SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): November 30, 2009
Charter Communications,
Inc.
(Exact name of registrant as
specified in its charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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000-27927
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43-1857213
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(Commission File
Number)
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(I.R.S. Employer
Identification Number)
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12405 Powerscourt
Drive
St. Louis, Missouri
63131
(Address of principal executive
offices including zip code)
(314)
965-0555
(Registrant's telephone number,
including area code)
Not
Applicable
(Former name or former address, if
changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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EXPLANATORY
NOTE
As
previously reported, on March 27, 2009 (the “Petition Date”),
Charter Communications, Inc. (the “Company” or “CCI”), and certain of
its subsidiaries and affiliates (collectively, the “Debtors”) filed
voluntary petitions in the United States Bankruptcy Court for the Southern
District of New York (the “Bankruptcy Court”)
seeking relief under the provisions of chapter 11 of Title 11 of the United
States Code (the “Bankruptcy
Code”). The chapter 11 cases were consolidated for the purpose of
joint administration under the caption In re Charter Communications, Inc., et
al., Case No. 09-11435 (JMP) (the “Chapter 11 Cases”).
On
November 17, 2009 (the “Confirmation Date”),
the Bankruptcy Court entered an order (the “Confirmation Order”)
confirming the Debtors’ Joint Plan of Reorganization, as amended, pursuant to
chapter 11 of the Bankruptcy Code, which was originally filed with the
Bankruptcy Court on the Petition Date and supplemented by the Supplement to
Debtors’ Joint Plan of Reorganization pursuant to chapter 11 of the Bankruptcy
Code filed with the Bankruptcy Court on the Petition Date (as so amended and
supplemented, the “Plan”).
On
November 30, 2009 (the “Effective Date”), the
Debtors consummated their reorganization under the Bankruptcy Code and the Plan
became effective. The distributions of securities under the Plan of
the Debtors described in this Current Report on Form 8-K were made on the
Effective Date. Capitalized terms used but not defined in this Form 8-K have the
meanings set forth in the Plan.
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Agreements
Relating to the Debtors’ Securities
New
CCH II Notes
On the Effective Date, CCH II, LLC
(“CCH II”) and
CCH II Capital Corp. issued $1.77 billion in aggregate principal amount of new
13.5% Senior Notes (the “New CCH II Notes”))
pursuant to the indenture, dated as of the Effective Date, by and among CCH II,
CCH II Capital Corp. and the Bank of New York Mellon Trust Company N.A., as
trustee (the "Indenture"). The New CCH II Notes will pay interest in
cash semi-annually in arrears on February 15 and August 15 of each year
commencing on February 15, 2010 at the rate of 13.5% per annum and will be
unsecured. The New CCH II Notes will mature on November 30,
2016.
Redemption
At any
time prior to the third anniversary of their issuance, CCH II will be permitted
to redeem up to 35% of the New CCH II Notes with the proceeds of an equity
offering, for cash equal to 113.5% of the then-outstanding principal amount of
the New CCH II Notes being redeemed, plus accrued and unpaid
interest.
At or any
time prior to the third anniversary of their issuance, CCH II will be permitted
to redeem the New CCH II Notes, in whole or in part, at 100 % of the
principal amount outstanding plus a “make-whole” premium calculated based on a
discount rate of the Treasury rate plus 50 basis points, plus accrued and unpaid
interest.
On or
after the third anniversary of their issuance, the New CCH II Notes will be
subject to redemption by CCH II for cash equal to 106.75% of the principal
amount of the New CCH II Notes being redeemed for redemptions made during the
fourth year following their issuance, 103.375% for redemptions made during the
fifth year following their issuance, 101.6875% for redemptions made during the
sixth year following their issuance, and 100.000% for redemptions made
thereafter, in each case, together with accrued and unpaid
interest.
Change
of Control Offer
Upon the
occurrence of a change of control, as defined in the Indenture, each holder of
New CCH II Notes will have the right to require CCH II to repurchase
all or any part of that holder’s New CCH II Notes at a repurchase price
equal to 101% of the aggregate principal amount of the New CCH II Notes
repurchased plus accrued and unpaid interest thereon, if any, to the date of
purchase.
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Restrictive
Covenants
The
Indenture contains restrictions on the ability of CCH II and CCH II’s
restricted subsidiaries to, without limitation: (i) incur indebtedness,
(ii) create liens, (iii) pay dividends or make distributions in
respect of capital stock and other restricted payments, (iv) make
investments, (v) sell assets, (vi) create restrictions on the ability
of restricted subsidiaries to make certain payments and asset transfers,
(vii) enter into sale-leaseback transactions, (viii) enter into
transactions with affiliates, (ix) consolidate, merge or sell all or
substantially all of their assets or (x) engage in certain types of transactions
with respect to indebtedness of parents and subsidiaries. However,
such covenants will be subject to a number of important qualifications and
exceptions including, without limitation, provisions allowing CCH II and
its restricted subsidiaries to incur additional indebtedness as long as
CCH II’s leverage ratio is not greater than 5.75 to 1.0. In
addition, CCH II will be permitted to incur up to $1 billion of additional
indebtedness under one or more credit facilities and will be permitted to incur
another $300 million under a “general” exception.
