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SEC Filings

PREM14A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form PREM14A on 06/26/2015
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Consent Rights of Liberty Broadband and A/N

The BHN/Liberty stockholders agreement provides that for as long as the equity interest or voting interest of New Charter held by an investor party is greater than or equal to 20%, New Charter will not, without the prior written consent of such investor party (i) incur indebtedness (other than to refinance existing indebtedness without any increase in principal amount as described in more detail in the BHN/Liberty stockholders agreement), if immediately following such incurrence New Charter’s leverage ratio (as defined in the BHN/Liberty stockholders agreement) would exceed 5.0x (provided that Liberty Broadband will not have this consent right if it has breached its obligations to purchase New Charter Class A common stock pursuant to the Liberty investment agreement) and (ii) fundamentally change its business or material investments to an extent that would constitute a significant departure from New Charter’s existing business or voluntarily liquidate, dissolve or wind-up New Charter or Charter Holdings.

The BHN/Liberty stockholders agreement also provides that for as long as the equity interest or voting interest of New Charter held by A/N is greater than or equal to 20% (or, in the case of the first bullet below, 11%), without A/N’s prior written consent:

 

    New Charter will not sell or transfer, or enter into any agreement to sell or transfer, all or a majority of the membership interests in Bright House or the assets underlying the membership interests immediately prior to the closing of the BHN transactions within (i) the two-year period following the closing of the BHN transactions, if such sale or transfer would occur on a basis other than a predominately tax-deferred basis or (ii) the seven-year period following the closing date of the BHN transactions, if such sale or transfer would not occur on a predominately tax-deferred basis; and

 

    Charter Holdings will not issue any additional preferred units of any class having a liquidation preference equal or superior to that of the preferred units to be issued to A/N in connection to the BHN transactions.

Notwithstanding the second bullet above, pursuant to the terms of the preferred units, A/N will have a veto right over any such issuance for as long as A/N continues to hold at least 66 2/3% of the preferred units issued to A/N at the closing of the BHN transactions.

Limitation on New Charter Class B Common Stock Voting Rights

The amended and restated certificate of incorporation of New Charter will provide that the New Charter Class B common stock will not have voting rights on any matter to the extent that any A/N party (which includes A/N, any Newhouse person (as defined in the BHN/Liberty stockholders agreement) and any of their respective affiliates), or any group including one or more A/N parties, beneficially owns more than 49.5% of the outstanding New Charter Class A Common Stock. In addition, the amended and restated certificate of incorporation will also provide that New Charter Class B common stock and Charter Holdings units beneficially owned by any A/N party will not be convertible into or exchangeable for New Charter Class A common stock to the extent that such conversion or exchange would result in any A/N party, or any group including one or more A/N parties, having beneficial ownership of more than 49.5% of the outstanding New Charter Class A common stock.

Limitations on Share Acquisition and Ownership

The BHN/Liberty stockholders agreement provides that from and after the closing of the BHN transactions, unless an exemption or waiver is otherwise approved by the unaffiliated directors, each A/N party and each Liberty party (which includes Liberty Broadband and its affiliates) will not, and will use reasonable best efforts to cause its representatives not to, directly or indirectly, acquire (through beneficial ownership of or otherwise) any capital stock of New Charter or any subsidiary of New Charter or other derivative securities issued by New Charter or any subsidiary of New Charter, in each case in excess of the ownership cap.

 

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