UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
____________________________
SCHEDULE
13D
Under the
Securities Exchange Act of 1934
(Amendment
No. 12)*
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Charter
Communications, Inc.
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(Name
of Issuer)
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Class
A Common Stock
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(Title
of Class of Securities)
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16117M107
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(CUSIP
Number)
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W.
Lance Conn
Charter
Investment, Inc.
505
Fifth Avenue South, Suite 900
Seattle,
Washington 98104
(206)
342-2000
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(Name,
Address and Telephone Number of Person Authorized to
Receive
Notices and Communications)
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February
11, 2009
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(Date
of Event Which Requires Filing of This
Statement)
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If
the filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
Note: Schedules
filed in paper format shall include a signed original and five copies of the
schedule, including all exhibits. See §240.13d-7 for other parties to
whom copies are to be sent.
*The
remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP
NO. 16117M107
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1.
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Names
of Reporting Persons. Paul G. Allen
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2.
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Check
the Appropriate Box if a Member of a Group (see Instructions)
(A) [X]
(B) [
]
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3.
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SEC
Use Only
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4.
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Source
of Funds (see Instructions)
PF
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5.
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Check
if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or
2(e) [__]
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6.
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Citizenship
or Place of Organization
United
States of America
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Number
of Shares Beneficially Owned by Each Reporting Person
With
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7.
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Sole
Voting Power
404,990,287
Shares (1)
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8.
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Shared
Voting Power
-0-
Shares
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9.
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Sole
Dispositive Power
404,990,287 Shares
(1)
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10.
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Shared
Dispositive Power
-0-
Shares
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
404,990,287
Shares (1)
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12.
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Check
if the Aggregate Amount In Row (11) Excludes Certain Shares (See
Instructions)[__]
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13.
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Percent
of Class Represented by Amount in Row 11
51.36%
beneficial ownership of Class A Common Stock (2) / 90.82% voting power
(3)
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14.
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Type
Of Reporting Person (See Instructions)
IN
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(1)
Represents (A) 28,467,421 shares of Class A Common Stock of the Issuer held
directly by Mr. Allen, (B) 10,000 vested options to acquire shares of Class A
Common Stock of the Issuer, (C) 64,356 shares of unvested restricted stock, and
(D) shares of Class A Common Stock of the Issuer into which the following
interests may be converted: (a) 50,000 shares of Class B Common Stock of the
Issuer held directly by Paul G. Allen, (b) 361,566,958 Class A Common Membership
Units ("Class A Units") of Charter Communications Holding Company, LLC ("Charter
Holdco") held by Charter Investment, Inc. ("CII") including the exchange of the
CCHC Note into 37,266,479 Class A Units, and (c) 14,831,552 Class C
Common Membership Units ("Class C Units") of Charter Holdco held by
CII. CII has an exchange option with the Issuer giving it the right,
at any time, to exchange both its Class A Units and Class C Units (Class A Units
and Class C Units collectively, the "Class B Common Stock
Equivalents")
for shares of Class B Common Stock of the Issuer on a one-for-one
basis. Class B Common Stock of the Issuer is convertible at any time
into Class A Common Stock of the Issuer on a one-for-one basis. Mr.
Allen is the sole stockholder of CII. Mr. Allen is therefore deemed
to have beneficial ownership of all of the Class B Common Stock Equivalents held
by CII. Because Mr. Allen is the ultimate controlling person of CII,
he is a beneficial owner who effectively has sole voting power with respect to
the Class B Common Stock Equivalents held by CII; however, because CII is the
record holder of such Class B Common Stock Equivalents, CII may be deemed to
share voting power with Mr. Allen over such Class B Common Stock
Equivalents.
(2)
The calculation of the percentage assumes that: (i) the 50,000 shares of Class B
Common Stock held by Mr. Allen have been converted into shares of Class A Common
Stock and (ii) all Class B Common Stock Equivalents held by CII or that CII has
the right to acquire have been exchanged for shares of Class A Common
Stock.