Events
of Default
Holders
of at least 25% in the aggregate of the New CCH II Notes then outstanding
may accelerate the obligations due under the New CCH II Notes upon any of the
following circumstances: (i) default for 30 consecutive days in the payment when
due of interest on the New CCH II Notes; (ii) default in the payment when
due of principal of or premium, if any, on the New CCH II Notes; (iii) the
failure to comply with the Indenture’s change of control or merger covenants;
(iv) the failure to comply with other covenants for 30 consecutive days after
notice is given by holders of at least 25% of the aggregate principal amount of
the New CCH II Notes then outstanding; (v) the occurrence of a payment
default or acceleration of indebtedness in excess of $100 million under any
other debt instrument of CCH II or its restricted subsidiaries; or (vi) failure
to pay a judgment in excess of $100 million against CCH II or its
restricted subsidiaries which judgment is not paid, discharged or stayed for 60
days. In addition, in case of certain events of bankruptcy, insolvency, or
liquidation with respect to CCH II, all outstanding New CCH II Notes will become
due and payable immediately without further action or notice.
Amendment,
Supplement and Waiver
Without
the consent of holders of the New CCH II Notes, CCH II and the trustee
may amend or supplement the Indenture or the New CCH II Notes to (i) cure any
ambiguity, defect or inconsistency; (ii) provide for uncertificated New CCH II
Notes in addition to or in place of certificated New CCH II Notes; (iii) provide
for or confirm the issuance of additional New CCH II Notes or any exchange
notes; (iv) provide for the assumption of obligations under the New CCH II Notes
in the case of a merger or consolidation or sale of all or substantially all of
the assets of CCH II and its restricted subsidiaries; (v) make any change
that would provide any additional rights or benefits to the holders of New
CCH II Notes or that does not adversely affect the legal rights of holders
of the New CCH II Notes under the Indenture; (vi) release any subsidiary
guarantee in accordance with the provisions of the Indenture; (vii) add a
guarantor or a note guarantee; or (viii) comply with requirements of the
Securities and Exchange Commission (the “SEC”) in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act of 1939, as amended, or otherwise as necessary to comply with applicable
law.
Except as
provided in the next paragraph, the Indenture or the New CCH II Notes may
be amended or supplemented with the consent of the holders of at least a
majority in aggregate principal amount of the New CCH II Notes then
outstanding.
Without the consent of each holder of
New CCH II Notes affected thereby, an amendment, supplement or waiver may
not (with respect to any New CCH II Notes held by such holder): (i) reduce
the principal amount of such notes; (ii) change the fixed maturity of such notes
or reduce the premium payable upon redemption of such notes; (iii) reduce the
rate of or extend the time for payment of interest on such notes; (iv) waive a
default or an event of default in the payment of principal of, or premium, if
any, or interest on such notes (except a rescission of acceleration of such
notes by the holders of at least a majority in aggregate principal amount of
such notes and a waiver of the payment default that resulted from such
acceleration); (v) make such notes payable in money other than that stated in
such notes; (vi) make any change in the provisions of the Indenture relating to
waivers of past defaults applicable to any notes or the rights of holders
thereof to receive payments of principal of, or premium, if any, or interest on
such notes; (vii) waive certain redemption payments with respect to such notes;
or (viii) make any changes to the provisions of the Indenture relating to
amendments and waivers requiring the consent of holders.
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The foregoing description of the
Indenture does not purport to be complete and is qualified in its entirety by
reference to the full text of such agreement, a copy of which is attached as
Exhibit 10.1 to this report and incorporated herein by
reference.
Warrant Agreements
As of the
Effective Date, the Company issued CIH Warrants (as defined under Item 3.02
hereof) to purchase up to an aggregate of approximately 6.4 million shares of
New Class A Stock (as defined under Item 3.02 hereof) to holders of CIH
Notes. In connection with the issuance of the CIH Warrants, the Company entered
into a warrant agreement, dated as of the Effective Date (the “CIH Warrant
Agreement”), with Mellon Investor Services LLC, as warrant agent. Subject
to the terms of the CIH Warrant Agreement, the warrant holders are entitled to
purchase up to approximately 6.4 million shares of New Class AStock at an
initial exercise price of $46.86 per share. The CIH Warrants have a
five-year term and will expire at 5:00 p.m., New York City time, on
November 30, 2014. A holder may exercise CIH Warrants by paying the
applicable exercise price in cash or on a cashless basis. The CIH Warrants are
freely transferable by the holder thereof.
