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CHARTER COMMUNICATIONS, INC. / FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_______________

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2001.


		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From ______ to ______.

Commission File Number: 000-27927

CHARTER COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)


Delaware		43-1857213

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)









12405 Powerscourt Drive		63131

St. Louis, Missouri (Address of principal executive offices)		(Zip Code)

(314) 965-0555
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No (BOX)

Number of shares of Class A common stock outstanding as of November 14, 2001: 294,583,431

Number of shares of Class B common stock outstanding as of November 14, 2001: 50,000

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION.
	ITEM 1. FINANCIAL STATEMENTS — CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS
		CONSOLIDATED STATEMENTS OF CASH FLOWS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
PART II. OTHER INFORMATION.
	ITEM 1. LEGAL PROCEEDINGS.
	ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
SIGNATURES
EX-2.1(a): 1ST AMEND. TO ASSET PURCHASE AGR.
EX-2.1(b): 1ST AMEND. REORGANIZATION AGREEMENT
EX-2.1(c): 1ST AMEND. TO ASSET PURCHASE AGR.
EX-2.1(d): 1ST AMEND. REORGANIZATION AGREEMENT
EX-2.1(e): 1ST AMEND. TO ASSET PURCHASE AGR.
EX-2.1(f): 1ST AMEND. TO ASSET PURCHASE AGR.
EX-2.1(g): 1ST AMEND. AGR. RE. CLOSING MATTERS
EX-3.1: CERTIFICATE OF DESIGNATION
EX-3.2: AMENDED AND RESTATED BY-LAWS
EX-10.1: AGREEMENT
EX-10.2: EMPLOYMENT AGREEMENT
EX-10.3: EMPLOYMENT AGREEMENT
EX-10.4: EMPLOYMENT AGREEMENT
EX-10.5: EMPLOYMENT AGREEMENT
EX-10.6: EMPLOYMENT AGREEMENT
EX-10.7: EMPLOYMENT AGREEMENT
EX-10.8: CREDIT AGREEMENT
EX-10.9: AMENDED AND RESTATED L.L.C. AGREEMENT
EX-10.10: AMENDMENT TO 2001 STOCK INCENTIVE PLAN

CHARTER COMMUNICATIONS, INC.

FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2001

TABLE OF CONTENTS


		PAGE

Part I. Financial Information









	Item 1. Financial Statements – Charter Communications, Inc. and Subsidiaries		3









	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13









	Item 3. Quantitative and Qualitative Disclosures About Market Risk		26









Part II. Other Information









	Item 1. Legal Proceedings		28









	Item 2. Changes in Securities and Use of Proceeds		28









	Item 6. Exhibits and Reports on Form 8-K		29









Signatures			31

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS:

This Quarterly Report includes forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward-looking statements contained in this Quarterly Report may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated” and “potential,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this Quarterly Report are set forth in this Quarterly Report and in other reports or documents that we file from time to time with the Securities and Exchange Commission and include, but are not limited to:

	•		our plans to achieve growth by offering new products and services;

	•		our anticipated capital expenditures for our planned upgrades and new equipment and facilities;

	•		our ability to fund capital expenditures and any future acquisitions;

	•		our beliefs regarding the effects of governmental regulation on our business;

	•		our ability to effectively compete in a highly competitive environment;

	•		our ability to obtain programming at reasonable prices; and

	•		general business and economic conditions, particularly in light of the uncertainty stemming from the recent terrorist activity in the United States and the armed conflict abroad.

All forward-looking statements attributable to us or a person acting on our behalf are expressly qualified in their entirety by these cautionary statements.

PART I. FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


					SEPTEMBER 30,			DECEMBER 31,
					2001			2000 *

					(UNAUDITED)
ASSETS




CURRENT ASSETS:




	Cash and cash equivalents				$	15,205		$	130,702




	Accounts receivable, less allowance for doubtful accounts of $24,273 and $12,421, respectively					257,380			217,667




	Receivables from related party					4,181			6,480




	Prepaid expenses and other current assets					77,076			77,719

			Total current assets			353,842			432,568

INVESTMENT IN CABLE PROPERTIES:




	Property, plant and equipment, net of accumulated depreciation of $1,757,747 and $1,061,216, respectively					6,727,029			5,267,519




	Franchises, net of accumulated amortization of $2,849,974 and $1,878,929, respectively					17,503,324			17,068,702

				Total investment in cable properties, net		24,230,353			22,336,221

OTHER ASSETS						310,093			274,777

					$	24,894,288		$	23,043,566





LIABILITIES AND SHAREHOLDERS’ EQUITY




CURRENT LIABILITIES:




	Accounts payable and accrued expenses				$	1,295,821		$	1,367,234





		Total current liabilities				1,295,821			1,367,234

LONG-TERM DEBT						15,654,739			13,060,455

DEFERRED MANAGEMENT FEES – RELATED PARTY						13,751			13,751

OTHER LONG-TERM LIABILITIES						410,117			285,266

MINORITY INTEREST						4,303,363			4,089,329

REDEEMABLE SECURITIES						—			1,104,327

PREFERRED STOCK – REDEEMABLE; $.001 par value; 1 million shares authorized; 505,664 shares issued and outstanding						50,566			—

SHAREHOLDERS’ EQUITY:




	Class A common stock; $.001 par value; 1.75 billion and 1.75 billion shares authorized, respectively; 294,427,431 and 233,752,282 shares issued and outstanding, respectively					294			234




	Class B common stock; $.001 par value; 750 million shares authorized; 50,000 shares issued and outstanding					—			—




	Preferred stock; $.001 par value; 249 million shares authorized; no non-redeemable shares issued and outstanding					—			—




	Additional paid-in capital					4,951,685			4,018,444




	Accumulated deficit					(1,767,115	)		(894,881	)




	Accumulated other comprehensive loss					(18,933	)		(593	)

		Total shareholders’ equity				3,165,931			3,123,204

					$	24,894,288		$	23,043,566

The accompanying notes are an integral part of these consolidated financial statements.