(3)
Each share of Class B Common Stock of the Issuer has the right to a number of
votes determined by multiplying (i) ten, and (ii) the sum of (1) the total
number of shares of Class B Common Stock outstanding, and (2) the aggregate
number of Class B Common Stock Equivalents, and dividing the product by the
total number of shares of Class B Common Stock outstanding. The
calculation of this percentage assumes that Mr. Allen's equity interests are
retained in the form that maximizes voting power (i.e., the 50,000 shares of
Class B Common Stock held by Mr. Allen have not been converted into shares of
Class A Common Stock and that the Class B Common Stock Equivalents beneficially
owned by Mr. Allen through CII have not been exchanged for shares of Class B
Common Stock or Class A Common Stock).
CUSIP
NO. 16117M107
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1.
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Names
of Reporting Persons. Charter Investment,
Inc.
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2.
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Check
the Appropriate Box if a Member of a Group (see Instructions)
(A) [X]
(B) [
]
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3.
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SEC
Use Only
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4.
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Source
of Funds (see Instructions)
AF
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5.
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Check
if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or
2(e) [__]
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6.
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Citizenship
or Place of Organization
State
of Delaware
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Number
of Shares Beneficially Owned by Each Reporting Person
With
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7.
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Sole
Voting Power
-0-
Shares
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8.
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Shared
Voting Power
376,398,510 Shares
(1)
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9.
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Sole
Dispositive Power
-0-
Shares
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10.
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Shared
Dispositive Power
376,398,510
Shares (1)
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
376,398,510
Shares (1)
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12.
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Check
if the Aggregate Amount In Row (11) Excludes Certain Shares (See
Instructions) [__]
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13.
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Percent
of Class Represented by Amount in Row 11
47.73%
beneficial ownership of Class A Common Stock (2) / 0.0% voting power
(3)
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14.
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Type
Of Reporting Person (See Instructions)
CO
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(1)
Represents Class A Common Membership Units ("Class A Units") and Class C Common
Membership Units ("Class C Units" and together with Class A Units, the "Class B
Stock Common Equivalents") of Charter Communications Holding Company, LLC
("Charter Holdco") directly held by Charter Investment, Inc. ("CII"). Assumes
the exchange of the CCHC Note into 37,266,479 Class A Units. CII has
an exchange option with the Issuer giving it the right, at any time, to exchange
its Class B Stock Common Equivalents for shares of Class B Common Stock of the
Issuer on a one-for-one basis. Class B Common Stock of the Issuer is
convertible at any time into Class A Common Stock of the Issuer on a one-for-one
basis. Paul G. Allen is the sole stockholder of CII and is therefore
deemed to have beneficial ownership of all of the Class B Common Equivalents
that CII owns. Because Mr. Allen is the ultimate controlling person
of CII, he is a beneficial owner who effectively has sole voting
power
with respect to the Class B Common Stock Equivalents held by CII; however,
because CII is the record holder of such Class B Common Stock Equivalents, CII
may be deemed to share voting power with Mr. Allen over such Class B Common
Stock Equivalents.
(2)
The calculation of this percentage assumes that all Class B Common Stock
Equivalents held by CII or that CII has the right to acquire have been exchanged
for shares of Class A Common Stock.
(3)
Each share of Class B Common Stock of the Issuer has the right to a number of
votes determined by multiplying (i) ten, and (ii) the sum of (1) the total
number of shares of Class B Common Stock outstanding, and (2) the aggregate
number of Class B Common Stock Equivalents, and dividing the product by the
total number of shares of Class B Common Stock outstanding. The
calculation of this percentage assumes that Mr. Allen's equity interests are
retained in the form that maximizes voting power (i.e., the 50,000 shares of
Class B Common Stock held by Mr. Allen have not been converted into shares of
Class A Common Stock and that the Class B Common Stock Equivalents owned by CII
have not been exchanged for shares of Class B Common Stock or Class A Common
Stock).
This
Amendment No. 12 to Schedule 13D amends the Schedule 13D originally filed with
the Securities and Exchange Commission (the "SEC") on November 22, 1999, as
amended by the first amendment, as filed with the SEC on December 20, 1999, the
second amendment, as filed with the SEC on September 13, 2000, the third
amendment, as filed with the SEC on March 11, 2002, the fourth amendment, as
filed with the SEC on May 17, 2002, the fifth amendment, as filed with the SEC
on July 3, 2002, the sixth amendment, as filed with the SEC on August 8, 2002,
the seventh amendment, as filed with the SEC on December 15, 2003, the
eighth amendment, as filed with the SEC on November 9, 2005, the ninth
amendment, as filed with the SEC on August 15, 2007, the tenth amendment, as
filed with the SEC on December 24, 2008, and the eleventh amendment, as filed
with the SEC on January 6, 2009 (as amended, the "Schedule
13D"). Capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Schedule 13D.
