not transfer at the time of the InterMedia closing because the necessary
regulatory approvals were still pending.
The systems acquired pursuant to these recent and pending acquisitions
served, in the aggregate, approximately 3.8 million customers as of June 30,
1999. In addition, we are negotiating with several other potential acquisition
and swapping candidates whose systems would further complement our regional
CHARTER COMMUNICATIONS, INC.
Charter Communications, Inc. was formed as a holding company in July 1999.
In connection with the offering, Charter Communications, Inc. will issue:
- 170,000,000 shares of Class A common stock in the offering, and an
additional 25,500,000 shares of Class A common stock if the underwriters
exercise their over-allotment option in full; and
- 50,000 shares of high vote Class B common stock to Mr. Allen.
Charter Communications, Inc. will use all of the net proceeds of the
offering and the sale of shares of Class B common stock to purchase Charter
Communications Holding Company membership units, except for a portion of the net
proceeds of the offering which will be retained by Charter Communications, Inc.
to acquire a portion of the equity interests in the Avalon acquisition. Charter
Communications, Inc. has committed to contribute these equity interests to
Charter Communications Holding Company in exchange for membership interests in
Charter Communications Holding Company. See "Use of Proceeds". Immediately
following the offering, Mr. Allen will control approximately 95% of the total
voting power of Charter Communications, Inc.'s outstanding capital stock and
will control Charter Communications Holding Company and its direct and indirect
The sale of shares of Class A common stock in the offering and the sale of
the shares of Class B common stock as described above will affect us in many
ways, including the following:
- Our Management. The current management agreement between Charter
Operating and Charter Investment, Inc. will be amended and assigned from
Charter Investment, Inc. to Charter Communications, Inc. Charter
Communications, Inc. and Charter Communications Holding Company will
enter into a new agreement relating to the management of the cable
systems of the subsidiaries of Charter Communications Holding Company. In
addition, Charter Investment, Inc. and Charter Communications, Inc. will
enter into a mutual services agreement. These agreements are described
under the heading "Certain Relationships and Related Transactions".
- Option Plan. After the offering, each membership unit in Charter
Communications Holding Company received as a result of an exercise of an
option issued under the Charter Communications Holding Company option
plan will automatically be exchanged for one share of Class A common
stock of Charter