Agrees with the audited consolidated balance sheet included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2000.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


			THREE MONTHS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,

			2001			2000			2001			2000

			(UNAUDITED)						(UNAUDITED)
REVENUES			$	1,043,844		$	838,961		$	2,846,116		$	2,355,345





OPERATING EXPENSES:




	Operating, general and administrative			561,288			426,021			1,519,863			1,204,334




	Depreciation and amortization			775,438			628,106			2,192,285			1,777,893




	Option compensation expense			(57,083	)		8,116			(46,195	)		34,205




	Corporate expenses			15,014			14,055			42,728			41,570

				1,294,657			1,076,298			3,708,681			3,058,002

		Loss from operations		(250,813	)		(237,337	)		(862,565	)		(702,657	)




OTHER INCOME (EXPENSE):




	Interest expense			(342,255	)		(283,300	)		(978,022	)		(765,342	)




	Interest income			1,947			624			12,064			6,734




	Other, net			(88,917	)		(3,451	)		(172,825	)		(5,955	)

				(429,225	)		(286,127	)		(1,138,783	)		(764,563	)

		Loss before minority interest		(680,038	)		(523,464	)		(2,001,348	)		(1,467,220	)




MINORITY INTEREST IN LOSS OF SUBSIDIARY				362,611			313,447			1,129,357			879,667

		Net loss		(317,427	)		(210,017	)		(871,991	)		(587,553	)




		Dividends on preferred stock – redeemable		(243	)		—			(243	)		—

		Net loss applicable to common stock	$	(317,670	)	$	(210,017	)	$	(872,234	)	$	(587,553	)

LOSS PER COMMON SHARE, basic and diluted			$	(1.08	)	$	(0.93	)	$	(3.34	)	$	(2.63	)

Weighted average common shares outstanding, basic and diluted				294,250,549			224,965,289			261,240,101			222,997,913

The accompanying notes are an integral part of these consolidated financial statements.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)


				NINE MONTHS ENDED SEPTEMBER 30,

				2001			2000

				(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:




	Net loss			$	(871,991	)	$	(587,553	)




	Adjustments to reconcile net loss to net cash from operating activities:




		Minority interest in loss of subsidiary			(1,129,357	)		(879,667	)




		Depreciation and amortization			2,192,285			1,777,893




		Option compensation expense			(46,195	)		34,205




		Non-cash interest expense			208,880			126,478




		Loss on equity investments			46,846			—




	Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:




		Accounts receivable			(31,522	)		(85,249	)




		Prepaid expenses and other current assets			(10,778	)		14,159




		Accounts payable and accrued expenses			(80,535	)		495,810




		Receivables from/payables to related party, including deferred management fees			15,416			(42,003	)




		Other operating activities			9,491			2,324

			Net cash flows from operating activities		302,540			856,397

CASH FLOWS FROM INVESTING ACTIVITIES:




	Purchases of property, plant and equipment				(2,156,613	)		(1,854,105	)




	Payments for acquisitions, net of cash acquired				(1,792,195	)		(1,132,509	)




	Purchase of investments				(10,113	)		(14,888	)




	Other investing activities				(9,579	)		(7,176	)

			Net cash flows from investing activities		(3,968,500	)		(3,008,678	)

CASH FLOWS FROM FINANCING ACTIVITIES:




	Proceeds from issuance of common stock, net of issuance costs				1,230,367			—




	Borrowings of long-term debt				6,557,199			5,551,303




	Repayments of long-term debt				(4,148,873	)		(3,437,008	)




	Payments for debt issuance costs				(88,230	)		(62,848	)




	Other financing activities				—			11,595

			Net cash flows from financing activities		3,550,463			2,063,042

NET DECREASE IN CASH AND CASH EQUIVALENTS					(115,497	)		(89,239	)




CASH AND CASH EQUIVALENTS, beginning of period					130,702			133,706

CASH AND CASH EQUIVALENTS, end of period				$	15,205		$	44,467

CASH PAID FOR INTEREST				$	608,893		$	453,742

NON-CASH TRANSACTIONS:




	Exchange of assets for acquisition			$	24,440		$	—

	Issuances of common stock as payment for acquisitions			$	—		$	1,184,698

	Reclassification of redeemable securities to equity and minority interest			$	1,104,327		$	—

	Issuances of preferred stock – redeemable, as payment for acquisitions			$	50,566		$	—

The accompanying notes are an integral part of these consolidated financial statements.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. ORGANIZATION AND BASIS OF PRESENTATION

Charter Communications, Inc. (Charter) is a holding company whose primary asset at September 30, 2001 is a 46.5% controlling equity interest in Charter Communications Holding Company, LLC (Charter Holdco), which in turn is the sole owner of Charter Communications, Holdings, LLC (Charter Holdings). Charter, Charter Holdco and its subsidiaries are collectively referred to herein as the “Company”. All material intercompany transactions and balances have been eliminated in consolidation. The Company owns and operates cable systems serving approximately 7 million customers at September 30, 2001. The Company currently offers a full range of traditional analog cable television services, along with an array of advanced products and services such as digital cable television, interactive video programming, cable modem high-speed Internet access and video-on-demand.

2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures typically included in the Company’s Annual Report on Form 10-K have been condensed or omitted for this Quarterly Report.

The accompanying consolidated financial statements are unaudited. However, in the opinion of management, such statements include all adjustments, which consist of only normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. Interim results are not necessarily indicative of results for a full year.

3. ACQUISITIONS

During 2000, the Company acquired cable systems in five separate transactions for an aggregate purchase price of $1.1 billion, net of cash acquired, excluding debt assumed of $963.3 million. In connection with the acquisitions, Charter issued shares of Class A common stock valued at approximately $178.0 million, and Charter Holdco and an indirect subsidiary of Charter Holdco issued equity interests totaling $384.6 million and $629.5 million, respectively.