As of the
Effective Date, the Company issued CCH Warrants (as defined under Item 3.02
hereof) to purchase up to an aggregate of approximately 1.3 million shares of
New Class A Stock to holders of CCH Notes. In connection with the issuance of
the CCH Warrants, the Company entered into a warrant agreement, dated as of the
Effective Date (the “CCH Warrant
Agreement”), with Mellon Investor Services LLC, as warrant agent. Subject
to the terms of the CCH Warrant Agreement, the warrant holders are entitled to
purchase up to approximately 1.3 million shares of New Class A Stock at an
initial exercise price of $51.28 per share. The CCH Warrants have a
five-year term and will expire at 5:00 p.m., New York City time, on
November 30, 2014. A holder may exercise CCH Warrants by paying the
applicable exercise price in cash or on a cashless basis. The CCH Warrants are
freely transferable by the holder thereof.
As of the
Effective Date, the Company issued CII Warrants (as defined under Item 3.02
hereof) to purchase up to an aggregate of approximately 4.7 million shares of
New Class A Stock to Charter Investment, Inc. ("CII"), as designee of Mr. Paul
G. Allen (or his designees) as part of the CII Settlement. In connection with
the issuance of the CII Warrants, the Company entered into a warrant agreement,
dated as of the Effective Date (the “CII Warrant
Agreement”), with Mellon Investor Services LLC, as warrant agent. Subject
to the terms of the CII Warrant Agreement, the warrant holders are entitled to
purchase up to approximately 4.7 million shares of New Class A Stock at an
initial exercise price of $19.80 per share. The CII Warrants have a
seven-year term and will expire at 5:00 p.m., New York City time, on
November 30, 2016. A holder may exercise CII Warrants by paying the
applicable exercise price in cash or on a cashless basis. The CII Warrants are
restricted and not freely transferable by the holder thereof.
The
number of shares of New Class A Stock issuable upon exercise of the CIH
Warrants, the CCH Warrants and the CII Warrants (together, the “Warrants”) and the
exercise prices of the Warrants will be adjusted in connection with any dividend
or distribution of New Class A Stock, assets or cash (other than any regular
cash dividend declared or paid after the second anniversary of the Effective
Date not to exceed in any fiscal year 45% of the consolidated net income of the
Company and its consolidated subsidiaries for the preceding fiscal year), or any
subdivision or combination of the New Class A Stock. Additionally, if any
transaction or event occurs in which all or substantially all of the outstanding
New Class A Stock is converted into, exchanged for, or the holders thereof are
otherwise entitled to receive on account thereof stock, other securities, cash
or assets (each, a “Fundamental Change
Transaction”) the holder of each Warrant outstanding immediately prior to
the occurrence of such Fundamental Change Transaction shall have the right to
receive upon exercise of the applicable Warrant the kind and amount of stock,
other securities, cash and/or assets that such holder would have received if
such Warrant had been exercised.
The
foregoing descriptions of the CIH Warrant Agreement, the CCH Warrant Agreement
and the CII Warrant Agreement do not purport to be complete and are qualified in
their entirety by reference to the full text of such agreements, copies of which
are attached as Exhibits 4.1, 4.2 and 4.3 to this report and incorporated herein
by reference.
Registration Rights Agreement for
Equity
In connection with the purchase of
shares of New Class A Stock or shares of New Class A Stock issued or
issuable upon (i) the conversion of shares of the New Class B Stock (as defined
under Item 3.02 hereof), (ii) the exchange of membership units pursuant to the
Holdco Exchange Agreement (as defined below), and (iii) the exercise of the CII
Warrants (collectively, the “Registrable Equity
Securities”), the Company has entered into a Registration Rights
Agreement (the "Equity Registration Rights Agreement") with
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certain
members of the Crossover Committee, Mr. Allen, and CII (collectively,
the “Holders of Equity
Rights”). Pursuant to the Equity Registration Rights Agreement, among
other things, the Company is required to file a registration statement for a
shelf registration on Form S-1 (the “Form S-1 Shelf”)
covering the resale of the Registrable Equity Securities on a delayed or
continuous basis prior to December 31, 2009 to effect the registration of the
resale of the Registrable Equity Securities issued to the Holders of Equity
Rights. The Company is required to use commercially reasonable efforts to cause
the Form S-1 Shelf to become effective by June 30, 2010.
The Company is required use its
commercially reasonable efforts to convert the Form S-1 Shelf to a
registration statement for a shelf registration on Form S-3 (the “Form S-3 Shelf”, and
together with the Form S-1 Shelf, the “Shelf”) as soon as
practicable after the Company is eligible to use Form S-3.
The Company is required to notify each
holder of Registrable Equity Securities of the effectiveness of each
registration statement and prepare and file with the SEC such amendments and
supplements to such registration statements as may be necessary to keep such
registration statements effective for a period ending on the date on which all
Registrable Equity Securities have been sold under the registration statement or
have otherwise ceased to be Registrable Equity Securities.
