Charter 2003 Annual Report Download - page 68

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The credit facilities of our subsidiaries contain change of control provisions, making it an event of default,
and permitting acceleration of the debt, in the event of certain speciÑed changes of control, including if
Mr. Allen, his estate, heirs and related entities, fails to maintain, directly or indirectly, at least 51% voting
interest in the related borrower, or ceases to own of record or beneÑcially, directly or indirectly, at least 25% of
the equity interests in the related borrower. See ""Ì Certain Trends and Uncertainties Ì Long-Term
Indebtedness Ì Change of Control Payments.''
Existing Notes
On September 23, 2003, we and our subsidiaries, CCH II and Charter Holdings, purchased, in a non-
monetary transaction, a total of approximately $609 million principal amount of our outstanding convertible
senior notes and approximately $1.3 billion principal amount of the senior notes and senior discount notes
issued by Charter Holdings from institutional investors in a small number of privately negotiated transactions.
As consideration for these securities, CCH II issued approximately $1.6 billion principal amount of 10.25%
senior notes due 2010, achieving approximately $294 million of debt discount. CCH II also issued an
additional $30 million principal amount of 10.25% senior notes for an equivalent amount of cash and used the
net proceeds for transaction costs and general corporate purposes. See discussion of the CCH II notes below
for more details.
5.75% Charter Convertible Notes
In October and November 2000, we issued 5.75% convertible senior notes with a total principal amount at
maturity of $750 million. As of December 31, 2003, there was $618 million in total principal amount of these
notes outstanding. The 5.75% Charter convertible notes are convertible at the option of the holder into shares
of Class A common stock at a conversion rate of 46.3822 shares per $1,000 principal amount of notes, which is
equivalent to a price of $21.56 per share, subject to certain adjustments. SpeciÑcally, the adjustments include
anti-dilutive provisions, which cause adjustments to occur automatically based on the occurrence of speciÑed
events to provide protection rights to holders of the notes. Additionally, we may adjust the conversion ratio
under certain circumstances when deemed appropriate. These notes are redeemable at our option at amounts
decreasing from 102.3% to 100% of the principal amount plus accrued and unpaid interest beginning on
October 15, 2003, to the date of redemption.
The 5.75% Charter convertible notes rank equally with any of our future unsubordinated and unsecured
indebtedness, but are structurally subordinated to all existing and future indebtedness and other liabilities of
our subsidiaries. Upon a change of control, subject to certain conditions and restrictions, we may be required
to repurchase the notes, in whole or in part, at 100% of their principal amount plus accrued interest at the
repurchase date.
4.75% Charter Convertible Notes
In May 2001, we issued 4.75% convertible senior notes with a total principal amount at maturity of
$633 million. As of December 31, 2003, there was $156 million in total principal amount of these notes
outstanding. The 4.75% Charter convertible notes are convertible at the option of the holder into shares of
Class A common stock at a conversion rate of 38.0952 shares per $1,000 principal amount of notes, which is
equivalent to a price of $26.25 per share, subject to certain adjustments. SpeciÑcally, the adjustments include
anti-dilutive provisions, which automatically occur based on the occurrence of speciÑed events to provide
protection rights to holders of the notes. Additionally, we may adjust the conversion ratio under certain
circumstances when deemed appropriate. These notes are redeemable at our option at amounts decreasing
from 101.9% to 100% of the principal amount, plus accrued and unpaid interest beginning on June 4, 2004, to
the date of redemption.
The 4.75% Charter convertible notes rank equally with any of our future unsubordinated and unsecured
indebtedness, but are structurally subordinated to all existing and future indebtedness and other liabilities of
our subsidiaries. Upon a change of control, subject to certain conditions and restrictions, we may be required
66