On June 30, 2001, the Company completed several transactions with AT&T Broadband, LLC (AT&T) resulting in a net addition of approximately 554,000 customers in Missouri, Alabama, Nevada and California for a total purchase price of $1.77 billion, consisting of $1.75 billion in cash and a cable system in Florida valued at $24.4 million.

On August 31, 2001, the Company completed the acquisition of several cable systems from Cable USA, Inc. and its affiliates, resulting in a net addition of approximately 30,600 customers in Nebraska, Minnesota and Colorado for a total purchase price of $100.3 million (including certain assumed liabilities), consisting of $44.6 million in cash, 505,664 shares of Series A Convertible Redeemable Preferred Stock (the Preferred Stock) valued at $50.6 million and additional shares of Preferred Stock valued at $5.1 million to be issued to certain sellers subject to certain holdback provisions of the acquisition agreement.

The above transactions were accounted for using the purchase method of accounting, and, accordingly, the results of operations of the acquired assets have been included in the consolidated financial statements from their respective dates of acquisition. The purchase prices were allocated to assets and liabilities assumed based on relative fair values. The allocation of the purchase prices for the 2001 acquisitions is based, in part, on preliminary information, which is subject to adjustment upon obtaining complete valuation information. Management believes that finalization of the purchase prices and allocation thereof will not have material impact on the consolidated results of operations or financial position of the Company.

The operating results of the Company summarized which follow are presented on a pro forma basis as if the following had occurred on January 1, 2000 (dollars in thousands, except per share data): the AT&T transactions completed on June 30, 2001, all acquisitions completed during 2000, the issuance of Charter Holdings senior and senior discount notes in January 2001, the issuance by Charter of convertible senior notes in October and November 2000, the drawdown of Charter Holdings’ 2000 senior bridge loan facility, the issuance of Charter Holdings senior and senior discount notes in May 2001, and the issuance of and sale by Charter of convertible senior notes and common stock in May 2001. In addition, adjustments have been made to give effect to amortization of franchises, interest expense, minority interest, and certain other adjustments.


	NINE MONTHS ENDED SEPTEMBER 30,

	2001			2000

Revenues	$	3,007,751		$	2,649,465




Loss from operations		(880,948	)		(767,489	)




Net loss		(969,320	)		(795,563	)




Loss per common share, basic and diluted		(3.30	)		(2.71	)

The unaudited pro forma financial information does not purport to be indicative of the consolidated results of operations had these transactions been completed as of the assumed date or which may be obtained in the future. Information regarding debt transactions which occurred during 2000 is included in the Company’s 2000 Annual Report on Form 10-K.

On September 28, 2001, Charter Holdco and High Speed Access Corp. (HSA), signed a definitive asset purchase agreement for Charter Holdco to purchase the contracts and associated assets of HSA that serve the Company’s customers for a purchase price of approximately $81.1 million in cash and the assumption of certain liabilities, subject to certain closing adjustments and indemnity reserves. The agreement has been approved by the directors of Charter and HSA, and is expected to close later this year subject to certain closing conditions, including regulatory review and approval by HSA’s shareholders. Charter Holdco, Vulcan Ventures, and HSA directors, who collectively possess a majority of the voting power of HSA, have agreed to vote their shares in favor of the transaction. The transaction is also subject to approval by a majority of the votes cast by holders of HSA’s common stock, other than Charter Holdco, Vulcan Ventures and certain officers and directors of HSA. As of September 30, 2001, the carrying value of Charter’s investment in HSA is zero.

In connection with the HSA transaction contemplated above, Charter Holdco and Vulcan Ventures, a related party, entered into a stock purchase agreement pursuant to which Charter Holdco will purchase from Vulcan Ventures 38,000 shares of HSA Series D preferred stock, which represents all of HSA’s Series D preferred stock owned by Vulcan Ventures. The purchase price will be $8.0 million in cash and closing of the sale will occur immediately prior to the closing of the asset purchase agreement. The stock purchase agreement will terminate if the asset purchase agreement is terminated. As part of the consideration for the asset purchase agreement, all of the Series D preferred stock of HSA held by our subsidiary, Charter Ventures, and purchased from Vulcan Ventures will be cancelled.

4. LONG-TERM DEBT

Long-term debt consists of the following (dollars in thousands):


			SEPTEMBER 30,			DECEMBER 31,
			2001			2000

Charter Communications, Inc.:




		5.75% convertible senior notes due 2005	$	750,000		$	750,000




		4.75% convertible senior notes due 2006		632,500			—




Charter Communications Holdings, LLC:




	March 1999 Charter Holdings notes:




		8.250% senior notes due 2007		600,000			600,000




		8.625% senior notes due 2009		1,500,000			1,500,000




		9.920% senior discount notes due 2011		1,475,000			1,475,000




	January 2000 Charter Holdings notes:




		10.00% senior notes due 2009		675,000			675,000




		10.25% senior notes due 2010		325,000			325,000




		11.75% senior discount notes due 2010		532,000			532,000




	January 2001 Charter Holdings notes:




		10.75% senior notes due 2009		900,000			—




		11.125% senior notes due 2011		500,000			—




		13.50% senior discount notes due 2011		675,000			—




	May 2001 Charter Holdings notes:




		9.625% senior notes due 2009		350,000			—




		10.00% senior notes due 2011		575,000			—




		11.75% senior discount notes due 2011		1,018,000			—




	Charter Holdings 2000 senior bridge loan facility			—			272,500




Renaissance Media Group LLC:




		10.00% senior discount notes due 2011		114,413			114,413




CC V Holdings, LLC (Avalon):




		11.875% senior discount notes due 2006		179,750			179,750




Credit Facilities:




		Charter Operating		3,760,000			4,432,000




		CC Michigan, LLC and CC New England, LLC (Avalon)		—			213,000




		CC VI Operating Company, LLC (Fanch)		850,000			895,000




		Falcon Cable Communications, LLC		486,250			1,050,000




		CC VIII Operating, LLC (Bresnan)		1,002,000			712,000




Other debt				1,347			1,971

				16,901,260			13,727,634




Unamortized net discount				(1,246,521	)		(667,179	)

			$	15,654,739		$	13,060,455

In December 2000, Charter Holdings contributed all of its equity interests in one of its subsidiaries, CC VIII, LLC (CC VIII), to another subsidiary, CCV Holdings, combining the cable systems acquired in the Bresnan and Avalon acquisitions. In connection with this combination, in January 2001, the CC VIII Operating (Bresnan) credit facilities were amended and restated to, among other things, increase borrowing availability by $550.0 million. In addition, all amounts due under the Avalon credit facilities were repaid and the credit facilities were terminated.