Upon the Company becoming a well-known
seasoned issuer, the Company is required to promptly register the sale of all of
the Registrable Equity Securities under an automatic shelf registration
statement, and to cause such registration statement to remain effective
thereafter until there are no longer Registrable Equity Securities.
In addition, if the Company proposes to
register any of its securities, or proposes to offer any of its New Class A
Stock under the Securities Act of 1933, as amended (the “Securities Act”), the
Company is required, subject to certain conditions, to include all Registrable
Equity Securities with respect to which the Company has received written
requests for inclusion.
The rights of a holder of Registrable
Equity Securities may be transferred, assigned or otherwise conveyed on a pro
rata basis to any transferee or assignee of such Registrable Equity
Securities. The Company will be responsible for expenses relating to
the registrations contemplated by the Equity Registration Rights
Agreement.
The registration rights granted in the
Equity Registration Rights Agreement are subject to customary indemnification
and contribution provisions, as well as customary restrictions such as minimums,
blackout periods and, if a registration is for an underwritten offering,
limitations on the number of shares to be included in the underwritten offering
imposed by the managing underwriter. In addition, securities held by holders of
less than 1% of the New Class A Stock shall not be entitled to registration
rights.
The foregoing description of the Equity
Registration Rights Agreement does not purport to be complete and is qualified
in its entirety by reference to the full text of such agreement, a copy of which
is attached as Exhibit 10.2 to this report and incorporated herein by
reference.
Registration Rights Agreement for
Debt
In
connection with the issuance of the New CCH II Notes, CCH II, CCH II Capital
Corp. (together with CCH II, the “Issuers”), certain
holders of the Crossover Committee and CII entered into an Exchange and
Registration Rights Agreement (the “Exchange Registration Rights
Agreement”). Pursuant to the Exchange Registration Rights Agreement,
among other things, the Issuers agreed to use their commercially reasonable
efforts to file under the Securities Act, on or prior to January 15, 2010, a
registration statement relating to an offer to exchange (such registration
statement, the “Exchange Offer Registration
Statement”, and such offer, the “Exchange Offer”) all
New CCH II Notes that are Definitive Notes (as defined in the Indenture) at the
time the Exchange Offer Registration Statement is declared effective by the SEC,
for a like aggregate principal amount of New CCH II Notes issued by the Issuers,
substantially identical in all material respects to the New CCH II Notes (except
that such New CCH II Notes will not contain terms with respect to transfer
restrictions) (the “Exchange Notes”), and
use their commercially reasonable efforts to cause the Exchange Offer
Registration Statement to be declared effective under the Securities Act as soon
as practicable but in no event later than June 30, 2010.
In
addition, the Issuers have agreed to use their commercially reasonable efforts
to, as soon as practicable after the Effective Date, but in no event later than
June 30, 2010, file a shelf registration statement providing for the
registration of, and the sale on a continuous or delayed basis by holders of,
all the Registrable Securities (as defined
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in the
Exchange Registration Rights Agreement) held by Restricted Holders (as defined
in the Exchange Registration Rights Agreement), and to cause such registration
statement to be declared effective by the SEC as soon as practicable but in no
event later than ninety (90) days after such obligation to file arises and to
keep such registration statement continuously effective for a period ending at
such time at there are no longer Registratble Securities
outstanding.
In
addition, the Issuers agreed that if (i) on or prior to the time the Exchange
Offer is completed, (a) existing law or SEC policy or interpretations are
changed such that the Exchange Notes received by holders, other than Restricted
Holders in the Exchange Offer in exchange for Registrable Securities are not
transferable by such holder without restriction under the Securities Act, or
(b) the SEC does not permit the Exchange Offer to be consummated because
Registrable Securities have been registered on the shelf registration statement,
(ii) after completion of the Exchange Offer, one or more Restricted Holders give
written notice to the Issuers that they hold Exchange Notes that continue to be
Registrable Securities, or (iii) the Exchange Offer has not been completed by
April 15, 2010, the Issuers shall use their commercially reasonable efforts to
file a shelf registration statement on the appropriate form (or amend the
existing shelf registration statement) to register for resale on a delayed or
continuous basis any Registrable Securities not already registered for resale as
soon as practicable, but in no event more than forty-five (45) days after the
occurrence of one of the events set forth in clauses (i), (ii), or (iii)
immediately above, and have such registration statement be declared effective as
soon as practicable, but in no event more than one-hundred fifty (150) days
after the occurrence of such event and keep such registration statement
continuously effective for a period ending at such time as there are no longer
any Registrable Securities outstanding.
The
Exchange Registration Rights Agreement contains registration default provisions.
