive covenants
that obligate him, among other things: (a) not to disclose
any of the Companys confidential matters, (b) not to
hire certain of the Companys employees for one year
following termination of employment for cause or without cause;
and (c) not to compete with the Companys business
during his employment and until the latest of January 31,
2011, the date Mr. Hobbs ceases to be considered an
employee and 12 months after the effective date of any
termination of the term of employment for cause or without cause.
Equity Awards: Stock Options and Restricted Stock
Units. Unless a more favorable outcome is
specified in Mr. Hobbs employment agreement, the
terms of his equity award agreements govern his entitlements
under those awards in the event of a termination of employment
with or without cause, retirement or a change in control. In the
event of a termination without cause or a TWC or Time Warner
change in control, under the award agreements,
Mr. Hobbs Time Warner and TWC unvested stock options
and RSUs would be treated in the same fashion as
Mr. Britts, described under Glenn A.
BrittEquity Awards: Stock Options and Restricted Stock
Units, except that he is not eligible to retire.
Mr. Hobbs employment agreement does not contain
special provisions related to the treatment of his equity awards
in the event of a change in control.
53
Assuming the trigger event causing any of the payments and other
benefits described above occurred on December 31, 2008, and
based on the NYSE closing price per share on December 31,
2008 of TWC Class A common stock ($21.45) and Time Warner
Common Stock ($10.06), the dollar value of additional payments
and other benefits provided to Mr. Hobbs under his contract
are estimated to be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
|
|
|
Group Benefit
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
Bonus
|
|
|
Pro Rata
|
|
|
Plans
|
|
|
Stock-Based
|
|
|
|
|
|
|
Continuation
|
|
|
Continuation
|
|
|
Bonus
|
|
|
Continuation(1)
|
|
|
Awards(2)
|
|
|
Other(3)
|
|
|
Termination without Cause
|
|
$
|
1,875,000
|
|
|
$
|
4,259,767
|
|
|
$
|
2,044,688
|
|
|
$
|
31,367
|
|
|
$
|
1,828,866
|
|
|
$
|
124,650
|
|
Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,300,423
|
|
|
|
|
|
Disability
|
|
$
|
1,406,250
|
|
|
$
|
3,194,825
|
|
|
$
|
2,044,688
|
|
|
$
|
31,367
|
|
|
$
|
2,489,933
|
|
|
$
|
124,650
|
|
Death
|
|
|
|
|
|
|
|
|
|
$
|
2,044,688
|
|
|
|
|
|
|
$
|
2,489,933
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes the estimated cost of
continued health, life and disability insurance.
|
|
(2)
|
|
Based on the excess of the closing
sale price of Class A common stock and Time Warner Common
Stock on December 31, 2008 over the exercise price for each
accelerated option, as applicable, and based on the closing sale
price of Class A common stock and Time Warner Common Stock
on December 31, 2008 in the case of accelerated RSUs. With
respect to Time Warner equity awards, the
change-in-control
amount is based on the assumption that the change in control of
the Company results in a TWC Deconsolidation. If there were
a change in control of Time Warner that met the requirements of
the Time Warner equity award agreements (but was not a change in
control of TWC), the amount would be $324,234. See the
Outstanding Equity Awards at December 31, 2008 Table for
additional information as of December 31, 2008.
|
|
(3)
|
|
Includes financial planning
reimbursement of up to $40,000 annually and payments of $2,232
annually, corresponding to two times the premium cost of
$1,500,000 of life insurance coverage under the Companys
GUL insurance program.
|
Michael
LaJoie
Termination without Cause/Company Material
Breach. Under his employment agreement,
Mr. LaJoie is entitled to certain payments and benefits
upon the Companys termination of his employment under the
employment agreement without cause or his
termination of such employment due to the Companys
material breach. For this purpose, cause means a
felony conviction; willful refusal to perform his obligations;
material breach of specified covenants, including restrictive
covenants relating to confidentiality, noncompetition and
nonsolicitation; or willful misconduct that has a substantial
adverse effect on the Company. A material breach includes
Mr. LaJoie not being employed as the Companys
Executive Vice President and Chief Technology Officer, with
authority, functions, duties and powers consistent with that
position, or certain changes in Mr. LaJoies reporting
line. If the Company terminates Mr. LaJoies
employment without cause, if the Company fails to renew his
agreement or if Mr. LaJoie terminates his employment due to
the Companys material breach of his agreement, he will
receive the benefits due under any of the Companys benefit
plans, and he will be placed on a leave of absence as an
inactive employee for up to 30 months during which he will
continue to receive his annual base salary and annual bonuses
equal to the greater of the average of (a) his two most
recent annual bonuses and (b) his then applicable annual
target bonus; and while on leave he will continue to receive
employee benefits (other than stock-based awards, additional
pension plan accrual and contributions to the TWC Savings Plan).
Mr. LaJoie will also be entitled to executive level
outplacement services for up to one year following his
termination of employment.
Retirement Option. Under
Mr. LaJoies employment agreement, because
Mr. LaJoie has worked for the Company at the senior
executive level for more than five years, if he is employed by
the Company when he is 55 years of age, he may elect a
retirement option. Mr. LaJoie is not currently eligible to
receive this benefit. The retirement option would require
Mr. LaJoie to remain actively employed by the Company for a
transition period of six months to one year following this
election (as negotiated by the parties). During this transition
period, Mr. LaJoie will remain actively employed and will
continue to receive his current annual salary and bonus
(calculated in the same manner as bonus is computed above for
severance purposes). Following the transition period,
Mr. LaJoie would become an advisor to the Company for three
years during which he will be paid his annual base salary and he
will also receive his full bonus for the first year, a 50% bonus
for the second year and no bonus for the third year. As an
advisor, he will not be required to devote more than 5 days
per month to such services. Mr. LaJoie would continue
vesting in any outstanding stock options and long-term
54
cash incentives during this period, continue participation in
benefit plans (except for additional pension plan accrual and
contributions to the TWC Savings Plan) and group insurance
plans, and receive reimbursement for financial and estate
planning expenses and $10,000 for office space expenses.
If Mr. LaJoie attains age 65 by the end of the term of
his employment agreement, the Company will not be obligated to
renew the agreement, and Mr. LaJoie will not be entitled to
severance as a result of the Companys
non-renewal
in such event.
Conditions and Obligations Applicable to Receipt of Payments
and Benefits. Mr. LaJoies right to
receive these payments and benefits upon a termination without
cause, a termination due to a material breach or under the
retirement option, is conditioned on his execution of a release
of claims against the Company. If Mr. LaJoie does not
execute a release of claims, he will receive a severance payment
determined in accordance with the Companys policies
relating to notice and severance. Mr. LaJoie is required to
engage in any mitigation necessary to preserve the
Companys tax deduction in respect of the payments
described above and avoid applicability of the golden
parachute excise taxes and related lost corporate tax
deduction.
Disability. Under his employment agreement, if
Mr. LaJoie becomes disabled and cannot perform his duties
for 26 consecutive weeks, his employment may be terminated, and
he will receive, in addition to earned and unpaid base salary
through termination, an amount equal to 2.5 times his annual
base salary and the greater of the average of his two most
recent annual bonuses or his then applicable annual target bonus
amount.
Death. If Mr. LaJoie dies prior to the
termination of his employment agreement, his estate or
beneficiaries will receive life insurance payments equal to
30 months of his annual salary and the greater of his
average annual bonus multiplied by 2.5, or his then applicable
target bonus multiplied by 2.5.
For Cause. Under Mr. LaJoies
employment agreement, the Companys obligations to
Mr. LaJoie in the event of his termination for cause (as
defined in the agreement) are the same as the Companys
obligations to Mr. Marcus.
See Pension Plans for a description of
Mr. LaJoies entitlements under the Companys
pension plans and Time Warners pension plans.
Certain Restrictive
Covenants. Mr. LaJoies employment
agreement provides that he is subject to restrictive covenants
that obligate him, among other things: (1) not to disclose
any of the Companys confidential matters, (2) not to
solicit certain of the Companys employees for one year
following termination of employment; and (3) not to compete
with the Companys business during his employment and for
one year following termination of employment.
Equity Awards: Stock Options and Restricted Stock
Units. Unless a more favorable outcome is
specified in Mr. LaJoies employment agreement, the
terms of his equity award agreements govern his entitlements
under those awards in the event of a termination of employment
with or without cause, retirement or a change in control. In the
event of a termination without cause or a TWC or Time Warner
change in control, under the award agreements,
Mr. LaJoies Time Warner and TWC unvested stock
options and RSUs would be treated in the same fashion as
Mr. Britts, described under Glenn A.
BrittEquity Awards: Stock Options and Restricted Stock
Units, except that Mr. LaJoie was not eligible to
retire on December 31, 2008, but will become
retirement-eligible under the terms of his awards during 2009.
