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>   226
 
tax-free simplification would not be available if the stock were purchased by a
limited liability company. After the closing of the Avalon acquisition and this
simplification transaction, Charter Communications, Inc. will be obligated to
contribute to Charter Communications Holding Company the equity interests in
Avalon Cable LLC, an indirect wholly owned subsidiary of Avalon Cable of
Michigan Holdings, Inc. that it will have purchased and any remaining cash
retained from the proceeds of the offering. If the Avalon acquisition does not
close on or before the termination date of the Avalon acquisition agreement
(currently March 31, 2000), Charter Communications, Inc. will contribute the
retained proceeds from the offering together with any earnings on the retained
proceeds to Charter Communications Holding Company. Concurrently with the
closing of the offering, Charter Communications Holding Company will issue to
Charter Communications, Inc. 170,000,000 Class B common membership units in
Charter Communications Holding Company in exchange for the contribution of
proceeds and the obligation to contribute the Avalon interests described above.
 
EXCHANGE AGREEMENTS
 
   
     Upon the closing of the offering, we will have entered into an agreement
permitting Vulcan Cable III Inc., Charter Investment, Inc. and any other
affiliate of Mr. Allen to exchange at any time on a one-for-one basis any or all
of their Charter Communications Holding Company common membership units for
shares of Class B common stock. This exchange may occur directly or, at the
election of the exchanging holder, indirectly through a tax-free reorganization
such as a share exchange or a statutory merger of any Allen-controlled entity
with and into Charter Communications, Inc. or a wholly owned subsidiary of
Charter Communications, Inc. In the case of an exchange in connection with a
tax-free share exchange or a statutory merger, shares of Class A common stock
held by Mr. Allen or the Allen-controlled entity will also be exchanged for
Class B common stock. Mr. Allen or his affiliates may own Class A common stock,
for example, if they were required to repurchase shares of Class A common stock
as a result of the exercise of put rights granted to the Rifkin, Falcon and
Bresnan sellers in respect of their shares of Class A common stock.
    
 
     Similar exchange agreements will also permit all other holders of Charter
Communications Holding Company common membership units, other than Charter
Communications, Inc., to exchange at any time on a one-for-one basis any or all
of their common membership units for shares of Class A common stock. These other
holders would include, for example, those sellers under the Falcon acquisition
and the Bresnan acquisition that receive common membership units of Charter
Communications Holding Company.
 
     Charter Communications Holding Company common membership units are
exchangeable at any time for shares of our Class A common stock or, in the case
of Mr. Allen and his affiliates, Class B common stock which is then convertible
into shares of Class A common stock. The exchange agreements, Mr. Kent's option
agreement and the Charter Communications Holding Company 1999 option plan will
state that common membership units are exchangeable for shares of common stock
at a value equal to the fair market value of the common membership units. The
exchange ratio of common
 
                                       223