If the Issuers fails to comply with certain obligations under the Registration
Rights Agreement, they will be required to pay liquidated damages to the
applicable holders of the New CCH II Notes. Subject to certain conditions, as
liquidated damages for a registration default the Issuers shall pay special
interest, in addition to the base interest, that accrues on the aggregate
principal amount of the outstanding Transfer Restricted Notes (as defined in the
Exchange Registration Rights Agreement) affected by such registration default at
a per annum rate of 0.25% for the first ninety (90) days of the registration
default period, and at a per annum rate of 0.50% thereafter for the remaining
portion of the registration default period.
The
Company will be responsible for expenses relating to the registrations
contemplated by the Exchange Registration Rights Agreement. The registration
rights granted in the Exchange Registration Rights Agreement are subject to
customary indemnification and contribution provisions.
The
foregoing description of the Exchange Registration Rights Agreement does not
purport to be complete and is qualified in its entirety by reference to the full
text of such agreement, a copy of which is attached as Exhibit 10.3 to this
report and incorporated herein by reference.
Holdco LLC Agreement
On the Effective Date, the Company,
CII and Charter Communications Holding
Company, LLC (“Holdco”) entered into
an Amended and Restated Limited Liability Company Agreement of Holdco (the
“Holdco LLC
Agreement”), pursuant to which the Company is the manager of Holdco and
has the authority, subject to certain limitations, to manage the business of
Holdco, including to appoint directors to Holdco’s board of
directors.
The foregoing description of the Holdco
LLC Agreement does not purport to be complete and is qualified in its entirety
by reference to the full text of such agreement, a copy of which is attached as
Exhibit 10.4 to this report and incorporated herein by
reference.
Holdco Exchange Agreement
On the Effective Date, the Company,
Holdco, CII and Mr. Allen entered into an exchange agreement (the “Holdco Exchange
Agreement”), pursuant to which Mr. Allen and certain persons and entities
affiliated with Mr. Allen (together, the “Allen Entities”) have
the right and option, at any time and from time to time on or before November
30, 2014, to require the Company to (i) exchange all or any portion of their
membership units in Holdco for $1,000 in cash and approximately 1.1 million
shares of New Class A Stock in a taxable
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transaction,
(ii) exchange 100% of the equity in such Allen Entity for $1,000 in cash and
approximately 1.1 million shares of New Class A Stock in a taxable transaction,
or (iii) permit such Allen Entity to merge with and into the Company, or a
wholly-owned subsidiary of the Company, or undertake tax-free transactions
similar to the taxable transactions in clauses (i) and (ii), provided that the
exchange rights described in clauses (ii) and (iii) are subject to certain
limitations. The number of shares of New Class A Stock that an Allen
Entity receives is subject to certain adjustments, including for certain
distributions received from Holdco prior to the date the option to exchange is
exercised and for certain distributions made by the Company to holders of its
New Class A Stock. In addition, no sooner than at least 120 days
following the Effective Date, in the event that a transaction that would
constitute a Change of Control (as defined in the Lock-Up Agreement) is approved
by a majority of the members of the Board of Directors of the Company not
affiliated with the person(s) proposing such transactions, the Company will have
the right to require the Allen Entities to effect an exchange transaction
of the type elected by the Allen Entities from subclauses (i), (ii) or (iii)
above, which election is subject to certain limitations.
The foregoing description of the Holdco
Exchange Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of such agreement, a copy of which is
attached as Exhibit 10.5 to this report and incorporated herein by
reference.
Lock-Up Agreement
On the Effective Date, the Company, CII
and Mr. Allen entered into a lock up agreement (the “Lock-Up Agreement”)
pursuant to which Mr. Allen and any permitted affiliate of Mr. Allen that will
hold shares of New Class B Stock, from and after the Effective Date to but not
including the earliest to occur of (i) September 15, 2014, (ii) the repayment,
replacement, refinancing or substantial modification, including any waiver, to
the change of control provisions of the CCO Credit Facility and (iii) a Change
of Control (as defined in the Lock-Up Agreement), Mr. Allen and/or any such
permitted affiliate shall not transfer or sell shares of New Class B Stock
received by such person under the Plan or convert shares of New Class B Stock
received by such person under the Plan into New Class A Stock except to Mr.
Allen and/or such permitted affiliates.
The foregoing description of the
Lock-Up Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of such agreement, a copy of which is
attached as Exhibit 10.6 to this report and incorporated herein by
reference.
