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|CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 8-K on 05/29/2015|
TWCs equity awards held by individuals who are employed by TWC as of the consummation of the Mergers will convert into New Charter equity awards based on an exchange ratio determined based on the value a TWC stockholder, other than an Electing Stockholder, would receive in the Mergers, while equity awards held by non-employee directors and former employees will be settled for cash in accordance with the terms of the Merger Agreement. Charters equity awards will convert into New Charter equity awards based on an exchange ratio designed to substantially preserve the value of the awards immediately before and immediately after the consummation of the Mergers.
The Company and TWC each made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants by each of the Company and TWC to, subject to certain exceptions, conduct its respective business in the ordinary course during the interim period between the execution of the Merger Agreement and the consummation of the Mergers. TWC is permitted under the terms of the Merger Agreement to continue paying regular quarterly cash dividends not to exceed $0.75 per share per quarter. In the Merger Agreement, TWC (and its applicable subsidiary) agreed to waive the right of first offer (the ROFO) that they have to acquire the assets of Bright House Networks, LLC during the pendency of the Mergers. This waiver will expire if the Merger Agreement is terminated but the waiver will again be effective if within 9 months following a termination, TWC enters into an agreement or understanding in respect of, or consummates, an alternative acquisition transaction.
The obligation of the parties to consummate the Mergers is subject to customary closing conditions, including, among other things, (1) the approval and adoption of the Merger Agreement and related transactions by the stockholders of both companies (including the approval of a majority of the outstanding shares of Charter common stock (excluding shares beneficially owned by Liberty and its affiliates) with respect to the applicable transactions with the Liberty Parties); (2) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act), without the imposition of one or more conditions that would reasonably be expected to have a material adverse effect on Charter, TWC and their respective subsidiaries, taken as a whole (a Burdensome Condition); (3) the receipt of applicable regulatory approvals from the Federal Communications Commission (FCC) and certain other regulatory approvals, without the imposition of a Burdensome Condition; (4) the absence of certain legal restraints and prohibitions; (5) the effectiveness of the Charter registration statement on Form S-4 to be filed with the Securities and Exchange Commission (the SEC); and (6) the approval of the listing on the NASDAQ of New Charter common stock to be issued in connection with the Mergers. The obligation of each party to consummate the Mergers is also conditioned upon the other partys representations and warranties being true and correct (subject to certain materiality exceptions), the other party having performed in all material respects its material obligations under the Merger Agreement, the other party having not suffered a material adverse effect and the receipt by each party of certain opinions from its counsel regarding the tax treatment of the transactions.
The Merger Agreement requires each of Charter and TWC to call and hold a special stockholder meeting and, subject to certain exceptions, requires the board of directors of each company to recommend that the stockholders of such company approve the transactions. Prior to such approval, the board of directors of each company may, upon receipt of a superior proposal (as defined in the Merger Agreement) or the occurrence of an intervening event (as defined in the Merger Agreement), change its recommendation that the stockholders of such company approve the transactions, subject to complying with notice and other specified conditions, including giving the other party the opportunity to propose changes to the Merger Agreement in response to such superior proposal or other circumstances. If the board of directors of either company changes its recommendation, the other party may terminate the Merger Agreement and receive a termination fee as described below. The company changing its recommendation does not have the right to terminate the Merger Agreement in connection with such a change of recommendation, however, the other party does have the right to do so following such a change of recommendation. In addition, the Merger Agreement prohibits each party from soliciting alternative acquisition proposals in certain circumstances.
The Merger Agreement contains certain other termination rights for each of Charter and TWC, including the right of each party to terminate the Merger Agreement if the Mergers have not been consummated by May 23, 2016, subject to each partys right to extend this end date until November 23, 2016 if all closing conditions (other than receipt of antitrust and other specified regulatory approvals) have been satisfied by May 23, 2016.