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SEC Filings

CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 10-Q on 12/22/1999
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Options outstanding as of December 3, 1999, are as follows:

                                                                 OPTIONS OUTSTANDING                          EXERCISABLE
                                            ----------------------------------------------------------------  -----------  
                                                                                                REMAINING       NUMBER
                                            NUMBER OF         EXERCISE            TOTAL        CONTRACT LIFE       OF
                                             OPTIONS           PRICE             DOLLARS       (IN YEARS)       OPTIONS
                                             -------           -----             -------       ----------       -------
<S>                                     <C>                  <C>            <C>                <C>           <C> 
Outstanding as of
   January 1, 1999                            7,044,127      $   20.00      $    140,883            9.2 (1)    1,761,032
   February 9, 1999                           9,111,681          20.00           182,234                         130,000
   April 5, 1999                                473,000          20.73             9,805                              --
   November 8, 1999                           4,741,400          19.00            90,087                         200,000
Cancelled                                     (607,000)      20.00-20.73        (12,162)                              --
                                        ---------------      -----------    ------------         ------      -----------
Outstanding as of
   December 3, 1999                          20,763,208      $   19.79 (1)  $    410,847            9.4 (1)    2,091,032
                                        ===============      =========      ============         ======      ===========


(1) Weighted average

The Company follows Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" to account for the option plans. Stock option
compensation expense of $845 for the year end December 31, 1998 and $59.3
million for the nine months ended September 30, 1999, respectively, has been
recorded in the financial statements since the exercise prices were less than
the estimated fair values of the underlying membership interests on the date of
grant. Estimated fair values were determined by the Company using the valuation
inherent in the Paul Allen Transaction and valuations of public companies in the
cable television industry adjusted for factors specific to the Company.
Compensation expense is being accrued over the vesting period of each grant that
varies from four to five years. As of September 30, 1999, deferred compensation
remaining to be recognized in future periods totaled $104 million. No stock
option compensation expense will be recorded for the November 8, 1999 options
since the exercise price is equal to the estimated fair value of the underlying
membership interests on the date of grant. Since the membership units are
exchangeable into Class A common stock of Charter on a one-for-one basis, the
estimated fair value was equal to the initial offering price of Class A common



The Company is a party to lawsuits that arose in the ordinary course of
conducting its business. In the opinion of management, after consulting with
legal counsel, the outcome of these lawsuits will not have a material adverse
effect on the Company's consolidated financial position or results of

As previously disclosed in Charter's Form S-1 Registration Statement, the Rifkin
sellers who own preferred membership units of Charter Holdco, including those
sellers that exchanged their units for common stock of Charter in November 1999,
may have rescission rights arising out of possible violations of Section 5 of
the Securities Act of 1933 in connection with the offers and sales of these
equity interests. Accordingly, these equity interests have been classified as
short-term debt because these obligations could be put to the Company as
unsecured creditor claims.


The cable television industry is subject to extensive regulation at the federal,
local and, in some instances, state levels. The Cable Communications Policy Act
of 1984 (the "1984 Cable Act"), the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act" and together with the 1984 Cable
Act, the "Cable Acts"), and the Telecommunications Act of 1996 (the "1996
Telecom Act"), establish a national policy to guide the development and
regulation of cable systems. The Federal Communications Commission (FCC) has
principal responsibility for