conditions to the parties obligations to complete the mergers, the BHN transactions and/or the Liberty transactions, as applicable. However, no assurance can be given as to when, or if, the
mergers, the BHN transactions and/or the Liberty transactions will be completed. |
||Are the mergers expected to be taxable to TWC or Charter stockholders? |
||Charter and TWC intend for the payment of cash to a holder of shares of TWC common stock in the first merger to be treated as a distribution in partial redemption of such shares subject to the provisions of
Section 302(a) of the Code, though this treatment is not free from doubt. In such case, a U.S. holder of shares of TWC common stock will generally recognize gain or loss equal to the difference between the amount of cash received in the first
merger (including any cash received in lieu of fractional shares of TWC common stock) and the adjusted tax basis of the shares treated as exchanged for cash. However, U.S. holders who actually or constructively own New Charter Class A common
stock other than New Charter Class A common stock received pursuant to the second merger may be treated as having received a dividend instead of having sold or exchanged a portion of their shares of TWC common stock. The cash that a non-U.S.
holder of shares of TWC common stock receives generally will be subject to withholding of U.S. federal income tax at a rate of 30%, subject to reduction, exemption, or the availability of a refund if specific requirements are met. However,
alternative characterizations are possible. |
Charter and TWC intend for each of the second merger and the third merger to
qualify as a reorganization within the meaning of Section 368(a) of the Code. Accordingly, U.S. holders of shares of the surviving corporation of the first merger or shares of Charter Class A common stock will generally not be
subject to U.S. federal income tax as a result of the exchange of such shares for shares of New Charter Class A common stock (except in connection with cash received in lieu of a fractional share of New Charter Class A common stock in the
third merger) in the second merger and the third merger, respectively.
Holders of shares of TWC common stock and Charter Class A
common stock should read the section titled Material U.S. Federal Income Tax Consequences of the Mergers for a more complete discussion of the U.S. federal income tax consequences of the mergers. In addition, all holders of TWC
common stock and Charter Class A common stock are urged to consult with their tax advisors regarding the tax consequences of the mergers to them, including the effects of U.S. federal, state and local, non-U.S. and other tax laws.
||Do TWC or Charter stockholders have appraisal rights? |
||Subject to the closing of the first merger, record holders of TWC common stock who do not vote in favor of the approval of the adoption of the merger agreement and otherwise comply fully with the requirements and
procedures of Section 262 of the DGCL may exercise their rights of appraisal, which generally entitle stockholders to receive a cash payment equal to the fair value of their TWC common stock exclusive of any element of value arising from the
accomplishment or expectation of the mergers. A detailed description of the appraisal rights and procedures available to TWC stockholders is included in Dissenters Rights to Appraisal. The full text of Section 262 of the DGCL
is attached as Annex P to this joint proxy statement/prospectus. |
Charter stockholders do not have appraisal rights in
connection with the third merger or any other transaction described in this joint proxy statement/prospectus.