55
Assuming the trigger event causing any of the payments and other
benefits described above occurred on December 31, 2008, and
based on the NYSE closing price per share on December 31,
2008 of Class A common stock ($21.45) and Time Warner
Common Stock ($10.06), the dollar value of additional payments
and other benefits provided Mr. LaJoie under his contract
are estimated to be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
|
|
|
Group Benefit
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
Bonus
|
|
|
Pro Rata
|
|
|
Plans
|
|
|
Stock-Based
|
|
|
|
|
|
|
Continuation
|
|
|
Continuation
|
|
|
Bonus
|
|
|
Continuation(1)
|
|
|
Awards(2)
|
|
|
Other(3)
|
|
|
Termination without Cause
|
|
$
|
1,312,500
|
|
|
$
|
1,504,275
|
|
|
$
|
525,000
|
|
|
$
|
31,777
|
|
|
$
|
780,205
|
|
|
$
|
25,642
|
|
Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
738,758
|
|
|
|
|
|
Disability
|
|
$
|
1,312,500
|
|
|
$
|
1,504,275
|
|
|
$
|
525,000
|
|
|
|
|
|
|
$
|
780,205
|
|
|
|
|
|
Death
|
|
|
|
|
|
|
|
|
|
$
|
525,000
|
|
|
|
|
|
|
$
|
780,205
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes the estimated cost of
continued health, life and disability insurance for
30 months.
|
|
(2)
|
|
Based on the excess of the closing
sale price of Class A common stock and Time Warner Common
Stock on December 31, 2008 over the exercise price for each
accelerated option, as applicable, and based on the closing sale
price of Class A common stock and Time Warner Common Stock
on December 31, 2008 in the case of accelerated RSUs. With
respect to Time Warner equity awards, the
change-in-control
amount is based on the assumption that the change in control of
the Company results in a TWC Deconsolidation. If there were a
change in control of Time Warner that met the requirements of
the Time Warner equity award agreements (but was not a change in
control of TWC), the amount would be $78,468. See the
Outstanding Equity Awards at December 31, 2008 Table for
additional information as of December 31, 2008.
|
|
(3)
|
|
Includes financial planning
reimbursement of up to $3,000 annually for 30 months,
$12,000 in the aggregate for outplacement services and life
insurance coverage at an aggregate cost of $4,642.
|
Carl
U.J. Rossetti
Termination without Cause (other than Change in
Control). Under his employment agreement,
Mr. Rossetti is entitled to certain payments and benefits
upon the termination of employment under his employment
agreement without cause, other than within three
years following a change of control of the Company, as defined
in his employment agreement. For this purpose, cause
generally means the commission of acts resulting in material
financial loss or substantial embarrassment to the Company, or
the conviction of a felony. Upon such a termination,
Mr. Rossetti is entitled to be placed on a leave of absence
as an inactive employee for up to three years during which he
will continue to receive his annual base salary and annual
bonuses equal to the greater of the average of (a) his two
most recent annual bonuses and (b) his then applicable
annual target bonus. While on leave, he will continue to receive
employee benefits (other than stock-based awards, additional
pension plan accrual and contributions to the TWC Savings Plan).
Mr. Rossetti will also be entitled to use office space,
secretarial services and other office facilities for up to one
year following his termination of employment and reimbursement
for financial and tax counseling services.
Termination following a Change in Control of Time
Warner. If, within three years following a
change in control of Time Warner, the Company
(a) changes specified terms of Mr. Rossettis
employment, including the Companys failure to cause a
successor to assume the Companys obligations under the
agreement; a material reduction in Mr. Rossettis
responsibilities; Mr. Rossetti not reporting to the CEO; a
reduction in Mr. Rossettis aggregate cash
compensation of more than 10% below his highest aggregate cash
compensation paid in any preceding calendar year or a reduction
in Mr. Rossettis aggregate benefits under the
benefits plans and incentive plans in any calendar year by more
than 10% of the highest value granted; Mr. Rossettis
place of employment being more than 50 miles from Stamford,
Connecticut or New York, New York, (b) materially breaches
Mr. Rossettis employment agreement, or
(c) terminates Mr. Rossettis employment without
cause, then Mr. Rossetti will have the right to receive:
|
|
|
|
|
a lump-sum payment of three times his annual base salary plus
the greater of the average of (a) his two most recent
annual bonuses received immediately prior to termination or
prior to the change in control, whichever is greater, or
(b) his then applicable annual target bonus, or his annual
target bonus immediately prior to the change in control,
whichever is greater;
|
56
|
|
|
|
|
a lump-sum payment in an amount equal to the projected
additional pension benefit he would have accrued (plus the
projected additional employer matching contributions that would
have been made to his account under the TWC Savings Plan) had he
remained employed during the three years following his
termination, assuming for such purpose he was fully vested, his
compensation for such three years was the amount of the lump-sum
payment in the preceding bullet, and taking into account any
applicable early retirement subsidies and his actual age at the
end of the three-year period;
|
|
|
|
free medical (including hospitalization) and dental coverage,
substantially identical to what he was entitled to at the time
of his termination, for three years following his termination;
|
|
|
|
use of office space, secretarial services and other office
facilities for up to one year following his termination of
employment; and
|
|
|
|
reimbursement of fees and expenses up to $10,000 for financial
and tax counseling services.
|
As a result of the Separation, this provision of
Mr. Rossettis agreement is no longer operative.
Retirement Option. Under
Mr. Rossettis employment agreement, because
Mr. Rossetti is over 55 years of age and has worked
for the Company at the senior executive level for more than five
years, he may elect a retirement option.
Mr. Rossettis retirement option has the same terms as
that for Mr. LaJoie described above. As of the date of this
Proxy Statement, Mr. Rossetti has not exercised the
retirement option under his employment agreement.
Conditions and Obligations Applicable to Receipt of Payments
and Benefits. Mr. Rossettis right to
receive these payments and benefits upon a termination without
cause, a termination due to a material breach or under the
retirement option, is conditioned on his execution of a release
of claims against the Company no later than 60 days after
Mr. Rossettis separation of service from the Company.
If Mr. Rossetti does not execute a release of claims, he
will receive a severance payment determined in accordance with
the Companys policies relating to notice and severance.
Mr. Rossetti is required to engage in any mitigation
necessary to preserve the Companys tax deduction in
respect of the payments described above and avoid applicability
of the golden parachute excise taxes and related
lost corporate tax deduction.
Disability. Under his employment agreement, if
Mr. Rossetti becomes disabled and cannot perform his duties
for 26 consecutive weeks, his employment may be terminated, and
he will receive, in addition to earned and unpaid base salary
through termination, an amount equal to three times his annual
base salary and then applicable annual target bonus amount.
Death. If Mr. Rossetti dies prior to the
termination of his employment agreement, his estate or
beneficiaries will receive Company life insurance payments equal
to three times his (a) base salary and (b) the greater
of the average of his two most recent annual bonuses or his then
applicable target annual bonus amount.
For Cause. Under Mr. Rossettis
employment agreement, if the Company terminates his employment
with cause, it will have no further obligations to
Mr. Rossetti other than (a) to pay his base salary
through the effective date of termination and (b) to
satisfy any rights Mr. Rossetti has pursuant to any
insurance or other benefit plans or arrangements.
See Pension Plans for a description of
Mr. Rossettis entitlements under the Companys
pension plans.
Certain Restrictive
Covenants. Mr. Rossettis employment
agreement provides that he is subject to restrictive covenants
that obligate him, among other things: (1) not to disclose
any of the Companys confidential matters, (2) not to
solicit certain of the Companys employees for one year
following termination of employment; and (3) not to compete
with the Companys business during his employment and for
one year following termination of employment.
Equity Awards: Stock Options and Restricted Stock
Units. Unless a more favorable outcome is
specified in Mr. Rossettis employment agreement, the
terms of his equity award agreements govern his entitlements
under those awards in the event of a termination of employment
with or without cause, retirement
57
or a change in control. In the event of a termination without
cause or a TWC or Time Warner change in control, under the award
agreements, Mr. Rossettis Time Warner and TWC
unvested stock options and RSUs would be treated in the same
fashion as Mr. Britts, described under
Glenn A. BrittEquity Awards: Stock
Options and Restricted Stock Units, because he meets the
age and service requirements for retirement under the terms of
his awards.
Assuming the trigger event causing any of the payments and other
benefits described above occurred on December 31, 2008, and
based on the NYSE closing price per share on December 31,
2008 of Class A common stock ($21.45) and Time Warner
Common Stock ($10.06), the dollar value of additional payments
and other benefits provided to Mr. Rossetti under his
contract are estimated to be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
|
|
|
Group Benefit
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
Bonus
|
|
|
Pro Rata
|
|
|
Plans
|
|
|
Stock-Based
|
|
|
|
|
|
|
Continuation
|
|
|
Continuation
|
|
|
Bonus
|
|
|
Continuation(1)
|
|
|
Awards(2)
|
|
|
Other(3)
|
|
|
Termination without Cause(4)
|
|
$
|
1,500,000
|
|
|
$
|
1,574,250
|
|
|
$
|
500,000
|
|
|
$
|
53,367
|
|
|
$
|
689,604
|
|
|
$
|
137,146
|
|
Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
689,604
|
|
|
|
|
|
Retirement
|
|
$
|
1,750,500
|
|
|
$
|
1,066,006
|
|
|
$
|
500,000
|
|
|
$
|
63,622
|
|
|
$
|
689,604
|
|
|
$
|
30,395
|
|
Disability
|
|
$
|
1,500,000
|
|
|
$
|
1,500,000
|
|
|
$
|
500,000
|
|
|
|
|
|
|
$
|
689,604
|
|
|
|
|
|
Death
|
|
|
|
|
|
|
|
|
|
$
|
500,000
|
|
|
|
|
|
|
$
|
689,604
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes the estimated cost of
continued health, life and disability insurance.