In January 2001, Charter Holdings and its subsidiary, Charter Communications Holding Capital Corporation (Charter Capital), issued the January 2001 Charter Holdings notes with an aggregate principal amount at maturity of $2.1 billion (see preceding table). The net proceeds were approximately $1.7 billion, after giving effect to discounts, commissions and expenses. Charter Holdings used all the net proceeds to repay all remaining amounts outstanding under the Charter Holdings 2000 senior bridge loan facility and the revolving portion of the CC VI (Fanch) credit facility and a portion of amounts outstanding under the Charter Operating and the revolving portion of the CC VII (Falcon) credit facilities, and for general corporate purposes, including capital expenditures.

In May 2001, Charter Holdings and Charter Capital issued notes with an aggregate principal amount at maturity of $1.9 billion (see preceding table). The net proceeds were used to pay the cash purchase price of the AT&T transactions, repay certain amounts outstanding under the revolving portions of the credit facilities of our subsidiaries and for general corporate purposes, including capital expenditures.

In May 2001, Charter issued convertible senior notes with an aggregate principal amount at maturity of $632.5 million. The net proceeds were used to repay certain amounts outstanding under the revolving portions of the credit facilities of our subsidiaries and for general corporate purposes, including capital expenditures.

In September 2001, the Company amended its CC VII (Falcon) credit facility to provide for additional borrowings of up to $103.6 million. Terms of the revolving portion of the facility were also amended to provide for maturity in June 2007. Any additional borrowings will be used for general corporate purposes, including capital expenditures.

5. MINORITY INTEREST

As of September 30, 2001, minority interest consists primarily of total members’ equity of Charter Holdco ($6.8 billion) multiplied by 53.5%, the ownership percentage of Charter Holdco not owned by Charter, and of preferred equity in CC VIII, LLC which is held by certain Bresnan sellers. Gains and losses arising from the issuance by Charter Holdco of its membership units are recorded as capital transactions, thereby increasing or decreasing shareholders’ equity and decreasing or increasing minority interest on the accompanying consolidated balance sheets.

Changes to minority interest consist of the following (dollars in thousands):


Balance, December 31, 2000	$	4,089,329




Minority interest in loss of subsidiary		(1,129,357	)




Equity reclassified from redeemable securities (26,539,746 shares of Class A common stock)		1,096,075




Gain on issuance of equity by Charter Holdco		294,067




Other		(46,751	)

Balance, September 30, 2001	$	4,303,363

6. REDEEMABLE SECURITIES

In February 2001, all remaining rescission rights associated with the Company’s existing redeemable securities expired without the security holders requesting repurchase of their securities. Accordingly, the Company reclassified the respective amounts to minority interest and shareholders’ equity, as applicable.

7. PREFERRED STOCK – REDEEMABLE

Holders of the Preferred Stock have no voting rights but are entitled to receive cumulative cash dividends at an annual rate of 5.75%, payable quarterly. If for any reason Charter fails to pay the dividends on the Preferred Stock on a timely basis, the dividend rate on each share increases to an annual rate of 7.75% until the payment is made. The Preferred Stock is redeemable by Charter at its option on or after August 31, 2004 and must be redeemed by Charter at any time upon a change of control, or if not previously redeemed or converted, on August 31, 2008. The Preferred Stock is convertible, in whole or in part, at the option of the holders from April 1, 2002 through August 31, 2008, into shares of common stock at an initial conversion rate equal to a conversion price of $24.71 per share of common stock, subject to certain customary adjustments. The redemption price per share of Preferred Stock is the Liquidation Preference of $100, subject to certain customary adjustments.

8. COMMON STOCK

In May 2001, Charter issued 60,247,350 shares of common stock for net cash proceeds totaling $1.2 billion. The net proceeds were used to repay certain amounts outstanding under the revolving credit facilities of our subsidiaries and for general corporate purposes, including capital expenditures.

9. STOCK BASED COMPENSATION

In September 2001, when the Company’s former President and Chief Executive Officer terminated his employment, he forfeited an option to purchase 7.0 million Charter Holdco membership units, of which 4.8 million had vested. Accordingly, the Company recorded a reversal of previously recorded compensation expense of $66.6 million.

During September and October 2001, in connection with new employment agreements and related option agreements entered into by the Company, certain executives of the Company were awarded an aggregate of 256,000 shares of restricted common stock that vested 25% upon grant, with the remaining shares vesting monthly over a three-year period beginning after the first anniversary of the date of grant.

10. REVENUES

Revenues consist of the following (dollars in millions):


	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,

	2001		2000		2001		2000

Analog video	$	730.3	$	637.7	$	2,045.9	$	1,861.4




Digital video		86.3		25.1		210.0		48.4




Cable modem		43.9		13.2		101.9		36.3




Advertising sales		83.8		67.4		204.0		142.5




Other		99.5		95.6		284.3		266.7

	$	1,043.8	$	839.0	$	2,846.1	$	2,355.3

11. OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES

Operating, general and administrative expenses consist of the following (dollars in millions):


	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,

	2001		2000		2001		2000

General, administrative and service	$	228.0	$	191.8	$	617.4	$	541.8




Analog video programming		237.3		180.9		659.5		527.4




Digital video		31.1		10.0		75.9		23.4




Cable modem		28.9		11.7		67.0		25.4




Advertising sales		17.2		15.2		46.1		40.6




Marketing		18.8		16.4		54.0		45.7

	$	561.3	$	426.0	$	1,519.9	$	1,204.3

12. COMPREHENSIVE LOSS

The Company owns common stock that is classified as available-for-sale and reported at market value, with unrealized gains and losses recorded to accumulated other comprehensive loss and minority interest in the accompanying consolidated balance sheets. For derivative instruments the Company owns which are effective in hedging variable interest payments into fixed payments, the Company records the gains or losses on the effective portion of the hedge to accumulated other comprehensive loss and minority interest in the accompanying consolidated balance sheets. For the three months ended September 30, 2001 and 2000, comprehensive loss was $329.6 million and $210.0 million, respectively. For the nine months ended September 30, 2001 and 2000, comprehensive loss was $890.3 million and $588.0 million, respectively.

13. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company uses interest rate risk management derivative instruments, such as interest rate swap agreements, interest rate cap agreements and interest rate collar agreements (collectively referred to herein as interest rate agreements) as required under the terms of its credit facilities. The Company’s policy is to manage interest costs using a mix of fixed and variable rate debt. Using interest rate swap agreements, the Company agrees to exchange, at specified intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. Interest rate cap agreements are used to lock in a maximum interest rate should variable rates rise, but enable the Company to otherwise pay lower market rates. Interest rate collar agreements are used to limit the Company’s exposure to and benefits from interest rate fluctuations on variable rate debt to within a certain range of rates.

Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standard No. 133 “Accounting for Derivative Instruments and Hedging Activities” (SFAS No. 133). The Company’s interest rate agreements are recorded in the consolidated balance sheet at September 30, 2001 as either an asset or liability measured at fair value. In connection with the adoption of SFAS No. 133, the Company recorded a loss of $23.9 million for the cumulative effect of change in accounting principle as other expense. The effect of adoption was to increase other expense and loss before minority interest, net loss and loss per share by $23.9 million, $9.8 million and $0.04, respectively, for the nine months ended September 30, 2001.

The Company has certain interest rate derivative instruments which have been designated as cash flow hedging instruments. Such instruments are those which effectively convert variable interest payments on debt instruments into fixed payments. For qualifying hedges, SFAS No. 133 allows derivative gains and losses to offset related results on hedged items in the consolidated statement of operations. The Company has formally documented, designated and assessed the effectiveness of transactions that receive hedge accounting. For the three and nine month periods ended September 30, 2001, other expense includes $1.5 million and $0.9 million of losses, respectively, which represent cash flow hedge ineffectiveness on interest rate hedge agreements arising from differences between the critical terms of the agreements and the related hedged obligations. Changes in the fair value of interest rate agreements designated as hedging instruments of the variability of cash flows associated with floating-rate debt obligations are reported in accumulated other comprehensive loss. At September 30, 2001, included in accumulated other comprehensive loss was a loss of $41.3 million related to derivative instruments designated as cash flow hedges. The amounts are subsequently reclassified into interest expense as a yield adjustment in the same period in which the related interest on the floating-rate debt obligations affects earnings or losses.

Certain interest rate derivative instruments are not designated as hedges as they do not meet the effectiveness criteria specified by SFAS No. 133. However, the Company believes such instruments are closely correlated with the respective debt, thus managing associated risk. Interest rate derivative instruments not designated as hedges are marked to fair value with the impact recorded as other income or expense. For the three and nine months ended September 30, 2001, the Company recorded other expense of $70.9 million and $84.2 million for interest rate derivative instruments not designated as hedges.

14. NEW ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, “Business Combinations”, No. 142, “Goodwill and Other Intangible Assets” and No. 143, “Accounting for Asset Retirement Obligations.” SFAS No. 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting. SFAS No. 141 is required to be implemented for all acquisitions initiated after June 30, 2001 and all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001 or later. Adoption of SFAS No. 141 will not impact the consolidated financial statements of the Company.

Under SFAS No. 142, goodwill and other indefinite lived intangible assets are no longer subject to amortization over their useful lives, rather, they are subject to at least annual assessments for impairment. Also, under SFAS No. 142, an intangible asset should be recognized if the benefit of the intangible asset is obtained through contractual or other legal rights or if the intangible asset can be sold, transferred, licensed, rented or exchanged. Such intangibles will be amortized over their useful lives. SFAS No. 142 will be implemented by the Company on January 1, 2002 and all goodwill and intangible assets acquired after June 30, 2001 will be immediately subject to the provisions of SFAS No. 142. Upon adoption, the Company will no longer amortize indefinite lived intangible assets, which consist primarily of cable franchise operating rights. The Company will test these assets for impairment at least annually. Other than during any periods in which the Company may record a charge for impairment, the Company expects that the adoption of SFAS No. 142 will result in increased income as a result of reduced amortization expense. Based on the Company’s

preliminary evaluation, the estimated costs incurred during the three and nine months ended September 30, 2001, which will not be recurring costs subsequent to adoption, were $338.9 million and $973.1 million, respectively.

Under SFAS No. 143, the fair value of a liability for an asset retirement obligation is required to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. SFAS No. 143 will be implemented by the Company on January 1, 2002. Adoption of SFAS No. 143 will not have a material impact on the consolidated financial statements of the Company.

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed of and supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.” SFAS No. 144 establishes a single accounting model for long-lived assets to be disposed of by sale and resolves implementation issues related to SFAS No. 121. SFAS No. 144 will be implemented by the Company on January 1, 2002. Adoption of SFAS No. 144 will not have a material impact on the consolidated financial statements of the Company.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

Reference is made to the “Certain Trends and Uncertainties” section in this Management’s Discussion and Analysis for a discussion of important factors that could cause actual results to differ from expectations and non-historical information contained herein.

GENERAL

Charter Communications, Inc. is a holding company whose primary asset at September 30, 2001 is a 46.5% controlling equity interest in Charter Holdco. The Company owns and operates cable systems serving approximately 7 million customers at September 30, 2001. The Company currently offers a full range of traditional analog cable television services, along with an array of advanced services such as digital cable television, interactive video programming, cable modem high-speed Internet access and video-on-demand.

