UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 26, 2011
TIME WARNER CABLE INC.
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
|
| Delaware
|
|
001-33335
|
|
84-1496755 |
|
|
|
|
|
|
| (State or Other Jurisdiction of
|
|
(Commission File Number)
|
|
(IRS Employer |
| Incorporation)
|
|
|
|
Identification No.) |
60 Columbus Circle, New York, New York 10023
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (212) 364-8200
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
On May 26, 2011, Time Warner Cable Inc. (the “Company”) issued a press release announcing the
selection of Irene M. Esteves as the Company’s Executive Vice President and Chief Financial
Officer. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference. Ms. Esteves will assume the responsibilities from Robert D. Marcus, the Company’s
President and Chief Operating Officer who has been serving as acting Chief Financial Officer.
Ms. Esteves, 52 years old, has held executive positions in finance, strategy and other areas
of corporate leadership at several leading U.S. and international companies. She joins the Company
from XL Group plc, a global insurance and reinsurance company (“XL”), where she has served as
Executive Vice President and Chief Financial Officer since May 2010. From 2008 to 2010, she was
Senior Executive Vice President and Chief Financial Officer of Regions Financial Corporation in
Birmingham, Alabama, one of the largest commercial and retail banks in the U.S. From 2006 to 2008,
she was Senior Vice President and Chief Financial Officer of the Capital Management Group at
Wachovia Corporation in Charlotte, North Carolina. She previously held executive positions
overseeing functions including domestic and global finance, human resources and corporate strategy
with Putnam Investments in Boston, Massachusetts and Miller Brewing Company in Milwaukee,
Wisconsin. She started her career and worked for 13 years at S.C. Johnson & Son, Inc. (SC Johnson
Wax) in Racine, Wisconsin, where she rose to Division Controller of North American Home Care.
During 2010 and 2011, XL or its affiliates has provided directors’ and officers’ liability
insurance and fiduciary liability insurance coverage to the Company for which the Company has paid
annual premiums that are not material to the Company or XL.
On May 26, 2011, the Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”) approved Ms. Esteves’s compensation and the terms of a new employment
agreement with Mr. Marcus in his capacity as the Company’s President and Chief Operating Officer.
Mr. Marcus and the Company entered into the employment agreement described herein on May 31, 2011.
Irene M. Esteves Compensation Arrangements
The Compensation Committee approved the following compensation for Ms. Esteves: (a) an annual
base salary of $800,000, (b) an annual discretionary cash bonus with a target amount of $1,200,000
(prorated for a partial year) and (c) annual long-term incentive compensation with a target value
of approximately $3,000,000 (based on a valuation method established by the Company), which may be
in the form of stock options, restricted stock units (“RSUs”), other equity-based awards, any of
which may include performance-based vesting conditions, cash or other components, or any
combination of such forms, as may be determined by the Compensation Committee in its sole
discretion. Her first regular annual long-term incentive award is expected to be made in early
2012.
The Company has agreed to make certain one-time payments and equity awards to Ms. Esteves in
connection with her joining the Company to compensate her for XL compensation that she will forego:
(a) a payment of $600,000 and (b) subject to her execution of an employment agreement with the
Company, (i) cash payments of $220,000 to be paid in August 2011 and $240,000 to be paid in August
2012 and (ii) a special time-based RSU grant valued at approximately $3,725,000 at the time of
grant pursuant to the Company’s valuation methodology, 75% of which will vest on the second
anniversary of the grant date and 25% of which will vest on the third anniversary of the grant
date, in each case, subject to her continued employment by the Company on the applicable payment
and vesting dates and the terms of the award agreement.
Robert D. Marcus Employment Agreement
On May 31, 2011, the Company and Robert D. Marcus entered into an employment agreement
effective as of December 14, 2010 pursuant to which Mr. Marcus will serve as the Company’s
President and Chief Operating Officer through December 31, 2013, subject to earlier termination
pursuant to its terms. Except as described herein, the material terms of the employment agreement
with Mr. Marcus are substantially similar to the terms of his prior employment agreement with the
Company, effective January 1, 2010, as described in the Company’s definitive Proxy Statement dated
April 6, 2011 and filed with the Securities and Exchange Commission on the same date.