ITEM
1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
In accordance with the Plan, on the
Effective Date all of the obligations of CCI and its subsidiaries with respect
to the following indentures were terminated and the respective notes and
debentures issued under each such indenture were cancelled:
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5.875%
convertible senior notes due 2009 of the
Company;
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6.50%
convertible senior notes due 2027 of the
Company;
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10.000%
senior notes due 2009 of Charter Communications Holdings,
LLC;
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10.750%
senior notes due 2009 of Charter Communications Holdings,
LLC;
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9.625%
senior notes due 2009 of Charter Communications Holdings,
LLC;
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10.250%
senior notes due 2010 of Charter Communications Holdings,
LLC;
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11.750%
senior discount notes due 2010 of Charter Communications Holdings,
LLC;
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11.125%
senior notes due 2011 of Charter Communications Holdings,
LLC;
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13.500%
senior discount notes due 2011 of Charter Communications Holdings,
LLC;
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9.920%
senior discount notes due 2011 of Charter Communications Holdings,
LLC;
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10.000%
senior notes due 2011 of Charter Communications Holdings,
LLC;
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11.750%
senior discount notes due 2011 of Charter Communications Holdings,
LLC;
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12.125%
senior discount notes due 2012 of Charter Communications Holdings,
LLC;
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11.125%
senior notes due 2014 of CCH I Holdings,
LLC;
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13.500%
senior discount notes due 2014 of CCH I Holdings,
LLC;
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9.920%
senior discount notes due 2014 of CCH I Holdings,
LLC;
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10.000%
senior notes due 2014 of CCH I Holdings,
LLC;
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11.750%
senior discount notes due 2014 of CCH I Holdings,
LLC;
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12.125%
senior discount notes due 2015 of CCH I Holdings,
LLC;
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11.00%
senior notes due 2015 of CCH I,
LLC;
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10.250%
senior notes due 2010 of CCH II, LLC;
and
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10.250%
senior notes due 2013 of CCH II,
LLC.
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In connection with CCI’s
reorganization and emergence from bankruptcy, all shares of common stock of CCI
outstanding prior to the Effective Date (the “Old Common Stock”)
and all Preferred Share Purchase Rights were cancelled pursuant to the
Plan. Accordingly, upon the Effective Date, CCI’s equity incentive
plans in effect prior to the Effective Date, and all awards granted under such
plans, were terminated. Below is a list of equity incentive plans and
other benefit plans that were terminated on the Effective Date:
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Charter
Communications Holdings, LLC 1999 Option Plan;
and
|
|
·
|
Charter
Communications, Inc. 2001 Stock Incentive
Plan.
|
ITEM
2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER
AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information set forth under “Item
1.01. Entry Into a Material Definitive Agreement - Agreements Relating to
Debtors’ Securities - New CCH II Notes” is incorporated by reference into this
Item 2.03.
ITEM
3.02 UNREGISTERED SALES OF EQUITY SECURITIES
On the Effective Date, all existing
shares of Old Common Stock were cancelled pursuant to the Plan. In
addition, on the Effective Date, CCI issued (i) approximately 21.1 million
shares of Class A common stock pro rata to holder of CCH I Notes Claims (the
“New Class A Global
Stock”); (ii) approximately 86.6 million shares of Class A common stock
to creditors that exercised rights received in a rights offering; (iii)
approximately 2.1 million shares of Class A common stock to the Excess Backstop
Parties for exercising the Overallotment Option (collectively with the common
stock issued in (ii) of this paragraph, the “New Class A Certificated
Stock”, and together with the New Class A Global Stock, the “New Class A Stock”);
(iv) approximately 2.2 million shares of New Class B Stock to CII, which shares
represent at least 35% of the voting power of the capital stock of the
Company on a fully diluted basis (the “New Class B Stock,”
and together with the New Class A Stock, the “New Common Stock”);
(v) approximately 5.5 million share of preferred stock having an aggregate
liquidation preference of $138 million to holders of CCI Notes (the “Preferred Stock”);
(vi) warrants to purchase approximately 4.7 million shares of New Class A
Stock to CII with an exercise price based on a total equity value of the Company
equal to the Implied Plan Value less the Warrant Value plus the gross proceeds
of the Rights Offering, and an expiration date that is seven years from the
Effective Date (the “CII Warrants”); (vii)
warrants to purchase approximately 6.4 million shares of New Class A Stock to
holders of CIH Notes with an exercise price based on a total equity value of the
Company of $5.3 billion, and an expiration date that is five years from the
Effective Date (the “CIH Warrants”); and
(viii) warrants to purchase approximately 1.3 million shares of New Class A
Stock to holders of CCH Notes with an exercise price based on a total equity
value of the Company of $5.8 billion, and an expiration date that is five years
from the Effective Date (the “CCH
Warrants”). Based on the Plan and Confirmation Order from the
Bankruptcy Court, the issuance of shares of New Class A Global Stock, the
Preferred Stock, the CIH Warrant (including shares of common stock issuable upon
exercise thereof) and the CCH Warrants (including shares of common stock issued
upon exercise thereof) described in the preceding sentence are exempt from
registration requirements of the Securities Act, in reliance on Section 1145 of
the Bankruptcy Code; shares of New Class B Stock, New Class A Certificated
Stock and CII Warrants described in the preceding sentence are exempt from
registration requirements of the Act in reliance on Section 4(2) of the
Securities Act.
8
ITEM
3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY
HOLDERS.