The following table presents various operating statistics as of September 30, 2001 and 2000:


	September 30,

	2001			2000

ANALOG VIDEO




Homes Passed		11,485,900			10,160,200




Basic Customers		6,970,100			6,318,300




Basic Penetration		60.7	%		62.2	%




Premium Units		6,050,500			4,426,200




Premium Penetration		86.8	%		70.1	%




Average Monthly Revenue per Basic Customer (quarter)	$	49.92		$	44.26




DIGITAL VIDEO




Homes Passed		10,366,600			7,568,000




Digital Customers		1,951,200			653,800




Penetration of Digital Homes Passed		18.8	%		8.6	%




Penetration of Basic Customers		28.0	%		10.3	%




Digital Converters Deployed		2,611,000			807,900




DATA




Homes Passed		6,479,700			4,580,400




Data Customers		545,900			184,600




Penetration		8.4	%		4.0	%

ACQUISITIONS

The following table sets forth information on acquisitions since January 1, 2000:


					PURCHASE
					PRICE,
					INCLUDING DEBT		NET
			ACQUISITION		ASSUMED		ACQUIRED
			DATE		(IN MILLIONS)		CUSTOMERS

Interlake				1/00	$	13		6,000




Bresnan				2/00		3,078		695,800




Capital Cable				4/00		60		23,200




Farmington Cable				4/00		15		5,700




Kalamazoo				9/00		171		50,700

	Total during 2000					3,337		781,400

AT&T systems				6/01		1,770		554,000




Cable USA				8/01		100		30,600

	Total during 2001					1,870		584,600

		Total			$	5,207		1,366,000

On June 30, 2001, we completed several cable system transactions with AT&T resulting in a net addition of approximately 554,000 customers in Missouri, Alabama, Nevada and California for a total of $1.77 billion, consisting of $1.75 billion in cash and a cable system located in Florida valued at $24.4 million.

On August 31, 2001, we completed the acquisition of several cable systems from Cable USA, Inc. and its affiliates, resulting in a net addition of approximately 30,600 customers in Nebraska, Minnesota and Colorado for $44.6 million in cash (including certain assumed liabilities) and $55.6 million in Series A Convertible Redeemable Preferred Stock (the Preferred Stock), $5.1 million of which is subject to certain holdback provisions and has not yet been issued.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2001 Compared to Three Months Ended September 30, 2000

The following table sets forth the percentages of revenues that items in the accompanying consolidated statements of operations constitute for the indicated periods (dollars in millions, except per share data):


					THREE MONTHS ENDED SEPTEMBER 30,

					2001						2000

								% OF						% OF
					AMOUNT			REVENUES			AMOUNT			REVENUES

Revenues					$	1,043.8			100.0	%	$	839.0			100.0	%

Operating expenses:




	Operating, general and administrative					561.3			53.8	%		426.0			50.8	%




		Depreciation and amortization				775.4			74.3	%		628.1			74.9	%




		Option compensation expense				(57.1	)		(5.5	%)		8.1			1.0	%




		Corporate expenses				15.0			1.4	%		14.1			1.7	%

						1,294.6			124.0	%		1,076.3			128.4	%

				Loss from operations		(250.8	)		(24.0	%)		(237.3	)		(28.4	%)




Other income (expense):




	Interest expense					(342.2	)		(32.8	%)		(283.3	)		(33.8	%)




	Interest income					1.9			0.2	%		0.6			—




	Other expense					(88.9	)		(8.5	%)		(3.4	)		(0.4	%)

						(429.2	)		(41.1	%)		(286.1	)		(34.2	%)

			Loss before minority interest			(680.0	)		(65.1	%)		(523.4	)		(62.6	%)

Minority interest in loss of subsidiary						362.6			34.7	%		313.4			37.4	%

	Net loss				$	(317.4	)		(30.4	%)	$	(210.0	)		(25.2	%)




Dividends on preferred stock, redeemable						(0.2	)		(0.0	%)		—			0.0	%

	Net loss applicable to common stock				$	(317.6	)		(30.4	%)	$	(210.0	)		(25.2	%)

Loss per common share, basic and diluted					$	(1.08	)				$	(0.93	)

Revenues. Revenues increased by $204.8 million, or 24.4%, from $839.0 million for the three months ended September 30, 2000 to $1,043.8 million for the three months ended September 30, 2001. System operations existing before January 1, 2000 accounted for $113.7 million, or 55.5% of the increase, while systems acquired after January 1, 2000 accounted for $91.1 million, or 44.5%, of the increase. Revenues by service offering are as follows (dollars in millions):


	THREE MONTHS ENDED SEPTEMBER 30,

	2001					2000					2001 OVER 2000

			% OF					% OF					%
	AMOUNT		REVENUES			AMOUNT		REVENUES			CHANGE		CHANGE

Analog video	$	730.3		70.0	%	$	637.7		76.0	%	$	92.6		14.5	%




Digital video		86.3		8.3	%		25.1		3.0	%		61.2		243.8	%




Cable modem		43.9		4.2	%		13.2		1.6	%		30.7		232.6	%




Advertising sales		83.8		8.0	%		67.4		8.0	%		16.4		24.3	%




Other		99.5		9.5	%		95.6		11.4	%		3.9		4.1	%

	$	1,043.8		100.0	%	$	839.0		100.0	%	$	204.8

Analog video customers increased by 651,800, or 10.3%, to 6,970,100 at September 30, 2001 as compared to 6,318,300 at September 30, 2000. Of this increase, approximately 584,600 customer additions were the result of acquisitions. The remaining increase of 67,200 customers relates to internal growth. Internal growth, as it is used throughout, represents all additions excluding those initially obtained through acquisition.

Digital video customers increased by 1,297,400, or 198.4%, to 1,951,200 at September 30, 2001 from 653,800 at September 30, 2000. The increase was primarily due to internal growth which continues to increase as we upgrade our systems to provide advanced services to a larger customer base. Increased marketing efforts and strong demand for this service have also contributed to the increase.

