Print Page  Close Window

SEC Filings

S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/04/1999
Entire Document
 
<PAGE>   115
 
an ongoing basis. In order to attract and retain high quality managers at the
local and regional operating levels, we provide a high degree of operational
autonomy and accountability and cash and equity-based compensation. Charter
Communications Holding Company has adopted a plan to distribute to employees and
consultants, including members of corporate management and key regional and
system-level management personnel, options exercisable for up to 25,009,798
Charter Communications Holding Company membership units.
 
     CONCENTRATE OUR SYSTEMS IN TIGHTER GEOGRAPHICAL CLUSTERS. To improve
operating margins and increase operating efficiencies, we regularly seek to
improve the geographic clustering of our cable systems by selectively swapping
our cable systems for systems of other cable operators or acquiring systems in
close proximity to our systems. We believe that by concentrating our systems in
clusters, we will be able to generate higher growth in revenues and operating
cash flow. Clustering enables us to consolidate headends and spread fixed costs
over a larger subscriber base. We are negotiating with several other cable
operators whose systems we consider to be potential acquisition or swapping
candidates.
 
ORGANIZATIONAL STRUCTURE
 
     Each of the entities in our organizational structure and how it relates to
us is described below. In our discussion of the following entities, we make the
same assumptions as described on page 4 with respect to our organizational
chart.
 
     CHARTER COMMUNICATIONS, INC.   Charter Communications, Inc. is a holding
company whose principal asset after completion of the offering will be an
approximate 31% equity interest and a 100% voting interest in Charter
Communications Holding Company. Charter Communications, Inc.'s only business
will be acting as the sole manager of Charter Communications Holding Company and
its subsidiaries. As sole manager of Charter Communications Holding Company,
Charter Communications, Inc. will control the affairs of Charter Communications
Holding Company and its subsidiaries. Immediately following the offering, the
holders of the Class A common stock will own more than 99.9% of Charter
Communications, Inc.'s outstanding capital stock. However, Mr. Allen, through
his ownership of Charter Communications, Inc.'s high vote Class B common stock
and his indirect ownership of Charter Communications Holding Company membership
units, will control approximately 95% of the voting power of all of Charter
Communications, Inc.'s capital stock immediately following the offering.
Accordingly, Mr. Allen will be able to elect all of Charter Communications,
Inc.'s directors.
 
     VULCAN CABLE III INC. In August 1999, Mr. Allen, through Vulcan Cable III
Inc., contributed to Charter Communications Holding Company $500 million in cash
and, in September 1999, an additional $825 million, of which approximately
$644.3 million was in cash and approximately $180.7 million was in the form of
equity interests acquired by Vulcan Cable III Inc. in connection with the Rifkin
acquisition, in each case in exchange for membership units at a price per
membership unit of $20.73. In addition, Mr. Allen, through Vulcan Cable III
Inc., has agreed to make a $750 million equity
 
                                       112