|
|
(2)
|
|
Based on the excess of the closing
sale price of Class A common stock and Time Warner Common
Stock on December 31, 2008 over the exercise price for each
accelerated option, as applicable, and based on the closing sale
price of Class A common stock and Time Warner Common Stock
on December 31, 2008 in the case of accelerated RSUs. With
respect to Time Warner equity awards, the
change-in-control
amount is based on the assumption that the change in control of
the Company results in a TWC Deconsolidation. If there were a
change in control of Time Warner that met the requirements of
the Time Warner equity award agreements (but was not a change in
control of TWC), the amount would be $70,621. See the
Outstanding Equity Awards at December 31, 2008 Table for
additional information as of December 31, 2008.
|
|
(3)
|
|
In the event of termination without
cause, the amount reflects financial planning reimbursement of
up to $3,000 and supplemental life insurance coverage at an
annual cost of $2,351 for 2009 and $2,418 for each of 2010 and
2011 and office space and secretarial support each for one year
after termination at a cost of $80,960 and $40,000,
respectively. In the event of retirement, the amount reflects
financial planning reimbursement of up to $3,000 and
supplemental life insurance coverage each for four years and a
payment of $10,000 for office space.
|
|
(4)
|
|
In the event that
Mr. Rossettis employment were terminated following a
change in control of Time Warner, Mr. Rossetti would be
entitled to a lump-sum payment equal to the amounts shown under
termination without cause except that he would be
entitled to (a) an annual bonus continuation amount of
$1,332,508, (b) a group benefits payment of $64,299 and
(c) a payment of $436,650 representing his potential
accrued pension benefit, TWC Savings Plan matching contribution
and supplemental life insurance coverage had there been no
change in control and payments for financial planning services,
secretarial support and office space.
|
Director
Compensation
The table below sets out the compensation for 2008 that was paid
to or earned by the Companys directors who were not active
employees of the Company or of Time Warner or its affiliates
(non-employee directors). Directors who are active
employees of Time Warner or its subsidiaries, including the
Company, are not separately compensated for their Board
activities.
The Company compensates non-employee directors with a
combination of equity and cash that it believes is comparable to
and consistent with approximately the median compensation
provided to independent directors of similarly sized public
entities. During 2008, each non-employee director received a
total annual director compensation package consisting of
(i) a cash retainer of $85,000 and (ii) an annual
equity award of full value stock units, in the form of RSUs,
valued at $115,000 representing the Companys unsecured
obligation to deliver the designated number of shares of
Class A common stock, generally after the Director ceases
his or her service as a director for any reason other than
cause. An additional annual cash retainer of $20,000 is paid to
the chair of the Audit Committee and $10,000 to each other
member of the Audit Committee and, an additional annual cash
retainer of $5,000 is paid to each member of the Compensation
and Nominating and Governance Committees, with $10,000 to the
chairs. The directors are entitled to receive dividend
equivalents on the RSUs, if any dividends are paid on the Common
Stock. In 2008, each non-employee director received 4,484 RSUs
under the TWC Stock Incentive Plan (prior to adjustment for the
Recapitalization, the Special Dividend retained distribution and
the March 2009 Reverse Stock Split).
58
In addition, the directors who served on the Special Committee
during 2008 received a cash payment of $75,000 and the chair
received $100,000 for such services. No additional compensation
is paid for attendance at meetings of the Board of Directors or
a Board committee.
Non-employee directors are reimbursed for out-of-pocket expenses
(including the costs of travel, food and lodging) incurred in
connection with attending Board, committee and stockholder
meetings. Travel to such meetings may include the use of
aircraft owned by the Company and (during 2008) owned
jointly with Time Warner and its other subsidiaries, if
available and appropriate under the circumstances. Directors are
also reimbursed for reasonable expenses associated with other
Company-related business activities, including participation in
director education programs.
As it does for its employees, the Company may provide its cable,
high-speed data
and/or
telephone service to directors who live in its service area
generally at no cost to the director. The Company believes that
providing this service serves a business purpose by expanding
the directors knowledge of the Companys business,
products and services. The Company may also invite directors and
their spouses to attend Company-related events. The Company
generally provides for, or reimburses expenses of, the
spouses travel, food and lodging for attendance at these
events to which directors spouses and guests have been
invited, which may result in a non-employee director recognizing
income for tax purposes under applicable regulations. The
Company reimburses the non-employee director for the estimated
taxes incurred in connection with any income recognized by the
director as a result of the non-employee directors or
spouses attendance at such events. In the year ended
December 31, 2008, the aggregate incremental cost to the
Company of these items was less than $10,000 per director. In
addition, in 2008, the Company offered to make a $500
contribution in the name of each director to a charity selected
by the director.
In general, for non-employee directors who join the Board after
the date on which the annual equity award to directors has been
made, the Companys policy is to make the stock unit grant
on a pro-rated basis shortly after election and to provide a
pro-rated cash retainer consistent with the compensation package
described above, subject to limitations that may exist under the
applicable equity plan.
Non-employee directors are given the opportunity to defer for
future distribution payment of their cash retainer. Deferred
payments of director fees are recorded as deferred units of the
Companys Common Stock under the Stock Incentive Plan (the
Directors Deferred Compensation Program).
Distributions of the account upon the selected deferral date
will be made in shares of the Companys Common Stock. The
directors are entitled to receive dividend equivalents on their
deferred stock units if dividends are paid on the Common Stock.
DIRECTOR
COMPENSATION FOR 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name
|
|
in Cash(1)
|
|
|
Awards(2)
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation(4)
|
|
|
Total
|
|
|
Jeffrey Bewkes(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carole Black
|
|
$
|
165,000
|
|
|
$
|
123,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,818
|
|
|
$
|
290,173
|
|
Thomas H. Castro
|
|
$
|
165,000
|
|
|
$
|
123,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
288,855
|
|
David C. Chang
|
|
$
|
175,000
|
|
|
$
|
123,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
298,855
|
|
James E. Copeland, Jr.
|
|
$
|
205,000
|
|
|
$
|
123,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,641
|
|
|
$
|
329,996
|
|
Peter R. Haje
|
|
$
|
173,805
|
|
|
$
|
123,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
297,660
|
|
Don Logan
|
|
$
|
95,000
|
|
|
$
|
123,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,409
|
|
|
$
|
219,764
|
|
Michael Lynne(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.J. Nicholas, Jr.
|
|
$
|
180,000
|
|
|
$
|
123,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
303,855
|
|
Wayne H. Pace
|
|
$
|
90,000
|
|
|
$
|
123,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
213,855
|
|
59
|
|
|
(1)
|
|
Amounts earned by each non-employee
director in 2008 represent (a) an annual cash retainer of
$85,000; (b) an annual additional payment of $10,000 for
each member of the Audit Committee (Messrs. Chang and
Nicholas), with $20,000 to its chair (Mr. Copeland) and
$5,000 for each member of the Compensation Committee
(Ms. Black and Messrs. Castro and Logan) and
Nominating and Governance Committee (Messrs. Chang, Haje,
Logan and Pace), with $10,000 to each Committees chair
(Mr. Haje (from March 2008) and Mr. Nicholas,
respectively); and (c) a cash payment of $75,000 for each
director who served on the Special Committee (Ms. Black and
Messrs. Castro, Chang, Haje and Nicholas) with $100,000 for
its chair (Mr. Copeland). Messrs. Chang, Copeland,
Haje, Nicholas and Pace elected to defer all or a portion of
their cash retainer under the Directors Deferred
Compensation Program and for 2008 received awards of deferred
stock units (in July 2008 and January 2009) covering, in the
aggregate, 2,830, 8,232, 3,516, 7,289, and 3,823 shares of
Class A common stock, respectively (prior to adjustment for
the Recapitalization, the Special Dividend retained distribution
and the Reverse Stock Split). The value of these deferred stock
units is included in this column. These deferrals and the
related deferred stock units are not reflected in a separate
column in the table.
|
|
(2)
|
|
The amounts set forth in the Stock
Awards column represent the value of the award to each
non-employee director of RSUs with respect to 4,484 shares
of Class A common stock recognized for financial statement
reporting purposes for 2008, as computed in accordance with
FAS 123R, disregarding estimates of forfeitures related to
service-based vesting conditions. The amounts were calculated
based on the grant date fair value per share of $27.51, which
was the closing sale price of Class A common stock on the
date of grant. On December 31, 2008, each non-employee
director held 7,049 RSUs, except for Mr. Pace, who held
4,484 RSUs (prior to adjustment for the Recapitalization and the
March 2009 Reverse Stock Split).
|
|
(3)
|
|
Mr. Lynne resigned effective
March 18, 2008 (at which time Mr. Haje became the
Chair of the Compensation Committee) and Mr. Bewkes
resigned effective March 12, 2009.
|
|
(4)
|
|
Reflects (a) the
Companys commitment to make a charitable contribution of
$500 to an organization selected by each director and
(b) reimbursement for estimated taxes incurred by
Ms. Black and Messrs. Copeland and Logan as a result
of a spouse or guest accompanying the director to a
Company-sponsored event in 2007.
|
Additional
Information
In connection with an administrative order dated March 21,
2005, Mr. Pace reached a settlement with the SEC pursuant
to which he agreed, without admitting or denying the SECs
allegations, to the entry of an administrative order that he
cease and desist from causing violations or future violations of
certain reporting provisions of the securities laws; however, he
is not subject to any suspension, bar or penalty.