As under his prior employment agreement, Mr. Marcus is entitled to certain payments and
benefits upon the Company’s termination of his employment without cause, including the Company’s
material breach of his employment agreement, and in connection with his termination of employment
for other reasons. A “material breach” of the new agreement for purposes of a termination without
cause, includes (a) the Company’s failure to cause a successor to assume the Company’s
2
obligations under the agreement; (b) Mr. Marcus’s not being employed as the Company’s
President and Chief Operating Officer with authority, functions, duties and powers consistent with
that position; (c) Mr. Marcus’s not reporting to Glenn Britt in his capacity as Chief Executive
Officer or to the Board of Directors; and (d) Mr. Marcus’s principal place of employment being
anywhere other than the Company’s principal corporate offices within the New York metropolitan
area.
Consistent with his prior employment agreement, Mr. Marcus’s new agreement also includes
confidentiality terms, as well as non-solicitation, non-compete, and non-disparagement covenants.
Severance and other benefit payments under the agreement cease if Mr. Marcus accepts other
employment with a “Competitive Entity” (as defined in the agreement) or breaches his other
restrictive covenant obligations. In addition, at the discretion of the Company’s Board of
Directors or an authorized committee of the Board, the Company may cause a forfeiture as well as a
recovery, or “claw back,” of equity-based awards and long-term incentive compensation (x) granted
on or after January 1, 2010, if his employment is terminated as a result of significantly
objectionable conduct, including the intentional commission of a “cause”-type event coupled with a
significant adverse financial impact on the Company and/or if he breaches the non-compete covenant
in his employment agreement while employed and (y) granted on or after December 14, 2010 if his
employment is terminated without cause in the absence of a change in control followed by the
Company’s determination within twelve months of his termination that he engaged in acts or
omissions during his employment that would have constituted a “cause”-type event. If triggered,
this repayment/forfeiture obligation applies to (a) all applicable unexercised Company stock
options and unsettled (both unvested and vested) equity-based awards or long-term incentives; (b)
all gain realized upon each exercise of options and the value received with respect to the
settlement of other equity- or cash-based awards during the “forfeiture period,” as defined below;
and (c) the fair market value of equity awards that were awarded to Mr. Marcus or that vested
during the forfeiture period. The “forfeiture period” means (i) in the event of a termination of
employment described in (x) above, the three-year period prior to the termination of employment or
(ii) in the event of a termination of employment described in (y) above, the final three years of
employment and any time after such termination of employment. Mr. Marcus’s repayment obligations
are net of taxes. The exercise by the Company of the forfeiture, claw-back and repayment provisions
of the agreement is subject to the Company providing notice of its exercise within ninety (90) days
of becoming aware of the objectionable conduct and in any event providing written notice within
eighteen (18) months of its occurrence. In the case of a change of ownership or control of the
Company, no person acquiring ownership or control may assert any claims against Mr. Marcus if at
the time of such acquisition such person was aware of, or reasonably should have known of, the
events or circumstances that would have provided a basis to terminate such executive’s employment.
Mr. Marcus’s agreement also provides that if it is subsequently determined by the Board or a
committee thereof that any financial performance criteria were materially incorrect and resulted in
the restatement of the Company’s financial statements within three years of the relevant period
covered therein, and any bonus, incentive or equity grant, payment or settlement made on Mr.
Marcus’s behalf was based in whole or part on such materially incorrect criteria, the Board or a
designated committee thereof may require that Mr. Marcus repay the amount of the bonus, incentive
or equity compensation that would not have been paid had the financial performance criteria been
correctly applied, net of any additional amounts that would have been due to Mr. Marcus based on
the correct application of such financial performance criteria. The Company may exercise its
claw-back and repayment remedies by offsetting any amounts owed to Mr. Marcus, to
the extent permitted by law.
3