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Item
2.
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Identity
and Background.
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Item
2 is amended and restated in its entirety as follows:
The
persons filing this statement are Paul G. Allen and Charter Investment, Inc.
("CII" and together with Paul G. Allen, the "Reporting Persons"). Mr.
Allen's business address is: c/o Vulcan Inc., 505 Fifth Avenue South, Suite 900,
Seattle, Washington 98104. Mr. Allen is Chairman of the board of
directors of the Issuer and CII. Mr. Allen is also the sole
stockholder of CII.
CII
is a Delaware corporation, the principal business of which is holding equity
interests in Charter Communications Holding Company, LLC ("Charter Holdco"), a
subsidiary of the Issuer, and performing various services relating to the cable
assets held indirectly by Charter Holdco and the Issuer. CII is also
the successor by merger to Vulcan Cable III Inc. ("Vulcan Cable"), of which Mr.
Allen was the sole shareholder. The address of CII's principal office
is 505 Fifth Avenue South, Suite 900, Seattle, Washington 98104. Mr.
Allen and each of CII's executive officers and directors is a U.S. citizen.
Their names, business addresses and principal occupations are as
follows:
Paul
G. Allen, c/o Vulcan Inc., 505 Fifth Avenue South, Suite 900, Seattle,
Washington 98104. Mr. Allen is Chairman of the board of directors of CII and of
the Issuer. Mr. Allen is also the sole stockholder of
CII. Mr. Allen is the brother of Ms. Patton.
Jo
Allen Patton, c/o Vulcan Inc., 505 Fifth Avenue South, Suite 900, Seattle,
Washington 98104. Ms. Patton is a director and the President of
CII. Ms. Patton is the sister of Mr. Allen.
W.
Lance Conn, c/o Vulcan Inc., 505 Fifth Avenue South, Suite 900, Seattle,
Washington 98104. Mr. Conn is a Vice President of CII.
Susan
Drake, c/o Vulcan Inc., 505 Fifth Avenue South, Suite 900, Seattle, Washington
98104. Ms. Drake is a Vice President of CII.
William
L. McGrath, c/o Vulcan Inc., 505 Fifth Avenue South, Suite 900, Seattle,
Washington 98104. Mr. McGrath is a Vice President and the Secretary
of CII.
During
the last five years, Mr. Allen and CII have not, nor, to the best knowledge of
Mr. Allen and CII, has any other person named in this Item 2, been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which he or it is or was subject to a
judgment, decree or final order
enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such
laws.
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Item
4.
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Purpose
of Transaction.
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Item
4 is supplemented as follows:
On
February 11, 2009, the Reporting Persons reached an agreement in principle (the
"Restructuring Agreement") with the Issuer regarding a financial restructuring
of the Issuer, CII, Charter Holdco and their subsidiaries. The
Restructuring Agreement provides for the concurrent and joint filing by the
Issuer and its subsidiaries and CII for chapter 11 relief, joint administration
of their bankruptcy cases and implementation of the proposed restructuring
pursuant to a joint plan of reorganization (the "Joint Plan"). The
Issuer, its subsidiaries and CII expect to institute chapter 11 proceedings to
implement the Joint Plan on or before April 1, 2009.
Under
the Joint Plan, and upon consummation thereof, the Reporting Persons would
receive, in settlement of their rights, claims and remedies against the Issuer
and its subsidiaries, and in addition to any amounts received by virtue of their
holding any claims of the type described in the next following paragraph, (i)
shares of new Class B Common Stock in the Issuer representing 2% of the Issuer's
equity value after giving effect to the rights offering contemplated by the
Joint Plan, but prior to the issuance of warrants and equity-based awards
provided for by the Joint Plan, (ii) seven year warrants to purchase shares of
new Class A Common Stock in the Issuer in an amount equal to 4% of the Issuer's
equity value after giving effect to the rights offering contemplated by the
Joint Plan, but prior to the issuance of warrants and equity-based awards
provided for by the Joint Plan, (iii) $175 million in cash and (iv) new CCH II,
LLC ("CCH II") notes in an aggregate principal amount of $85
million. In addition, the Reporting Persons would retain a 1% direct
equity interest in Charter Holdco, and a right to exchange all or a portion of
such interest into new Class A Common Stock of the Issuer after the effective
date of the Joint Plan. The Reporting Persons would also receive
reimbursement for up to $20 million of their fees and expenses in connection
with the proposed restructuring. The Joint Plan further provides
that, following consummation of the financial restructuring, the Reporting
Persons would hold at least 35% of the combined voting power of the Issuer and
would have the right to nominate no less than 35% of the members of the Issuer's
board of directors. The new Class B Common Stock will be subject to
significant restrictions on transfer.
