Charter 2015 Annual Report Download - page 42

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Risks Related to Ownership Position of Liberty Broadband Corporation
Liberty Broadband Corporation owns a significant amount of Charter’s common stock, giving it influence over corporate
transactions and other matters.
Members of our board of directors include directors who are also officers and directors of our stockholder with the largest ownership.
Dr. John Malone is the Chairman of Liberty Broadband, and Mr. Greg Maffei is the president and chief executive officer of Liberty
Broadband. As of December 31, 2015, Liberty Broadband beneficially held approximately 25.65% of our Class A common stock.
Liberty Broadband has the right to designate up to four directors as nominees for our board of directors through our 2015 annual
meeting of stockholders with one designated director to be appointed to each of the Audit Committee, the Nominating and Corporate
Governance Committee and the Compensation and Benefits Committee. Liberty Broadband may be able to exercise substantial
influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate
action, such as mergers and other business combination transactions should Liberty Broadband retain a significant ownership
interest in us. Liberty Broadband and its affiliates are not restricted from investing in, and have invested in, and engaged in, other
businesses involving or related to the operation of cable television systems, video programming, Internet service, voice or business
and financial transactions conducted through broadband interactivity and Internet services. Liberty Broadband and its affiliates
may also engage in other businesses that compete or may in the future compete with us.
Liberty Broadband's substantial influence over our management and affairs could create conflicts of interest if Liberty Broadband
faced decisions that could have different implications for it and us.
Risks Related to the TWC Transaction and the Bright House Transaction
In the event (i) only the TWC Transaction or the TWC Transaction and the Bright House Transaction are completed, former
Charter stockholders (excluding Liberty Broadband) will have significantly lower ownership and voting interest in New Charter
following the completion of such transactions than they currently have in Charter and will exercise less influence over
management, or (ii) only the Bright House Transaction is completed, existing Charter stockholders (excluding Liberty
Broadband) will have a reduced ownership and voting interest in Charter following the completion of the Bright House
Transaction than they currently have in Charter and will exercise less influence over management.
Based on the number of shares of TWC common stock outstanding as of December 31, 2015, and the number of shares of Charter
Class A common stock outstanding as of December 31, 2015, it is expected that, immediately after completion of the TWC
Transaction, the issuance of shares to Liberty Broadband and the completion of the Bright House Transaction, and depending on
the outcome of the election feature contained in the merger agreement, former Charter stockholders (excluding Liberty Broadband)
are expected to own between approximately 26% and 24% of New Charter Class A common stock, former TWC stockholders
(excluding Liberty Broadband) are expected to own between approximately 41% and 45% of New Charter Class A common stock,
A/N is expected to own indirectly (on an as-converted, as-exchanged basis) between approximately 14% and 13% of New Charter
Class A common stock and Liberty Broadband is expected to own between approximately 19% and 17% of New Charter Class A
common stock. If only the TWC Transaction is completed, it is expected that former Charter stockholders (excluding Liberty
Broadband) will own between approximately 30% and 28% of New Charter Class A common stock, former TWC stockholders
(excluding Liberty Broadband) will own between approximately 48% and 52% of New Charter Class A common stock and Liberty
Broadband will own between approximately 22% and 20% of New Charter Class A common stock. In connection with the TWC
Transaction, each TWC stockholder and Charter stockholder will become a stockholder of New Charter with a percentage ownership
of New Charter that is significantly smaller than the stockholder’s percentage ownership in TWC and Charter, respectively. Charter
stockholders currently have the right to vote for their board of directors and on other matters affecting the applicable company.
Consequently, former Charter stockholders (excluding Liberty Broadband) will be able to exercise less influence over the
management, operations and policies of New Charter after the TWC Transaction (and the Bright House Transaction, if applicable)
than they currently exercise over the management, operations and policies of Charter.
If only the Bright House Transaction is completed, it is expected that following the Bright House Transaction existing Charter
stockholders (excluding Liberty Broadband) will own approximately 52% of Charter Class A common stock, Liberty Broadband
will own approximately 20% of Charter Class A common stock and A/N will indirectly own (on an as-converted, as exchanged
basis) approximately 28% of Charter Class A common stock. Charter stockholders currently have the right to vote for their board
of directors and on other matters affecting Charter. Consequently, assuming the TWC Transaction is not completed but the Bright
House Transaction is completed, existing Charter stockholders (excluding Liberty Broadband) will be able to exercise less influence
over the management, operations and policies of Charter after the Bright House Transaction than they currently exercise over the
management, operations and policies of Charter.