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|CHARTER COMMUNICATIONS, INC. /MO/ filed this Form PREM14A on 06/26/2015|
any equity securities of New Charter (other than in a capital raising transaction and other than any issuance pursuant to the exercise, conversion or exchange of any equity securities the issuance of which previously gave rise to a preemptive right under the BHN/Liberty stockholders agreement) and so long as Liberty has a 17.01% equity interest in New Charter, Liberty will have preemptive rights to purchase, in whole or in part, for cash, that number of new securities equal to the lesser of (x) the number of securities that will be determined based on Liberty Broadbands pro rata equity interest in New Charter (which is intended to allow Liberty Broadband to maintain its percentage ownership interest in New Charter after giving effect to the issuance) and (y) the number of securities that, after giving effect to the issuance, will result in Liberty Broadband having an equity interest in New Charter of 25.01%. Subject to Libertys exercise of its preemptive rights in respect of an issuance described in the foregoing sentence, A/N will also have certain preemptive rights in the case of such issuance so long as it holds an equity interest of 10% or more in New Charter.
In addition, if Liberty Broadbands or A/Ns equity interest or voting interest in New Charter falls below the thresholds specified in the BHN/Liberty stockholders agreement, the BHN/Liberty stockholders agreement allows Liberty Broadband and A/N in certain circumstances and subject to certain limitations to restore its respective equity interest or voting interest to the applicable thresholds.
New Charter Business Combination Provision
The amended and restated certificate of incorporation will provide that the business combinations provision to be set out in Article Eighth of the amended and restated certificate of incorporation will only be effective upon the termination of the BHN contribution agreement and not apply to (and will waive any noncompliance with such provision or any comparable predecessor provision) any transaction agreed or consummated prior to such time.
The BHN/Liberty stockholders agreement will terminate as follows:
Amendment and Modification
The BHN/Liberty stockholders agreement may be amended, modified and supplemented only by a written instrument signed by New Charter and, at any time that A/N has an equity interest equal to or greater than 11%, A/N, and by each other investor party (if any) that has an equity interest equal to or greater than 15%; however, any amendment, modification or supplement that would adversely affect an investor party will require the consent of such investor party. The authorization of any amendment, modification or supplement to the BHN/Liberty stockholders agreement by New Charter will require the prior approval of a majority of the unaffiliated directors.
The BHN/Liberty stockholders agreement further provides that the prior written consent of A/N (as the only holder of New Charter Class B common stock) shall be required for any amendment of the amended and restated