Compensation
Committee Interlocks and Insider Participation
Mr. Logan was a member of the Compensation Committee during
2008. He served as Chairman of Time Warners Media and
Communications Group from July 31, 2002 until
December 31, 2005 and is currently a non-active employee of
Time Warner. Mr. Haje, a member of the Compensation
Committee, served as Executive Vice President and General
Counsel of TWE from June 1992 until 1999. Mr. Lynne, a
member of the Compensation Committee through March 2008, served
as Co-Chairman and Co-Executive Officer of New Line Cinema
Corporation, an affiliate of Time Warner.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Policy
and Procedures Governing Related Person Transactions
The Board has adopted the Time Warner Cable Inc. Policy and
Procedures Governing Related Person Transactions. This is a
written policy and set of procedures for the review and approval
or ratification of transactions involving related persons, which
consist of directors, director nominees, executive officers,
persons or entities known to the Company to be the beneficial
owner of more than five percent (5%) of any outstanding class of
the voting securities of the Company, or immediate family
members or certain affiliated entities of any of the foregoing
persons. Under authority delegated by the Board, the Nominating
and Governance Committee (or its Chair, under certain
circumstances) is responsible for applying the policy with the
assistance of the General Counsel or his designee (if any).
Transactions covered by the policy consist of any financial
transaction, arrangement or relationship or series of similar
transactions, arrangements or relationships, in which
(i) the aggregate amount involved will or may be expected
to exceed $100,000 in any calendar year; (ii) the Company
is, will or may be expected to be a participant; and
(iii) any related person has or will have a direct material
interest or an indirect material interest. Prior to the
Separation, the policy also included previously-disclosed
procedures for the approval of certain transactions between Time
Warner
60
and its affiliates, on the one hand, and the Company and its
subsidiaries, on the other hand. These procedures were also a
part of the Companys pre-Separation organizational
documents. In connection with the Separation, the Companys
organizational documents were amended to remove these procedures
and the Board similarly revised the policy.
In addition, the Companys Standards of Business Conduct
and Guidelines for Non-Employee Directors contain general
procedures for the approval of transactions between the Company
and its directors and executive officers and certain other
transactions involving the Companys directors and
executive officers. The Companys Standards of Business
Conduct and Guidelines for Non-Employee Directors are available
on its website.
Excluded
Transactions
In addition to the requirements described above for transactions
covered by the policy, the policy includes a list of categories
of transactions identified by the Board as having no significant
potential for an actual or the appearance of a conflict of
interest or improper benefit to a related person, and thus are
not subject to review by the Nominating and Governance
Committee. These excluded transactions consist of the following
types of transactions between the Company and a related person
or another entity with which the related person is affiliated:
|
|
|
|
|
Ordinary Course Transactions with Other
Entities. Transactions in the ordinary course of
business between the Company and another entity with which a
related person is affiliated unless (a) the related person
serves as an executive officer, employee, or beneficial owner of
an equity interest of 10% or more in the other entity and
(b) the transactions, in the aggregate, represent more than
5% of the Companys consolidated gross revenues for the
prior fiscal year or 2% of the other entitys gross revenue
for the prior fiscal year;
|
|
|
|
Charitable Contributions. Discretionary
charitable contributions by the Company to a non-profit entity
with which a related person is affiliated that would satisfy the
Companys categorical standards for determining that a
material relationship does not exist with an entity that would
impact a directors independence. See Criteria for
Membership on the BoardIndependence above;
|
|
|
|
Transactions with Significant
Stockholders. Transactions between the Company
and a corporation, firm or other entity known to the Company to
be the beneficial owner of more than 5% of any outstanding class
of the Companys voting securities (a Significant
Stockholder), if the transactions occur in the ordinary
course of business and are consistent with other transactions in
which the Company has engaged with third parties, unless the
transactions, in the aggregate, represent more than 5% of the
Companys consolidated gross revenues for the prior fiscal
year or 2% of the Significant Stockholders gross revenues
for the prior fiscal year;
|
|
|
|
Non-employee Position with Other Affiliated
Entities. Transactions where the related
persons interest in the transaction is based solely on his
or her position as (a) a non-employee director of the other
entity or (b) subject to the requirements relating to the
Companys charitable contributions as described above, a
non-employee director or trustee, or unpaid volunteer at a
non-profit organization;
|
|
|
|
Executive Compensation. Any compensation paid
to an executive officer of the Company if (a) the
compensation is required to be reported in the Companys
annual report on
Form 10-K
or proxy statement under the compensation disclosure
requirements of the SEC or (b)(i) the executive officer is not
an immediate family member otherwise covered by the
policy and the compensation would be reported in the
Companys annual report on
Form 10-K
or proxy statement if the executive officer was a named
executive officer (as defined under SEC rules) and
(ii) the Compensation Committee approved (or recommended
that the Board approve) such compensation;
|
|
|
|
Director Compensation. Any compensation paid
to a director of the Company if the compensation is required to
be reported in the Companys annual report on
Form 10-K
or proxy statement under the SECs compensation disclosure
requirements;
|
61
|
|
|
|
|
Transactions Where All Stockholders Receive Proportional
Benefits. Transactions in which all stockholders receive the
same benefits on a pro rata basis (e.g.,
dividends);
|
|
|
|
Transactions Involving Competitive Bids, Regulated
Transactions and Certain Banking-Related Services.
Transactions involving a related person where the rates or
charges involved are determined by competitive bids;
transactions with a related person involving the rendering of
services as a common carrier, or public utility, at rates or
charges fixed in conformity with law or governmental authority;
or transactions with a related person involving services as a
bank depositary of funds, transfer agent, registrar, trustee
under a trust indenture, or similar services; and
|
|
|
|
Other. Other categories of transactions that
may be identified by the Nominating and Governance Committee
from time to time as having no significant potential for an
actual, or the appearance of a, conflict of interest or improper
benefit to a related person.
|
Approval
Procedure
The General Counsel or his designee will assess whether any
proposed transaction involving a related person is a related
person transaction covered by the policy, and if so, the
transaction will be presented to the Nominating and Governance
Committee for review and consideration at its next meeting or,
in those instances in which the General Counsel or his designee
determines that it is not practicable or desirable for the
Company to wait until the next Committee meeting, to the Chair
of the Nominating and Governance Committee. If the General
Counsel or his designee potentially may be involved in a related
person transaction, the applicable person is required to inform
the Chief Executive Officer and the Chair of the Nominating and
Governance Committee. Related person transactions (other than
the excluded transactions) will be reviewed and be subject to
approval by the Nominating and Governance Committee. If
possible, the approval will be obtained before the Company
commences the transaction or enters into or amends any contract
relating to the transaction. If advance Committee approval of a
related person transaction is not feasible or not identified
prior to commencement of a transaction, then the transaction
will be considered and, if the Nominating and Governance
Committee determines it to be appropriate, ratified at the
Committees next regularly scheduled meeting.
In determining whether to approve or ratify a related person
transaction covered by the policy, the Nominating and Governance
Committee may take into account such factors it deems
appropriate, which may include:
|
|
|
|
|
the extent of the related persons interest in the
transaction;
|
|
|
|
whether the transaction would interfere with the objectivity and
independence of any related persons judgment or conduct in
fulfilling his or her duties and responsibilities to the Company;
|
|
|
|
whether the transaction is fair to the Company and on terms no
less favorable than terms generally available to an unaffiliated
third party under the same or similar circumstances;
|
|
|
|
whether the transaction is in the interest of the Company and
its stockholders; and
|
|
|
|
whether the transaction is consistent with any conflicts of
interest policies set forth in the Companys Standards of
Business Conduct and other policies.
|
A member of the Nominating and Governance Committee who
potentially is a related person in connection with a particular
proposed related person transaction will not participate in any
discussion or approval of the transaction, other than
discussions for the purpose of providing material information
concerning the transaction to the Committee.
Relationship
between the Company and Time Warner
Registration
Rights Agreement and Shareholder Agreement
Prior to the Separation, the Company and Time Warner were
parties to a registration rights agreement (the
Registration Rights Agreement), which the parties
entered into in March 2003, and a shareholder
62
agreement (the Shareholder Agreement), which the
parties entered into in April 2005. Both the Registration Rights
Agreement and the Shareholder Agreement terminated upon the
Separation.
Pursuant to the Registration Rights Agreement, Time Warner had
the right to require TWC to register the shares of Class A
common stock and Class B common stock that Time Warner
owned prior to the Separation. Under the Shareholder Agreement,
Time Warner had certain approval rights in connection with
TWCs ability to:
|
|
|
|
|
create, incur or guarantee certain indebtedness;
|
|
|
|
enter into any agreement that bound or purported to bind Time
Warner or its affiliates or that would subject TWC or its
subsidiaries to significant penalties or restrictions as a
result of any action or omission of Time Warner or its
affiliates; or
|
|
|
|
adopt a stockholder rights plan, become subject to
section 203 of the Delaware General Corporation Law, adopt
a fair price provision in TWCs certificate of
incorporation or take any similar action.
|
In addition, under the Shareholder Agreement, Time Warner agreed
that:
|
|
|
|
|
it would not make or announce a tender offer or exchange offer
for the Class A common stock without the approval of a
majority of TWCs Independent Directors prior to
August 1, 2009; and
|
|
|
|
it would not enter into any business combination with TWC,
including a short-form merger, without the approval of a
majority of TWCs Independent Directors prior to
August 1, 2016.
|
Furthermore, pursuant to the Shareholder Agreement, so long as
Time Warner had the power to elect a majority of TWCs
Board of Directors, Time Warner (and its subsidiaries) could
purchase debt securities issued by TWE only after giving TWC
certain notice, subject to TWCs right to give notice to
Time Warner that it intended to purchase such amount of TWE debt
securities itself.