Data customers increased by 361,300, or 195.7%, to 545,900 at September 30, 2001 from 184,600 at September 30, 2000. Data customers consisted of 507,700 cable modem customers and 38,200 dial-up customers at September 30, 2001. The increase was primarily due to internal growth. Our system upgrades continue to increase our ability to offer high-speed interactive service to a larger customer base. Growth in data services was also the result of strong marketing efforts coupled with increased demand for such services.

Advertising sales increased $16.4 million, or 24.3%, from $67.4 million for the three months ended September 30, 2000 to $83.8 million for the three months ended September 30, 2001. The increase was primarily due to internal growth and was partially offset by a weakening advertising environment. As a result of our rebuild efforts, we experienced increased capacity due to expanded channel line-ups. In addition, the level of advertising purchased by programmers to promote their channels, added as part of our expansion of channel line-ups, increased during 2001 compared to the corresponding period in 2000.

Operating, General and Administrative Costs. Operating, general and administrative costs increased by $135.3 million, from $426.0 million for the three months ended September 30, 2000 to $561.3 million for the three months ended September 30, 2001. Key components of expense as a percentage of revenues are as follows (dollars in millions):


	THREE MONTHS ENDED SEPTEMBER 30,

	2001					2000					2001 OVER 2000

			% OF					% OF					%
	AMOUNT		REVENUES			AMOUNT		REVENUES			CHANGE		CHANGE

General, administrative and service	$	228.0		21.9	%	$	191.8		22.9	%	$	36.2		18.9	%




Analog video programming		237.3		22.7	%		180.9		21.6	%		56.4		31.2	%




Digital video		31.1		3.0	%		10.0		1.2	%		21.1		211.0	%




Cable modem		28.9		2.8	%		11.7		1.4	%		17.2		147.0	%




Advertising sales		17.2		1.6	%		15.2		1.8	%		2.0		13.2	%




Marketing		18.8		1.8	%		16.4		1.9	%		2.4		14.6	%

	$	561.3		53.8	%	$	426.0		50.8	%	$	135.3

The increase in general, administrative and service costs of $36.2 million was due to increased bad debt expense resulting from the discounting of our analog product, coupled with increased spending on customer care and overall continued growth. The increase in analog video programming of $56.4 million was due to continued inflationary and negotiated increases, particularly in sports

programming, coupled with increased channel capacity. The increase of $21.1 million in direct operating costs to provide digital video services was primarily due to internal growth of these advanced services. The increase of $17.2 million in direct operating costs to provide cable modem services was primarily due to internal growth. Advertising sales costs increased $2.0 million due to internal growth and increased channel capacity. Marketing expenses increased $2.4 million related to an increased level of promotions of our service offerings.

Gross Margin. Gross margin decreased by 3.0%, from 49.2% for the three months ended September 30, 2000 to 46.2% for the three months ended September 30, 2001 primarily due to the acquisition of less profitable cable systems from AT&T. Gross margin on analog video decreased by 4.1% from 71.6% for the three months ended September 30, 2000 to 67.5% in 2001 primarily due to continued inflation and negotiated increases in programming. Digital video gross margin increased 3.8% from 60.2% for the three months ended September 30, 2000 to 64.0% in 2001 primarily due to an increased customer base. Cable modem gross margin increased 22.8% from 11.4% for the three months ended September 30, 2000 to 34.2% in 2001 primarily due to an increased customer base. Advertising sales gross margin increased by 2.1%, from 77.4% for the three months ended September 30, 2000 to 79.5% in 2001 primarily due to expanded channel capacity as a result of our significant system upgrades, coupled with increased advertising purchases by programmers.

Depreciation and Amortization. Depreciation and amortization expense increased by $147.3 million, from $628.1 million for the three months ended September 30, 2000 to $775.4 million for the three months ended September 30, 2001. This increase was due to capital expenditures under our rebuild and upgrade program in 2000 and 2001 and amortization of franchises in connection with acquisitions completed in September 2000 and June 2001.

Option Compensation Expense. Option compensation expense decreased by $65.2 million, from $8.1 million for the three months ended September 30, 2000 to income of $57.1 million for the three months ended September 30, 2001. This decrease is primarily the result of the reversal of expense previously recorded in connection with approximately seven million options forfeited by our former President and Chief Executive Officer as part of his September 2001 separation agreement. This was partially offset by expense recorded because exercise prices on certain options were less than the estimated fair values of our stock at the time of grant. Compensation expense is being accrued over the vesting period of the options and will continue to be recorded at a decreasing rate until the last vesting period lapses in April 2004.

Corporate Expenses. Corporate expenses increased by $0.9 million, from $14.1 million for the three months ended September 30, 2000 to $15.0 million for the three months ended September 30, 2001. The increase was primarily the result of continued growth.

Interest Expense. Interest expense increased by $58.9 million, from $283.3 million for the three months ended September 30, 2000 to $342.2 million for the three months ended September 30, 2001. The increase in interest expense was a result of an increase in average debt outstanding of $3.6 billion to $15.6 billion for the third quarter of 2001 compared to $12.0 billion for the third quarter of 2000, partially offset by a decline in our weighted average borrowing rate of 1.16% to 8.12% in the third quarter of 2001 from 9.28% in the third quarter of 2000. Our weighted average borrowing rate decreased primarily as a result of our issuance of the 4.75% convertible senior notes in May 2001, coupled with a general decline in variable borrowing rates. The increased debt primarily relates to the issuance of the January 2001 and the May 2001 Charter Holdings notes and Charter’s May 2001 4.75% convertible senior notes used to fund acquisitions and other general corporate purposes.

Interest Income. Interest income increased by $1.3 million, from $0.6 million for the three months ended September 30, 2000 to $1.9 million for the three months ended September 30, 2001. The increase in interest income was due to higher average cash on hand during the three months ended September 30, 2001 as compared to the three months ended September 30, 2000 as a result of the issuance of the May 2001 Charter Holdings notes, Charter’s May 2001 4.75% convertible senior notes and 60,247,350 shares of Charter common stock.

