Charter 2003 Annual Report Download - page 16

outstanding 5.75% convertible senior notes and 4.75% convertible senior notes of Charter, and all
employee, director and consultant stock options.
(d) The weighted average exercise or conversion price of these securities is $16.73.
(e) ReÖects common shares issuable upon conversion of the 545,259 shares of Series A convertible
redeemable preferred stock issued to certain sellers at the closing of the Cable USA acquisition in 2001.
Such shares have a current liquidation preference of approximately $55 million and are convertible at any
time into shares of Class A common stock at an initial conversion price of $24.71 per share (or 4.0469446
shares of Class A common stock for each share of convertible redeemable preferred stock), subject to
certain adjustments.
(f) ReÖects shares issuable upon conversion of all outstanding 5.75% convertible senior notes ($618 million
total principal amount), which are convertible into shares of Class A common stock at an initial
conversion rate of 46.3822 shares of Class A common stock per $1,000 principal amount of notes (or
approximately $21.56 per share), subject to certain adjustments.
(g) ReÖects shares issuable upon conversion of all outstanding 4.75% convertible senior notes ($156 million
total principal amount), which are convertible into shares of Class A common stock at an initial
conversion rate of 38.0952 shares of Class A common stock per $1,000 principal amount of notes (or
approximately $26.25 per share), subject to certain adjustments.
(h) In January 2004, Charter commenced an option exchange program in which employees of Charter and its
subsidiaries were oÅered the right to exchange all stock options (vested and unvested) issued under the
1999 Charter Communications Option Plan and 2001 Stock Incentive Plan that had an exercise price
over $10 per share for shares of restricted Charter Class A common stock or, in some instances, cash. In
the closing of the exchange oÅer on February 20, 2004, Charter accepted for cancellation eligible options
to purchase approximately 18,137,664 shares of its Class A common stock. In exchange, Charter granted
1,966,686 shares of restricted stock, including 460,777 performance shares to eligible employees of the
rank of senior vice president and above, and paid a total cash amount of approximately $4 million (which
amount includes applicable withholding taxes) to those employees who received cash rather than shares
of restricted stock. The grants of restricted stock were eÅective as of February 25, 2004. See ""Options/
Stock Incentive Plans Ì February 2004 Option Exchange'' in the Charter Communications, Inc. 2004
Proxy Statement available at www.sec.gov for additional information.
Charter Communications Holding Company, LLC. Charter Holdco, a Delaware limited liability
company that was formed on May 25, 1999, is the direct 100% parent of Charter Holdings. The common
membership units of Charter Holdco are owned 46% by Charter, 19% by Vulcan Cable III, Inc. and 35% by
Charter Investment, Inc. All of the outstanding common membership units in Charter Holdco held by Vulcan
Cable III, Inc. and Charter Investment, Inc. are controlled by Mr. Allen and are exchangeable on a one-for-
one basis at any time for shares of high vote Class B common stock of Charter, which are in turn convertible
into Class A common stock of Charter. Charter controls 100% of the voting power of Charter Holdco and is its
sole manager.
Preferred Equity in CC VIII, LLC. Upon the closing of the acquisition of certain cable systems by our
subsidiary, CC VIII, in 2000, some of the former owners received a portion of their purchase price in the form
of preferred membership units in CC VIII, LLC, which were exchangeable for shares of Charter Class A
common stock. In April 2002, these former owners exercised their right to put their preferred CC VIII
membership interests to Mr. Allen and this transaction closed on June 6, 2003. An issue has arisen regarding
the ultimate ownership of these CC VIII membership units following the consummation of this put right. See
""Certain Relationships and Related Transactions Ì Transactions Arising Out of Our Organizational Struc-
ture and Mr. Allen's Investment in Charter Communications, Inc. and Its Subsidiaries Ì Equity Put
Rights Ì CC VIII'' in the Charter Communications, Inc. 2004 Proxy Statement available at www.sec.gov for
additional information.
Charter Communications Holdings, LLC. Charter Holdings, a Delaware limited liability company
formed on February 9, 1999, is a co-issuer of the publicly held Charter Holdings notes that consist of
$2.8 billion total principal amount at maturity of notes issued in March 1999, $1.4 billion total principal
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