Reimbursement
for Time Warner Equity Compensation
Prior to April 2007, from time to time, TWCs employees and
employees of its subsidiaries and joint ventures were granted
options to purchase shares of Time Warner Common Stock in
connection with their employment with subsidiaries and
affiliates of Time Warner. TWC and TWE agreed that, upon the
exercise by any of their officers or employees of any options to
purchase Time Warner Common Stock, TWC would reimburse Time
Warner in an amount equal to the excess of the closing price of
a share of Time Warner Common Stock on the date of the exercise
of the option over the aggregate exercise price paid by the
exercising officer or employee for each share of Time Warner
Common Stock. TWC accrues stock option distributions payable to
Time Warner, which are not payable until the underlying options
are exercised. Any accrued amounts will be adjusted in
subsequent accounting periods based on changes in the market
price of Time Warner Common Stock. TWC reimbursed Time Warner
$2 million in 2008 under this arrangement. As of
December 31, 2008, TWC had no stock option reimbursement
obligations payable to Time Warner. For more information
regarding the reimbursement amounts, please see Notes 3 and
12 to the Companys audited consolidated financial
statements for the year ended December 31, 2008 in its 2008
Form 10-K.
A similar arrangement was entered into with respect to Time
Warners reimbursement to TWC related to awards based on
TWC Common Stock held by TWC employees who subsequently became
employees of Time Warner and its subsidiaries.
Other
Agreements Related to TWCs Business
In the ordinary course of TWCs business, it has entered
into various agreements and arrangements with Time Warner and
its various divisions and affiliates on terms that TWC believes
are no less favorable than those that could be obtained in
agreements with third parties. TWC does not believe that any of
these
63
agreements or arrangements are individually material to its
business. These agreements and arrangements will continue
following the Separation and include:
|
|
|
|
|
agreements to sell advertising to various video programming
vendors owned by Time Warner and its affiliates and carried on
TWCs cable systems;
|
|
|
|
agreements to purchase or license programming from various
programming vendors owned in whole or in part by Time Warner and
its affiliates;
|
|
|
|
real property lease agreements with Time Warner and its
affiliates; and
|
|
|
|
intellectual property license agreements with Time Warner and
its affiliate.
|
Under these agreements, TWC received $13 million in
aggregate payments from Time Warner and its affiliates (other
than TWC and its subsidiaries), and TWC made $866 million
in aggregate payments to Time Warner and its affiliates (other
than TWC and its subsidiaries) during 2008.
Reimbursement
for Services
Prior to the Separation, Time Warner provided TWC with specified
administrative services under an arrangement that went into
effect immediately after the completion of the March 31,
2003 restructuring of TWE (the TWE Restructuring),
including selected tax, human resources, legal, information
technology, treasury, financial, public policy and corporate and
investor relations services. TWC paid fees that approximated
Time Warners estimated overhead cost for services
rendered. The services rendered and fees paid were renegotiated
annually. In 2008, TWC incurred a total of $13 million
under this arrangement. In connection with the Separation, TWC
entered into a transition service agreement with Time Warner,
under which Time Warner will continue to provide TWC with
certain limited human resources and administrative services for
a short period of time after the completion of the Separation
for a fee.
Intellectual
Property Agreements
Time Warner Brand and Trade Name License
Agreement. In connection with the TWE
Restructuring, TWC entered into a license agreement with Time
Warner, which terminated upon the Separation, under which Time
Warner granted TWC a perpetual, royalty-free, exclusive license
to use, in the United States and its territories and
possessions, the TW, Time Warner Cable,
TWC and TW Cable marks and specified
related marks as a trade name and on marketing materials,
promotional products, portals and equipment and software. Time
Warner had the right to terminate the agreement if a change of
control of TWC occurred.
In connection with the Separation, TWC entered into a new
license agreement with Time Warner pursuant to which Time Warner
granted TWC and its subsidiaries a royalty-free, exclusive,
worldwide, non-transferable license to use the Time Warner
Cable, TWC and TW Cable marks and
specified related marks in connection with the delivery of
residential and commercial video, data, phone, networking and
security services. The license also covers related equipment and
software, promotional products, other ancillary services and
certain naming rights agreements. The license is perpetual,
subject to Time Warners right to terminate under certain
circumstances, including in connection with certain changes of
control of TWC.
Road Runner Brand License Agreement. In
connection with the TWE Restructuring, TWC entered into a
license agreement with Warner Communications Inc.
(WCI) which terminated upon the Separation. WCI
granted TWC a perpetual, royalty-free license to use, in the
United States and its territories and possessions and in Canada,
the Road Runner mark and copyright and some of the
related marks. TWC had the right to use the Road Runner licensed
marks in connection with high-speed data services and other
services ancillary to those services, and on marketing
materials, promotional products, portals and equipment and
software. The license was exclusive regarding high-speed data
services, ancillary broadband services and equipment and
software. The license was non-exclusive regarding promotional
products and portals. WCI was prohibited from licensing to third
parties the right to use these marks in connection with DSL,
dial-up or
direct broadcast satellite technologies in the United States,
its territories and possession, or in Canada. WCI had the right
to terminate the agreement if a change of control of TWC
occurred.
64
In connection with the Separation, TWC entered into a license
agreement with Warner Bros. Consumer Products Inc. (Warner
Bros.) pursuant to which Warner Bros. granted TWC and its
subsidiaries an exclusive, non-transferable license to use in
the United States and its territories and possessions and in
Canada the Road Runner mark and copyright and
certain related marks in connection with TWCs provision of
high-speed data, wireless broadband, related equipment and
software and other ancillary services, including non-exclusive
rights for promotional products, subject to TWCs payment
of an annual license fee. The initial term of the license is for
a period of ten years, with the right to renew for additional
ten year terms. Warner Bros. has the right to terminate under
certain circumstances, including in connection with certain
changes of control of TWC.
Time Warner Interactive Video Group Inc. Intellectual
Property Agreement. In connection with the
Separation, TWC and Time Warner Interactive Video Group Inc.
(TWIVG) entered into a license agreement with WCI
(the TWIVG License). Under the TWIVG License, TWC
and TWIVG granted WCI a worldwide, non-exclusive,
non-transferable (with limited exceptions), royalty-free,
non-sublicensable (with limited exceptions) license to use,
make, modify and distribute certain intellectual property,
including patents, inventions and copyrights, owned by TWIVG as
of December 31, 2003. The license is perpetual, subject to
TWCs and TWIVGs right to terminate under certain
circumstances, including in connection with certain changes of
control of WCI
TWE Intellectual Property Agreement. As part
of the TWE Restructuring, TWE entered into an intellectual
property agreement (the TWE Intellectual Property
Agreement) with WCI that allocated to TWE intellectual
property relating to the cable business and allocated to WCI
intellectual property relating to the non-cable business,
primarily content-related assets, such as Home Box Office assets
and Warner Bros. Studio assets. The agreement also provided for
cross licenses between TWE and WCI so that each may continue to
use intellectual property that each was respectively using at
the time of the TWE Restructuring. Under the TWE Intellectual
Property Agreement, each of TWE and WCI granted the other a
non-exclusive, fully paid up, worldwide, perpetual,
non-sublicensable (except to affiliates), non-assignable (except
to affiliates), royalty free and irrevocable license to use the
intellectual property covered by the TWE Intellectual Property
Agreement. In addition, both TWE and WCI granted each other
sublicenses to use intellectual property licensed to either by
third parties that were being used at the time of the TWE
Restructuring.
TWI Cable Intellectual Property
Agreement. Prior to the TWE Restructuring, TWI
Cable Inc. (TWI Cable), an entity that was under the
control of Time Warner, entered into an intellectual property
agreement (the TWI Cable Intellectual Property
Agreement) with WCI with substantially the same terms as
the TWE Intellectual Property Agreement. The TWI Cable
Intellectual Property Agreement allocated to WCI intellectual
property related to the cable business and allocated to TWI
Cable intellectual property related to the non-cable business.
As part of the TWE Restructuring, WCI then assigned to TWC the
cable-related intellectual property assets it received under
that agreement. These agreements make TWC the beneficiary of
cross licenses to TWI Cable intellectual property related to the
non-cable business, on substantially the same terms as those
described above. In connection with the TWI Cable Intellectual
Property Agreement, TWI Cable and WCI executed and delivered
assignment agreements in substantially the same form as those
executed in connection with the TWE Intellectual Property
Agreement.
Tax
Matters Agreement
TWC is party to a tax matters agreement with Time Warner that
governs TWCs inclusion in any Time Warner consolidated,
combined or unitary group for federal and state tax purposes for
taxable periods during which TWC was a member of any such group.
Under the tax matters agreement, for each year TWC was included
in the Time Warner consolidated group for federal income tax
purposes, TWC agreed to make periodic payments, subject to
specified adjustments, to Time Warner based on the applicable
federal income tax liability that TWC and its affiliated
subsidiaries would have had for each taxable period if TWC had
not been included in the Time Warner consolidated group. Time
Warner agreed to reimburse TWC, subject to specified
adjustments, for the use of tax items, such as net operating
losses and tax credits attributable to TWC or an affiliated
subsidiary, to the extent that these items are applied to reduce
the taxable income of a member of the Time Warner consolidated
group other than TWC or one of its subsidiaries. Similar
provisions apply to any state
65
income, franchise or other tax returns filed by any Time Warner
consolidated, combined or unitary group for each year TWC was
included in such consolidated, combined or unitary group for any
state income, franchise or other tax purposes. During 2008, TWC
made cash tax payments to Time Warner of $9 million.