The information set forth under “Item
5.03. Amendments to Articles of Incorporation or Bylaws, Change in Fiscal Year”
is incorporated by reference into this Item 3.03.
ITEM
5.02 DEPARTURE OF DIRECTORS; CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
Departure
of Directors
On the Effective Date, the following
directors have departed the Company’s board of directors in connection with the
Company’s emergence from chapter 11 proceedings and pursuant to the
Plan: Paul G. Allen; Rajive Johri; Robert P. May; David C. Merritt;
Jo Lynn Allen; John H. Tory; and Larry W. Wangberg.
Election
of Directors
On the Effective Date, pursuant to the
Plan, the Company’s board of directors was reconstituted to consist of (i) Eric
L. Zinterhofer (who will serve as Chairman), (ii) Neil Smit (the current Chief
Executive Officer of the Company), (iii) W. Lance Conn, (iv) Darren
Glatt, (v) Bruce A. Karsh, (vi) John D. Markley, Jr., (vii) Bill McGrath, and
(viii) Christopher M. Temple.
The Company’s Amended and Restated
Certificate of Incorporation provides that the Company’s board of directors will
be fixed at 11 members. Pursuant to the Plan, each holder of
10% of more of the voting power of the Company on the Effective Date (a “10% Holder”) has the
right to appoint one member of the Company’s initial board of directors on the
Effective Date. As a result, on December 2, 2009, Franklin Advisors,
Inc. (“Franklin”), a 10%
Holder, appointed Robert Cohn to the Company’s board of directors effective
December 1, 2009. A press release announcing Mr. Cohn’s election is
attached as Exhibit 99.2. Mr. Cohn has not been elected to any
committees of the Company’s board of directors at this time.
The final two members of the board of
directors are to be elected by a majority vote of the nine current board members
after the appointment of the Franklin appointee.
Amendments
to Employment Agreements
Pursuant to the Plan, on the Effective
Date, certain officers entered into amendments to their employment agreements,
including the following named executive officers: Neil Smit, Eloise Schmitz, M.
Fawaz and Grier Raclin.
Mr. Smit’s amendment provides that (i)
the Company waives the clawback provision of the retention bonus provision in
his employment agreement, and (ii) Mr. Smit shall not be entitled to an Annual
Long-Term Incentive Grant for 2009 due to his receiving the full $6,000,000
award made to him under the Restructuring Value Program pursuant to the
Company’s Value Creation Plan adopted by the Company on March 12, 2009 pursuant
to the Plan (the “VCP”). Mr.
Smit’s amendment to his employment agreement is filed herewith as Exhibit
10.7.
The amendments to the employment
agreements of Ms. Schmitz and Messrs. Fawaz and Raclin (a) conform the
definition of “Change of Control” to the VCP; (b) provide that “Good Reason”
shall not exist under their respective employment agreement by virtue of the
filing of the Chapter 11 cases and implementation of the Plan; and (c) include
an acknowledgement that, contingent upon the VCP becoming effective as set forth
in the Plan, no long-term incentive award shall be granted to them in
2009.
The foregoing description of the
amendments to the employment agreements of Ms. Schmitz and Messrs. Fawaz and
Raclin does not purport to be complete and is qualified in its entirety by
reference to the full text of such agreements, copies of which are attached as
Exhibits 10.8, 10.9 and 10.10 to this report and incorporated herein by
reference.
9
ITEM
5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN
FISCAL YEAR.
In accordance with the Plan, the
Company’s certificate of incorporation and bylaws were amended and restated in
their entirety. Each of the Company’s Amended and Restated
Certificate of Incorporation (the “Amended Certificate of
Incorporation”) and Amended and Restated By-Laws (the “Amended By-Laws”)
became effective on the Effective Date. A description of the key
provisions of the Amended Certificate of Incorporation and the Amended By-Laws
is included in the Company’s registration statement on Form S-8 under “Item 4 -
Description of Securities” filed with the SEC on November 25, 2009, which
description is incorporated herein by reference. This description is
qualified in its entirety by reference to the full text of these documents,
which are attached as Exhibit 3.1 and 3.2 to this report and incorporated herein
by reference.