The
Restructuring Agreement provides, among other things, for a refinancing of
existing debt at CCH II and a reduction of existing debt of the Issuer and its
subsidiaries. The funding required by the financial restructuring
contemplated by the Joint Plan is expected to be satisfied by cash from
operations, an exchange of debt of CCH II and CCH I, LLC ("CCH I") for other
debt at CCH II, the issuance of additional debt, and the proceeds of an equity
offering for which the Issuer has received a back-stop commitment from certain
of its noteholders. The Restructuring Agreement, including the
back-stop commitments, is subject to various conditions.
The
Restructuring Agreement further contemplates that, without limitation, pursuant
to the Joint Plan and upon consummation thereof (i) the notes and bank debt
of Charter Communications Operating, LLC and CCO Holdings, LLC will remain
outstanding, (ii) holders of notes issued by CCH II will receive new notes
issued by CCH II ("New CCH II Notes") or cash on account of their claims, (iii)
holders of notes issued by CCH I will receive shares of new Class A Common Stock
in the Issuer and New CCH II Notes, (iv) holders of notes issued by CCH I
Holdings, LLC and Charter Communications Holdings, LLC will receive warrants to
purchase shares of new Class A Common Stock in the Issuer, (v) holders of
convertible notes issued by the Issuer will receive cash and preferred stock
issued by the Issuer, (vi) holders of common stock of the Issuer will not
receive
any
amounts on account of their common stock, which will be cancelled, and (vii)
trade creditors will be paid in full. The recoveries summarized above
are more fully described in the term sheet which forms a part of the
Restructuring Agreement (the "Term Sheet").
Under
the Joint Plan, if implemented, the Reporting Persons will receive releases from
the holders of other claims against and interests in the Issuer and its
subsidiaries.
Pursuant
to the Restructuring Agreement, and so long as no termination event described
therein has occurred and, if capable of cure or waiver, has not been so cured or
waived, the Reporting Persons have agreed, among other things, to vote any
claims they may have in favor of the Joint Plan and to not object to or take
other actions inconsistent with or that would delay approval and implementation
of the Joint Plan. The Restructuring Agreement is subject to
termination under certain circumstances. The foregoing summary of the
Restructuring Agreement is qualified entirely by the terms in the Restructuring
Agreement (including the Term Sheet attached thereto), a copy of which is filed
as Exhibit 10.26 to this Amendment No. 12 to Schedule
13D and
incorporated herein by reference in its entirety.
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Item
5.
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Interest
in Securities of the Issuer.
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Item
5 is supplemented as follows:
(a)
As of February 11, 2009 (the "Reporting Date"), Mr. Allen beneficially owns
404,990,287 shares of Class A Common Stock of the Issuer, which consists of (i)
28,467,421 shares of Class A Common Stock of the Issuer held directly by Mr.
Allen, (ii) 10,000 vested options on shares of Class A Common Stock of the
Issuer, (iii) 64,356 shares of unvested restricted stock, and (iv) shares of
Class A Common Stock of the Issuer into which the following interests may be
converted: (a) 50,000 shares of Class B Common Stock of the Issuer held directly
by Mr. Allen, (b) 361,566,958 Class A Common Membership Units ("Class A Units")
of Charter Holdco held by CII, including as successor by merger to Vulcan Cable
and including the exchange of the CCHC Note into 37,266,479 Class A Units, and
(c) 14,831,552 Class C Common Membership Units ("Class C Units") of Charter
Holdco held by CII, including as successor by merger to Vulcan
Cable. CII has an exchange option with the Issuer giving it the
right, at any time, to exchange its Class A Units and Class C Units
(collectively, the "Class B Common Stock Equivalents") for shares of Class B
Common Stock of the Issuer on a one-for-one basis. Class B Common
Stock of the Issuer is convertible at any time into Class A Common Stock of the
Issuer on a one-for-one basis.