Under applicable United States Treasury Department regulations,
each member of a consolidated group filing consolidated federal
income tax returns is severally liable for the federal income
tax liability of each other member of the consolidated group.
Similar rules apply with respect to members of combined or
unitary groups for state tax purposes. Although TWC is no longer
a member of the Time Warner consolidated group for federal
income tax purposes as a result of the Separation, TWC continues
to have several liability for the federal income tax liability
of the Time Warner consolidated group for all taxable years, or
portions of taxable years, during which TWC was a member of the
Time Warner consolidated group. In addition, TWC has several
liability for some state income taxes of groups with which TWC
filed combined or unitary state tax returns. Although Time
Warner has indemnified TWC against this several liability, TWC
would be liable in the event that this federal
and/or state
liability were incurred but not discharged by Time Warner or any
member of the relevant consolidated, combined or unitary group.
In connection with the Separation, TWC entered into an amendment
to the tax matters agreement with Time Warner. In addition to
the terms described above, the amended agreement requires TWC to
indemnify Time Warner for any taxes resulting from the failure
of any of the transactions related to the Separation to qualify
as tax-free (Transaction Taxes) as a result of
(i) certain actions taken, or the failure to take actions,
by TWC or (ii) the failure of certain representations to be
made by TWC to be true. The agreement further requires Time
Warner to indemnify TWC for all other Transaction Taxes.
The descriptions of the foregoing agreements do not purport to
be complete and are subject to, and qualified in their entirety
by reference to, those agreements.
COMPANY
PROPOSALS
PROPOSAL ONE:
Election of Directors
Upon the recommendation of the Nominating and Governance
Committee, the Board has nominated for election at the Annual
Meeting the following slate of twelve nominees for directors.
Each of the nominees is currently serving as a director of the
Company and, other than Ms. James, Mr. Shirley and
Sen. Sununu (who were elected by the Board effective
March 12, 2009), was elected by the holders of Class A
or Class B common stock, as applicable, at the
Companys 2008 annual meeting of stockholders. The
appointment, and current nomination for election, of
Ms. James, Mr. Shirley and Sen. Sununu to the
Board resulted from a search, led by members of the Nominating
and Governance Committee, to identify potential independent
candidates who also satisfied certain other criteria for Board
membership discussed above. The Committee received suggestions
from a variety of sources, with the initial recommendation for
Ms. James having come from Mr. Copeland, a director,
and the initial recommendations for Mr. Shirley and Sen.
Sununu having come from Mr. Britt, the Companys
Chairman, President and Chief Executive Officer. The Company
expects each nominee for election as a director at the Annual
Meeting to be able to accept such nomination. Information about
these nominees is provided above under the heading
Directors.
The persons named in the proxy intend to vote such proxy for the
election of each of the twelve nominees for director named
below, unless the holder indicates on the proxy that the vote
should be against any or all of the nominees. If any
nominee is unable to accept the nomination, proxies will be
voted in favor of the remainder of those nominated for director
and may be voted for substitute nominees. Proxies cannot be
voted for a greater number of persons than the number of
nominees.
The Board of Directors recommends a vote FOR the
election
of the twelve director nominees listed below.
66
|
|
Carole Black
|
Glenn A. Britt
|
Thomas H. Castro
|
David C. Chang
|
James E. Copeland, Jr
|
Peter R. Haje
|
Donna A. James
|
Don Logan
|
N.J. Nicholas, Jr.
|
Wayne H. Pace
|
Edward D. Shirley
|
John E. Sununu
|
Vote
Required for Approval
A majority of the votes duly cast by the holders of Common Stock
with respect to each director is required for the election of
each director.
PROPOSAL TWO:
Ratification of Appointment of Independent Auditor
The Audit Committee of the Board of Directors has appointed
Ernst & Young LLP as independent auditor of the
Company to audit its consolidated financial statements for 2009
and the Board of Directors has determined that it would be
desirable to request that the stockholders ratify such
appointment.
Ernst & Young LLP, a registered public accounting
firm, has served the Company as independent auditor since the
Companys incorporation in 2003. Representatives of
Ernst & Young LLP will be present at the Annual
Meeting with the opportunity to make a statement if they desire
to do so and to respond to appropriate questions from
stockholders.
Vote
Required for Approval
Stockholder approval is not required for the appointment of
Ernst & Young LLP, since the Audit Committee of the
Board of Directors has the responsibility for selecting
auditors. However, the appointment is being submitted for
ratification at the Annual Meeting. No determination has been
made as to what action the Board of Directors would take if
stockholders do not ratify the appointment.
The Board of Directors recommends a vote FOR approval of
the appointment
of Ernst & Young LLP as independent auditor.
VOTING AT
THE ANNUAL MEETING
Voting at
the Annual Meeting; Record Date
Only holders of record of the Companys Common Stock at the
close of business on April 8, 2009, the record date, are
entitled to notice of and to vote at the Annual Meeting. At that
time, 352,335,722 shares of Common Stock, par value $0.01
per share were entitled to vote. Each issued and outstanding
share of Common Stock has one vote on any matter submitted to a
vote of stockholders.
The presence, in person or by proxy, of the holders of a
majority of the votes entitled to be cast at the Annual Meeting
is necessary to constitute a quorum.
67
Required
Vote
|
|
|
|
|
A majority of the votes duly cast by the holders of Common Stock
with respect to each nominee is required for the election of
that nominee as a director.
|
|
|
|
The affirmative vote of a majority of the votes duly cast by the
holders of Common Stock is required to approve each of the other
matters to be acted upon at the Annual Meeting.
|
An abstention is deemed present, but is not deemed a
vote cast. As a result, abstentions and broker
non-votes are not included in the tabulation of the
voting results on the election of directors or issues requiring
approval of a majority of the votes cast and, therefore, do not
have the effect of votes in opposition. A broker
non-vote occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because
the nominee does not have discretionary voting power on that
item and has not received instructions from the beneficial
owner. Broker non-votes and the shares with respect
to which a stockholder abstains are included in determining
whether a quorum is present.
Proxies
and Voting Procedures
Proxies. All shares entitled to vote
and represented by properly executed proxies received prior to
the Annual Meeting, and not revoked, will be voted as instructed
on those proxies. If no instructions are indicated, the shares
will be voted as recommended by the Board of Directors. No
stockholder of record may appoint more than three persons to act
as his or her proxy at the Annual Meeting.
Voting on Other Matters. If any other
matters are properly presented at the Annual Meeting for
consideration, the persons named in the enclosed form of proxy
will have discretion to vote on those matters in accordance with
their own judgment to the same extent as the person signing the
proxy would be entitled to vote. In accordance with the
Companys by-laws, the Annual Meeting may be adjourned,
including by the Chairman, in order to permit the solicitation
of additional proxies. The Company does not currently anticipate
that any other matters will be raised at the Annual Meeting.
Voting Methods-Internet, Telephone or
Mail. Many stockholders will have the option
to submit their proxies or voting instructions electronically
through the Internet or by telephone. Stockholders should check
their Notice of Internet Availability of Proxy Material, proxy
card or voting instructions forwarded by their broker, bank or
other holder of record to see which options are available.
Stockholders submitting proxies or voting instructions via the
Internet should understand that there may be costs associated
with electronic access, such as usage charges from Internet
access providers and telephone companies, that would be borne by
the stockholder.
Revoking a Proxy. Any stockholder of
record may revoke a proxy at any time before it is voted by:
(i) filing with the Secretary of the Company, at or before
the taking of the vote at the Annual Meeting, a written notice
of revocation or a duly executed proxy, in either case dated
later than the prior proxy relating to the same shares; or
(ii) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not by itself
revoke a proxy).
Any written notice of revocation or subsequent proxy should be
delivered to Time Warner Cable Inc., 60 Columbus Circle, New
York, New York 10023, Attention: General Counsel, or hand
delivered to the Secretary, before the taking of the vote at the
Annual Meeting. To revoke a proxy previously submitted by
telephone or Internet, a stockholder may simply submit a new
proxy at a later date before the taking of the vote at the
Annual Meeting, in which case, the later submitted proxy will be
recorded and the earlier proxy will be revoked.
Stockholders
Sharing the Same Address; Householding
In accordance with notices to many stockholders who hold their
shares through a bank, broker or other holder of record (a
street-name stockholder) and share a single address,
only one annual report and proxy
68
statement or Notice of Internet Availability of Proxy Material,
as applicable, is being delivered to that address unless
contrary instructions from any stockholder at that address were
received. This practice, known as householding, is
intended to reduce the Companys printing and postage
costs. However, any such street-name stockholder residing at the
same address who wishes to receive a separate copy of a Notice
of Internet Availability of Proxy Material or this Proxy
Statement or accompanying Time Warner Cable Inc. 2008 Annual
Report to Stockholders may request a copy by contacting the
bank, broker or other holder of record, or the Company by
telephone at: 1-877-4-INFO-TWC, by
e-mail to:
ir@twcable.com or by mail to: Time Warner Cable Inc., 60
Columbus Circle, New York, NY 10023, Attention: Investor
Relations. The voting instruction or Notice of Internet
Availability of Proxy Material, as applicable, sent to a
street-name stockholder should provide information on how to
request (1) householding of future Company materials or
(2) separate materials if only one set of documents is
being sent to a household. If it does not, a stockholder who
would like to make one of these requests should contact the
Company as indicated above.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the Exchange Act), requires the
Companys officers and directors, and persons who own more
than ten percent of a registered class of the Companys
equity securities, to file reports of ownership and changes in
ownership with the SEC and the New York Stock Exchange.
