434,800 options were granted on April 5, 1999 with an exercise price of $20.73.
Of the options granted on February 9, 1999, 65,000 options have vested and an
additional 65,000 options will vest on the date of the closing of this offering.
Of the remaining 8,641,481 options, one-fourth vest on April 3, 2000 and the
remainder vest 1/45 on each monthly anniversary following April 3, 2000.
One-fourth of the options granted on April 5, 1999 vest on the 15-month
anniversary from April 5, 1999, with the remainder vesting 1/45 on each monthly
anniversary for 45 months following the 15-month anniversary. The options expire
after ten years from the date of grant. Under the plan, the plan administrator
has the discretion to accelerate the vesting of any options.
Charter Communications Holding Company intends to issue on the date of this
prospectus up to 5,000,000 additional options under the plan. The exercise price
for these options will be equal to the initial public offering price per share
of Class A common stock in this offering.
Under the terms of the plan, following consummation of the offering, each
membership unit held as a result of exercise of options will be exchanged
automatically for shares of Class A common stock on a one-for-one basis.
Exchanges will occur on a one-for-one basis, as described under "Description of
Capital Stock and Membership Units -- Exchange Agreements".
Any unvested options issued under the plan vest immediately upon a change
of control of Charter Communications Holding Company. Options will not vest upon
a change of control, however, to the extent that any such acceleration of
vesting would result in the disallowance of specified tax deductions that would
otherwise be available to Charter Communications Holding Company or any of its
affiliates or to the extent that any optionee would be liable for any excise tax
under a specified section of the tax code. In the plan, a change of control
(1) a sale of more than 49.9% of the outstanding membership units in
Charter Communications Holding Company, except where Mr. Allen and his
affiliates retain effective voting control of Charter Communications
(2) a merger or consolidation of Charter Communications Holding Company
with or into any other corporation or entity, except where Mr. Allen and
his affiliates retain effective voting control of Charter Communications
Holding Company; or
(3) any other transactions or event, including a sale of the assets of
Charter Communications Holding Company, that results in Mr. Allen holding
less than 50.1% of the voting power of the surviving entity, except where
Mr. Allen and his affiliates retain effective voting control of Charter
Communications Holding Company.
The sale of Class A common stock pursuant to this prospectus is not a change of
control under the option plan.
If an optionee's employment with or service to Charter Communications
Holding Company or its affiliates is terminated other than for cause, the
optionee has the right to exercise any vested options within sixty days of the
termination of employment. After this sixty-day period, all vested and unvested
options held by the optionee are automatically canceled. If an optionee's
employment or service is terminated for cause,