Each
share of Class B Common Stock of the Issuer has the right to a number of votes
determined by multiplying (i) ten, and (ii) the sum of (1) the total number of
shares of Class B Common Stock outstanding, and (2) the aggregate number of
Class B Common Stock Equivalents, and dividing the product by the total number
of shares of Class B Common Stock outstanding. Class B Common Stock
is identical to Class A Common Stock except that Class A Common Stock is
entitled to one vote per share and is not convertible into any other
security.
As
of the Reporting Date, Mr. Allen's beneficial ownership represents approximately
51.36% of the shares of the Issuer's outstanding Class A Common Stock, assuming
conversion of all Class B Common Stock and Class B Common Stock Equivalents, and
approximately 90.82% of the voting power of the Issuer's outstanding Class A
Common Stock assuming no conversion of Class B Common Stock and the Class B
Common Stock Equivalents. The calculation of these percentages
assumes that 412,140,525 shares of Class A Common Stock of the Issuer are issued
and outstanding, as reported in the most recent Form 10-Q of the
Issuer.
Except
as otherwise provided, each of the other persons named in Item 2 beneficially
owns less than 0.1% of the equity and voting power of the Issuer and, except as
otherwise provided below, none of the other persons named in Item 2 beneficially
owns any of the Issuer's Class A Common Stock. Included in beneficial
ownership are all options that vest and will be exercisable within 60 days of
the Reporting Date.
W.
Lance Conn, Vice President of CII, beneficially owns 179,155 shares of Class A
Common Stock.
Jo
Allen Patton, director and President of CII, beneficially owns 193,896 shares of
Class A Common Stock.
(b)
Mr. Allen is deemed to have sole voting and dispositive power with respect to
the 404,990,287 shares of Class A Common Stock that he beneficially owns
directly and indirectly through CII (which he controls). Because Mr. Allen is
the ultimate controlling person of CII, CII is deemed to have shared voting and
dispositive power with Mr. Allen over the 376,398,510 shares of Class A Common
Stock beneficially owned by CII through its ownership of 361,566,958 Class A
Units (including the exchange of the CCHC Note into 37,266,479 Class A Units)
and 14,831,552 Class C Units of Charter Holdco.
To
the knowledge of the Reporting Persons, except as otherwise specified herein,
each of the persons disclosed in Item 5 has sole dispositive and voting power
with respect to the shares of Class A Common Stock actually held by the
persons.
(c)
On
April 29, 2008, Mr. Allen acquired beneficial ownership of 64,356 shares of
Class A Common Stock of the Issuer through a grant of restricted stock that will
fully vest on the anniversary of the date of grant.
On
April 29, 2008, Mr. Conn acquired beneficial ownership of 64,356 shares of Class
A Common Stock of the Issuer through a grant of restricted stock that will fully
vest on the anniversary of the date of grant.
On
April 29, 2008, Ms. Patton acquired beneficial ownership of 64,356 shares of
Class A Common Stock of the Issuer through a grant of restricted stock that will
fully vest on the anniversary of the date of grant.
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Item
6.
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Contracts,
Arrangements, Understandings or Relationships With Respect to Securities
of the Issuer.
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Item
6 is supplemented as follows:
Restructuring
Agreement
The
responses to Item 4 of this Amendment No. 12 to Schedule 13D are incorporated
herein by reference in their entirety.
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Item
7.
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Material
to be Filed as Exhibits.
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10.26
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Restructuring
Agreement, dated as of February 11, 2009, by and among Paul G. Allen,
Charter Investment, Inc., and Charter Communications,
Inc.
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SIGNATURES
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
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Dated: February
13, 2009
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PAUL
G. ALLEN
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By:
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/s/
Paul G. Allen
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Dated: February
13, 2009
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CHARTER
INVESTMENT, INC.
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By:
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/s/
W. Lance Conn
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Name:
W. Lance Conn
Title:
Vice President
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EXHIBIT
INDEX
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10.26
|
Restructuring
Agreement, dated as of February 11, 2009, by and among Paul G. Allen,
Charter Investment, Inc., and Charter Communications,
Inc.
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