Officers, directors and greater than ten-percent stockholders
are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. Based solely
on a review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were
required, the Company believes that during 2008, its officers,
directors and greater than ten-percent beneficial owners
complied with all applicable Section 16(a) filing
requirements.
OTHER
PROCEDURAL MATTERS
Expenses
of Solicitation
All expenses of this solicitation, including the cost of
preparing and mailing this Proxy Statement, will be borne by the
Company. In addition to solicitation by use of the mail, proxies
and voting instructions may be solicited by directors, officers
and employees of the Company in person, by telephone or other
means of communication. Such directors, officers and employees
will not be additionally compensated but may be reimbursed for
reasonable out-of-pocket expenses in connection with such
solicitation. The Company has retained D.F. King &
Co., Inc. at an estimated cost of $7,500, plus reimbursement of
expenses, to assist in its solicitation of proxies from brokers,
nominees, institutions and individuals. Arrangements will also
be made with custodians, nominees and fiduciaries for forwarding
proxy solicitation materials to beneficial owners of shares held
of record by such custodians, nominees and fiduciaries, and the
Company will reimburse such custodians, nominees and fiduciaries
for reasonable expenses incurred in connection therewith.
Procedures
for Submitting Stockholder Proposals
Proposals for Inclusion in the Proxy
Statement. Pursuant to
Rule 14a-8
under the Exchange Act, stockholders may present proper
proposals for inclusion in the Companys proxy statement
and for consideration at the next annual meeting of its
stockholders by submitting their proposals to the Company in a
timely manner. In order to be included for the 2010 Annual
Meeting, stockholder proposals must be received by the Company
no later than December 24, 2009, and must otherwise comply with
the requirements of
Rule 14a-8.
Proposals not Included in the Proxy
Statement. In addition, the Companys
by-laws establish an advance notice procedure with regard to
certain matters, including stockholder proposals not included in
the Companys proxy statement, to be brought before an
annual meeting of stockholders. In general, notice must be
received by the Corporate Secretary of the Company not less than
90 days nor more than 120 days prior to the
anniversary date of the immediately preceding annual meeting and
must contain specified information concerning the matters to be
brought before such meeting and concerning the stockholder
proposing such matters. Therefore, to be presented at the
Companys 2010 Annual Meeting, such a proposal must be
received
69
by the Company on or after February 2, 2010 but no later than
March 5, 2010. If the date of the annual meeting is more
than 30 days earlier or more than 60 days later than
such anniversary date, notice must be received not earlier than
the 120th day prior to such annual meeting and not later
than the close of business on the later of the 90th day
prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is
first made.
If a stockholder who has notified the Company of his intention
to present a proposal at an annual meeting does not appear or
send a qualified representative to present his proposal at such
meeting, the Company need not present the proposal for a vote at
such meeting.
Procedures
for Submitting Director Recommendations and
Nominations
Submitting Director Recommendations to the Nominating and
Governance Committee. If a stockholder would
like the Nominating and Governance Committee to consider an
individual as a candidate for election to the Board of
Directors, the stockholder must submit a proper and timely
request as follows:
|
|
|
|
|
Timing. The stockholder should notify
the Nominating and Governance Committee by no later than
September 1 of the year prior to the annual stockholders meeting
at which the candidate would seek to be elected.
|
|
|
|
Information. In notifying the
Committee, the stockholder should provide the following
information to the Committee:
|
|
|
|
|
>
|
The name and the address of the stockholder making the
submission and the name, address, telephone number and social
security number of the candidate to be considered.
|
|
|
>
|
The class or series and number of shares of the Companys
stock that are beneficially owned by the stockholder making the
submission, including a reasonably detailed description of
derivative contracts, derivative securities or derivative
transactions to which such stockholder is a party and impact
such stockholders economic interest in the Companys
securities or any other proxy, contract, arrangement or
understanding to which such stockholder has or may have a right
or has or may have granted a right to vote any shares of the
Companys securities, a description of all arrangements or
understandings between the stockholder and the candidate, and an
executed written consent of the candidate to serve as a director
of the Company if so elected.
|
|
|
>
|
A copy of the candidates resume and references.
|
|
|
>
|
An analysis of the candidates qualifications to serve on
the Board of Directors and on each of the Boards
committees in light of the criteria set forth in the by-laws,
Corporate Governance Policy, and the Policy Statement Regarding
Director Nominations (including all regulatory requirements
incorporated by references therein).
|
|
|
|
|
|
Address. The foregoing information
should be submitted to the Nominating and Governance Committee
through the Corporate Secretary, Time Warner Cable Inc., 60
Columbus Circle, New York, New York 10023.
|
The Committee has a policy of applying the same criteria in
reviewing candidates proposed by stockholders as it employs in
reviewing candidates proposed by any other source.
Stockholder Nominations Submitted to
Stockholders. The Companys by-laws
provide that stockholders may nominate persons for election as
directors at the Companys stockholders meeting by giving
timely written notice to the Company containing required
information. The Companys by-laws require that, to be
timely and proper, notice of a nomination by a stockholder must
be delivered to or mailed to and received at the Companys
principal executive offices as follows:
|
|
|
|
|
Annual Stockholders Meetings. For
elections to be held at an annual meeting of the stockholders,
at least 90 days and no more than 120 days before the
first anniversary of the date of the annual meeting of
stockholders for the prior year. If the date of the annual
meeting is more than 30 days earlier or more than
60 days later than such anniversary date, notice by the
stockholder must be delivered or
|
70
|
|
|
|
|
received no earlier than the 120th day before the annual
meeting and no later than the close of business on the later of
the 90th day prior to the annual meeting or the
10th day after the day on which the date of such meeting is
first publicly announced.
|
|
|
|
|
|
Special Stockholders Meetings. For
elections that are going to take place at a special meeting of
the stockholders, no earlier than the 90th day before the
special meeting and no later than the close of business on the
later of the 60th day before the special meeting or the
10th day after the day on which the date of the special
meeting and the names of the nominees to be elected at the
meeting are first publicly announced.
|
|
|
|
Other Circumstances. Additionally, if
the number of directors to be elected to the Board at an annual
meeting of the stockholders is increased and there is no public
announcement naming all of the nominees for directors or
specifying the size of the increased Board at least 90 days
before the first anniversary of the date of the prior
years annual meeting, a stockholders notice will
also be timely with respect to nominees for any new positions if
it is delivered to or mailed to and received by the Company not
later than the 10th day after the public announcement is
made.
|
|
|
|
Information. The notice must contain
prescribed information about the proponent and each nominee,
including the information about the nominee that would have been
required to be included in a proxy statement filed under SEC
rules had such nominee been nominated by the Board of Directors.
|
Address. All notices of proposals by
stockholders, whether or not to be included in the
Companys proxy materials, should be sent to the attention
of the Corporate Secretary of the Company at 60 Columbus Circle,
New York, New York 10023.
Communicating
with the Board of Directors
The Companys Independent Directors have approved a process
for stockholders to communicate with directors. Pursuant to that
process, stockholders, employees and others interested in
communicating with the CEO, the Boards only employee
director, should write to the address below:
Glenn A. Britt
Chairman, President and Chief Executive Officer
Time Warner Cable Inc.
60 Columbus Circle
New York, NY 10023
Those interested in communicating directly with the Board, any
of the Boards committees, the non-employee directors as a
group or any individual non-employee director should write to
the address below:
[Name of Addressee]
c/o Corporate
Secretary
Time Warner Cable Inc.
60 Columbus Circle
New York, New York 10023
General
The Board of Directors does not currently know of any other
matters to be presented at the Annual Meeting. If any additional
matters are properly presented, the persons named in the proxy
will have discretion to vote in accordance with their own
judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS,
Marc
Lawrence-Apfelbaum
Executive Vice President,
General
Counsel and Secretary
April 20, 2009
71
Directions
to:
Time
Warner Cable Inc.
Mid-Ohio Technical Operations Center
3760 Interchange Road
Columbus, Ohio 43204
From
Dayton/West:
From I-70, exit at Wilson Road. At the light, go
straight which turns into Interchange Road. Interchange Road
ends at the Time Warner Cable parking lot (on right).
From the
Airport:
Proceed West on International Gateway to
I-670 West. Follow I-670 which will merge with
I-70W. Exit at Wilson Road. Turn left at end of ramp onto
Wilson. Turn right at first light onto Interchange Road.
Interchange Road ends at the Time Warner Cable parking lot.
TIME
WARNER CABLE INC.