ITEM
8.01. OTHER EVENTS.
On November 30, 2009, the Company
announced that it had consummated the Plan. A copy of the press
release announcing the effectiveness of the Plan and the Company’s emergence
from chapter 11 of the Bankruptcy Code is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d)
Exhibits
| Exhibit No. | Description | |
|
3.1
|
Amended
and Restated Certificate of Incorporation of Charter Communications,
Inc.*
|
|
|
3.2
|
Amended
and Restated By-Laws of Charter Communications, Inc.*
|
|
|
4.1
|
Warrant
Agreement, dated as of November 30, 2009, by and between Charter
Communications, Inc. and Mellon Investor Services LLC*
|
|
|
4.2
|
Warrant
Agreement, dated as of November 30, 2009, by and between Charter
Communications, Inc. and Mellon Investor Services LLC*
|
|
|
4.3
|
Warrant
Agreement, dated as of November 30, 2009, by and between Charter
Communications, Inc. and Mellon Investor Services LLC*
|
|
|
10.1
|
Indenture,
dated as of November 30, 2009, by and among CCH II, LLC, CCH II Capital
Corp. and The Bank of New York Mellon Trust Company,
NA*
|
|
|
10.2
|
Registration
Rights Agreement, dated as of November 30, 2009, by and among Charter
Communications, Inc. and certain investors listed
therein.*
|
|
|
10.3
|
Exchange
and Registration Rights Agreement, dated as of November 30, 2009, by and
among CCH II, LLC, CCH II Capital Corp and certain investors listed
therein.*
|
|
|
10.4
|
Amended
and Restated Limited Liability Company Agreement, dated as of November 30,
2009, among Charter Communications, Inc, Charter Investment, Inc. and
Charter Communications Holding Company, LLC*
|
|
|
10.5
|
Exchange
Agreement, dated as of November 30, 2009, among Charter Communications,
Inc., Charter Investment, Inc., Paul G. Allen and Charter Communications
Holding Company, LLC*
|
|
|
10.6
|
Lock-Up
Agreement, dated as November 30, 2009, among Charter Communications, Inc,
Paul G. Allen and Charter Investment, Inc.*
|
|
|
10.7
|
Amendment
to Employment Agreement of Neil Smit, dated November 30,
2009*
|
|
|
10.8
|
Amendment
to Employment Agreement of Eloise Schmitz, dated November 30,
2009*
|
|
|
10.9
|
Amendment
to Employment Agreement of Marwan Fawaz, dated November 30,
2009*
|
|
|
10.10
|
Amendment
to Employment Agreement of Grier Raclin, dated November 30,
2009*
|
|
|
99.1
|
Press
release, dated November 30, 2009*
|
|
|
99.2
|
Press
release, dated December 2, 2009*
|
______________
* filed
herewith
10
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, Charter
Communications, Inc. has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
CHARTER COMMUNICATIONS,
INC.
Registrant
Dated:
December 4, 2009
|
By:/s/ Eloise E.
Schmitz
Name:
Eloise E. Schmitz
Title: Executive Vice
President and Chief Financial
Officer
|
EXHIBIT INDEX
|
Exhibit
No.
|
Description
|
|
|
3.1
|
Amended
and Restated Certificate of Incorporation of Charter Communications,
Inc.*
|
|
|
3.2
|
Amended
and Restated By-Laws of Charter Communications, Inc.*
|
|
|
4.1
|
Warrant
Agreement, dated as of November 30, 2009, by and between Charter
Communications, Inc. and Mellon Investor Services LLC*
|
|
|
4.2
|
Warrant
Agreement, dated as of November 30, 2009, by and between Charter
Communications, Inc. and Mellon Investor Services LLC*
|
|
|
4.3
|
Warrant
Agreement, dated as of November 30, 2009, by and between Charter
Communications, Inc. and Mellon Investor Services LLC*
|
|
|
10.1
|
Indenture,
dated as of November 30, 2009, by and among CCH II, LLC, CCH II Capital
Corp. and The Bank of New York Mellon Trust Company,
NA*
|
|
|
10.2
|
Registration
Rights Agreement, dated as of November 30, 2009, by and among Charter
Communications, Inc. and certain investors listed
therein.*
|
|
|
10.3
|
Exchange
and Registration Rights Agreement, dated as of November 30, 2009, by and
among CCH II, LLC, CCH II Capital Corp and certain investors listed
therein.*
|
|
|
10.4
|
Amended
and Restated Limited Liability Company Agreement, dated as of November 30,
2009, among Charter Communications, Inc, Charter Investment, Inc. and
Charter Communications Holding Company, LLC*
|
|
|
10.5
|
Exchange
Agreement, dated as of November 30, 2009, among Charter Communications,
Inc., Charter Investment, Inc., Paul G. Allen and Charter Communications
Holding Company, LLC*
|
|
|
10.6
|
Lock-Up
Agreement, dated as November 30, 2009, among Charter Communications, Inc,
Paul G. Allen and Charter Investment, Inc.*
|
|
|
10.7
|
Amendment
to Employment Agreement of Neil Smit, dated November 30,
2009*
|
|
|
10.8
|
Amendment
to Employment Agreement of Eloise Schmitz, dated November 30,
2009*
|
|
|
10.9
|
Amendment
to Employment Agreement of Marwan Fawaz, dated November 30,
2009*
|
|
|
10.10
|
Amendment
to Employment Agreement of Grier Raclin, dated November 30,
2009*
|
|
|
99.1
|
Press
release, dated November 30, 2009*
|
|
|
99.2
|
Press
release, dated December 2, 2009*
|
______________
* filed
herewith