8-KShareholder MattersCorporate ChangesExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Bylaw Amendment (Aug 20, 2010)

Filed August 20, 2010For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on August 20, 2010, primarily to report the effectiveness of a newly filed Certificate of Incorporation. This filing was necessitated by an error in the tabulation of shareholder votes on a previously approved Amended and Restated Certificate of Incorporation from July 27, 2010. Consequently, a Certificate of Correction was filed to nullify the prior filing, and a new Certificate of Incorporation was approved by stockholder written consent and filed on August 20, 2010. The key change introduced by the new Certificate of Incorporation relates to the company's net operating loss (NOL) preservation strategy. While retaining the "owner shift" and equity value decrease triggers for imposing trading restrictions, the 'Trigger Price' has been amended from a calculation based on the plan of reorganization's 'Plan Value' to a fixed $3.2 billion, approximately 80% of the company's market equity capitalization at emergence from bankruptcy. This adjustment aims to better protect NOLs given the divergence between the bankruptcy emergence market value and the pre-emergence plan value.

Key Highlights

  • 1Charter Communications filed an 8-K on August 20, 2010, to report on amendments to its Certificate of Incorporation.
  • 2A prior Amended Certificate of Incorporation, approved July 27, 2010, was nullified due to an error in shareholder vote tabulation.
  • 3A new Certificate of Incorporation was approved by stockholder written consent and filed on August 20, 2010.
  • 4The new Certificate of Incorporation amends the 'Trigger Price' for imposing trading restrictions aimed at preserving Net Operating Losses (NOLs).
  • 5The 'Trigger Price' for NOL preservation restrictions is now set at $3.2 billion, approximately 80% of market equity capitalization at emergence from bankruptcy.
  • 6The new Certificate of Incorporation designates the Delaware Court of Chancery as the exclusive forum for certain corporate disputes.
  • 7Several 'clean-up' provisions were made, including removing references to retired preferred stock and a terminated Lock-Up Agreement.

Frequently Asked Questions

The primary reason for this 8-K filing was to report the effectiveness of a new Certificate of Incorporation, which replaced a previously filed and approved Amended Certificate of Incorporation due to an error in the tabulation of shareholder votes.

The amendment to the 'Trigger Price' is significant because it aims to provide better protection for Charter's Net Operating Losses (NOLs). By setting the trigger at $3.2 billion (approximately 80% of market capitalization at emergence), the company seeks to prevent a significant ownership change that could limit its ability to utilize NOLs, given the difference between its bankruptcy emergence market value and the historical 'Plan Value'.

Yes, the new Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain intra-company disputes, including derivative actions, breach of fiduciary duty claims, and actions related to Delaware corporate law or the company's governing documents.

The filing also includes several 'clean-up' changes, such as removing provisions related to Series A 15% Pay-in-Kind Preferred Stock (which has been redeemed and retired), references to no longer applicable membership interests, and the termination of a Lock-Up Agreement with Paul G. Allen and Charter Investment, Inc.