C/O BNY MELLON SHAREOWNER SERVICES
POST OFFICE BOX 3540
SOUTH HACKENSACK, NJ 07606-9240
VOTE BY INTERNET www.proxyvote.com
Use the Internet to transmit your voting
instructions and for electronic delivery of
information up until 11:59 P.M. Eastern Time the day
before the cut-off date or meeting date. Have your
proxy card in hand when you access the web site and
follow the instructions to obtain your records and
to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by
Time Warner Cable Inc. in mailing proxy materials,
you can consent to receiving all future proxy
statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign
up for electronic delivery, please follow the
instructions above to vote using the Internet and,
when prompted, indicate that you agree to receive or
access proxy materials electronically in future
years.
VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M. Eastern Time the
day before the cut-off date or meeting date. Have
your proxy card in hand when you call and then
follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in
the postage-paid envelope we have provided or return
it to Time Warner Cable Inc., c/o Broadridge, 51
Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
|
|
|
|
|
M13614 -P77518
|
|
KEEP THIS PORTION FOR YOUR RECORDS |
|
|
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|
|
DETACH AND RETURN THIS PORTION ONLY |
|
|
|
|
|
|
|
|
|
|
|
|
|
TIME WARNER CABLE INC. |
|
|
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS A |
|
|
|
|
VOTE FOR ITEMS 1 AND 2. |
|
|
|
|
1. |
|
Election of Directors |
|
For |
|
Against |
|
Abstain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominees: |
|
|
|
|
|
|
|
|
1a.
|
|
Carole Black
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1b.
|
|
Glenn A. Britt
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1c.
|
|
Thomas H. Castro
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1d.
|
|
David C. Chang
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1e.
|
|
James E. Copeland, Jr.
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1f.
|
|
Peter R. Haje
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1g.
|
|
Donna A. James
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1h.
|
|
Don Logan
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1i.
|
|
N.J. Nicholas, Jr.
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
For address changes and/or comments, please check
this box and write them on the back where indicated. |
|
|
|
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
Please indicate if you plan to attend this meeting. |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
Yes
|
|
No |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
Against
|
|
Abstain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1j.
|
|
Wayne H. Pace
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1k.
|
|
Edward D. Shirley
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1l.
|
|
John E. Sununu
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vote on Proposal |
|
For |
|
Against |
|
Abstain |
|
|
|
|
|
|
|
|
|
|
|
|
|
2. |
|
|
|
Ratification of Auditors |
|
o |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
3. |
|
|
|
In their discretion, on such other matters as may
properly come before the meeting or any
adjournment or adjournments thereof. |
|
|
|
|
|
|
Please sign exactly as name appears hereon. When signing as attorney, executor, administrator,
trustee or guardian, please give title as such. Joint owners should each sign personally. All
holders must sign. If a corporation or partnership, please sign in full corporate or partnership
name, by duly authorized officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature [PLEASE SIGN WITHIN BOX]
|
|
|
Date
|
|
|
|
|
|
Signature (Joint Owners)
|
|
|
Date
|
|
|
|
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
PROXY
TIME WARNER CABLE INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TIME WARNER CABLE INC. FOR THE ANNUAL MEETING OF STOCKHOLDERS
JUNE 3, 2009
The undersigned hereby acknowledges receipt of the Time Warner Cable Inc. Notice of Annual Meeting
and Proxy Statement and hereby constitutes and appoints Marc Lawrence-Apfelbaum, Ellen East and
Robert D. Marcus, and each of them, its true and lawful agents and proxies, with full power of
substitution in each, to attend the Annual Meeting of Stockholders of TIME WARNER CABLE INC. on
Wednesday, June 3, 2009, and any adjournment thereof, and to vote on the matters indicated all the
shares of common stock that the undersigned would be entitled to vote if personally present.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND RETURN IT PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED AND FOR PROPOSAL 2.
|
|
|
Address Changes/Comments: |
|
|
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
TIME WARNER CABLE INC.
PO BOX 145430
CINCINNATI, OH 45250-5430
You must provide instructions to the Trustee by May
31, 2009 for your instructions to be tabulated. You
may issue instructions by telephone or the Internet
until 11:59 P.M. (Eastern Time) on that day. If you
are sending instructions by mail, the Trustee must
receive your executed instruction card by May 31,
2009. If you submit your instructions by telephone
or the Internet, there is no need to mail back your
instruction card. If you do not provide instructions
to the Trustee, the Trustee will vote your interests
as required by the terms of the Plan and described
on the reverse side of the card.
You may send your voting instructions to the Trustee
on the Internet, over the telephone or by mail, as
follows:
PROVIDE VOTING INSTRUCTIONS BY INTERNET www.proxyvote.com
Use the Internet to transmit your voting instructions
and for electronic delivery of information up until
11:59 P.M. Eastern Time on May 31, 2009. Have your
voting instruction card in hand when you access the
web site and follow the instructions to obtain your
records and to create an electronic voting
instruction form.
PROVIDE VOTING INSTRUCTIONS BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M. Eastern Time on May
31, 2009. Have your voting instruction card in hand
when you call and then follow the instructions.
PROVIDE VOTING INSTRUCTIONS BY MAIL
Mark, sign and date your voting instruction card and
return it in the postage-paid envelope we have
provided or return it to Broadridge, 51 Mercedes Way,
Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
|
|
|
|
|
M13744-Z48528
|
|
KEEP THIS PORTION FOR YOUR RECORDS |
|
|
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|
|
DETACH AND RETURN THIS PORTION ONLY |
|
|
|
|
|
|
|
|
|
|
|
|
|
TIME WARNER CABLE INC. |
|
|
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS A |
|
|
|
|
VOTE FOR ITEMS 1 AND 2. |
|
|
|
|
1. |
|
Election of Directors |
|
|
|
|
|
|
|
|
|
|
Nominees: |
|
For |
|
Against |
|
Abstain |
|
|
Vote on Directors |
|
|
|
|
|
|
|
|
1a
|
|
Carole Black
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1b
|
|
Glenn A. Britt
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1c
|
|
Thomas H. Castro
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1d
|
|
David C. Chang
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1e
|
|
James E. Copeland, Jr.
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1f
|
|
Peter R. Haje
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1g
|
|
Donna A. James
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1h
|
|
Don Logan
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1i
|
|
N.J. Nicholas, Jr.
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For address changes and/or comments, please check
this box and write them on the back where indicated. |
|
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Please indicate if you plan to attend this meeting. |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
Yes
|
|
No |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
Against
|
|
Abstain |
|
|
|
|
1j
|
|
Wayne H. Pace
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1k
|
|
Edward D. Shirley
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1l
|
|
John E. Sununu
|
|
o
|
|
o
|
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vote on Proposal |
|
For |
|
Against |
|
Abstain |
|
|
|
|
|
|
|
|
|
|
|
|
|
2. |
|
|
|
Ratification of Auditors |
|
o |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
3. |
|
|
|
To grant discretionary voting authority to
management persons regarding such other
matters as may properly come before the
meeting or any adjournment or
adjournments thereof. |
|
|
|
|
|
|
Please sign exactly as name appears hereon. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. Joint owners should each sign personally. All
holders must sign. If a corporation or partnership, please sign in full corporate or partnership
name, by duly authorized officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature [PLEASE SIGN WITHIN BOX]
|
|
|
Date
|
|
|
|
|
|
Signature (Joint Owners)
|
|
|
Date
|
|
|
|
SUBMIT YOUR CONFIDENTIAL VOTING INSTRUCTIONS
BY TELEPHONE, INTERNET OR MAIL
TWC SAVINGS PLAN
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by Time Warner Cable Inc. in mailing proxy
materials, you can consent to receiving all future proxy statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the
instructions on the reverse side to vote using the Internet and, when prompted, indicate that you
agree to receive or access shareholder communications electronically in future years.
|
|
|
|
|
|
|
|
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
|
|
M13745-Z48528 |
Time Warner Cable Inc.
CONFIDENTIAL VOTING INSTRUCTIONS
Instructions solicited by Fidelity Management Trust Company on behalf of the Board of Directors for
the Time Warner Cable Inc. Annual Meeting of Stockholders on June 3, 2009.
The undersigned hereby instructs Fidelity Management Trust Company (Fidelity), as Trustee, to
vote as follows by proxy at the Annual Meeting of Stockholders of Time Warner Cable Inc. to be held
on June 3, 2009, and at any adjournment thereof, the undersigneds proportionate interest in the
shares of Time Warner Cable Inc. Common Stock held in the TWC Common Stock Fund under the TWC
Savings Plan (the Plan).
Under the provisions of the Trust relating to the Plan, Fidelity, as Trustee, is required to
request your confidential instructions as to how your proportionate interests in the shares of Time
Warner Cable Inc. Common Stock held in the TWC Common Stock Fund under the Plan (an interest) is
to be voted at the Annual Meeting of Stockholders scheduled to be held on June 3, 2009. Your
instructions to Fidelity will not be divulged or revealed to anyone at Time Warner Cable Inc. If
Fidelity does not receive your instructions on or prior to 5:00 P.M. (Eastern Time) via a voting
instruction card or 11:59 P.M. (Eastern Time) via telephone or the Internet on May 31, 2009, your
interest, if any, attributable to (a) accounts transferred from the Time Incorporated Payroll-Based
Employee Stock Ownership Plan (PAYSOP) will not be voted and (b) the remainder of the Plan
accounts, if any, will be voted at the Annual Meeting in the same proportion as other participants
interests in the Plan for which Fidelity has received voting instructions (excluding any PAYSOP
account).
|
|
|
Address Changes/Comments: |
|
|
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
(PLEASE SIGN AND DATE ON THE REVERSE SIDE)