Other Expense. Other expense increased by $85.4 million, from $3.5 million for the three months ended September 30, 2000 to $88.9 million for the three months ended September 30, 2001. This increase was primarily due to a loss of $72.4 million on interest rate agreements as a result of SFAS No. 133 and losses on investments of $10.8 million in the three months ended September 30, 2001.

Minority Interest. Minority interest increased by $49.2 million, from $313.4 million for the three months ended September 30, 2000 to $362.6 million for the three months ended September 30, 2001. The minority interest represents the ownership in Charter Holdco by entities other than Charter.

Net Loss. Net loss increased by $107.4 million, from $210.0 million for the three months ended September 30, 2000 to $317.4 million for the three months ended September 30, 2001 as a result of the factors described above.

Loss per Common Share. The loss per common share increased by $0.15, from $0.93 per common share for the three months ended September 30, 2000 to $1.08 per common share for the three months ended September 30, 2001 as a result of the factors described above, partially offset by an increase in weighted average shares outstanding due to the issuance of 60,247,350 shares of Charter common stock in May 2001.

Nine Months Ended September 30, 2001 Compared to Nine Months Ended September 30, 2000


					NINE MONTHS ENDED SEPTEMBER 30,

					2001						2000

								% OF						% OF
					AMOUNT			REVENUES			AMOUNT			REVENUES

	Revenues				$	2,846.1			100.0	%	$	2,355.3			100.0	%

	Operating expenses:




			Operating, general and administrative			1,519.9			53.4	%		1,204.3			51.1	%




			Depreciation and amortization			2,192.3			77.0	%		1,777.9			75.5	%




			Option compensation expense			(46.2	)		(1.6	%)		34.2			1.5	%




			Corporate expenses			42.7			1.5	%		41.6			1.7	%

						3,708.7			130.3	%		3,058.0			129.8	%

				Loss from operations		(862.6	)		(30.3	%)		(702.7	)		(29.8	%)




	Other income (expense):




			Interest expense			(978.0	)		(34.4	%)		(765.3	)		(32.5	%)




			Interest income			12.0			0.4	%		6.7			0.3	%




			Other expense			(172.8	)		(6.0	%)		(6.0	)		(0.3	%)

						(1,138.8	)		(40.0	%)		(764.6	)		(32.5	%)

				Loss before minority interest		(2,001.4	)		(70.3	%)		(1,467.3	)		(62.3	%)

	Minority interest in loss of subsidiary					1,129.4			39.7	%		879.7			37.4	%

				Net loss	$	(872.0	)		(30.6	%)	$	(587.6	)		(24.9	%)

Dividends on preferred stock, redeemable						(0.2	)		(0.0	%)		—			0.0	%

		Net loss applicable to common stock			$	(872.2	)		(30.6	%)	$	(587.6	)		(24.9	%)

Loss per common share, basic and diluted					$	(3.34	)				$	(2.63	)

Revenues. Revenues increased by $490.8 million, or 20.8%, from $2.4 billion for the nine months ended September 30, 2000 to $2.8 billion for the nine months ended September 30, 2001. System operations existing before January 1, 2000 accounted for $356.4 million, or 72.6%, of the increase, while systems acquired after January 1, 2000 accounted for $134.4 million, or 27.4%, of the increase. Revenues by service offering are as follows (dollars in millions):


	NINE MONTHS ENDED SEPTEMBER 30,

	2001					2000					2001 OVER 2000

			% OF					% OF					%
	AMOUNT		REVENUES			AMOUNT		REVENUES			CHANGE		CHANGE

Analog video	$	2,045.9		71.9	%	$	1,861.4		79.0	%	$	184.5		9.9	%




Digital video		210.0		7.3	%		48.4		2.1	%		161.6		333.9	%




Cable modem		101.9		3.6	%		36.3		1.5	%		65.6		180.7	%




Advertising sales		204.0		7.2	%		142.5		6.1	%		61.5		43.2	%




Other		284.3		10.0	%		266.7		11.3	%		17.6		6.6	%

	$	2,846.1		100.0	%	$	2,355.3		100.0	%	$	490.8

Advertising sales increased $61.5 million, from $142.5 million for the nine months ended September 30, 2000 to $204.0 million for the nine months ended September 30, 2001. The increase was primarily due to internal growth and was partially offset by a weakening advertising environment. As a result of our rebuild efforts, we experienced increased capacity due to expanded channel line-ups. In addition, the level of advertising purchased by programmers to promote their channels, added as part of our expansion of channel line-ups, increased during 2001 compared to the corresponding period in 2000.

Operating, General and Administrative Costs. Operating, general and administrative costs increased by $315.6 million, from $1.2 billion for the nine months ended September 30, 2000 to $1.5 billion for the nine months ended September 30, 2001. Key components of expense as a percentage of revenues are as follows (dollars in millions):


	NINE MONTHS ENDED SEPTEMBER 30,

	2001					2000					2001 OVER 2000

			% OF					% OF					%
	AMOUNT		REVENUES			AMOUNT		REVENUES			CHANGE		CHANGE

General, administrative and service	$	617.4		21.7	%	$	541.8		23.0	%	$	75.6		14.0	%




Analog video programming		659.5		23.1	%		527.4		22.4	%		132.1		25.0	%




Digital video		75.9		2.7	%		23.4		1.0	%		52.5		224.4	%




Cable modem		67.0		2.4	%		25.4		1.1	%		41.6		163.8	%




Advertising sales		46.1		1.6	%		40.6		1.7	%		5.5		13.5	%




Marketing		54.0		1.9	%		45.7		1.9	%		8.3		18.2	%

	$	1,519.9		53.4	%	$	1,204.3		51.1	%	$	315.6

The increase in general, administrative and service costs of $75.6 million was due to increased bad debt expense resulting from the discounting of our analog product, coupled with increased spending on customer care and overall continued growth. The increase in analog video programming of $132.1 million was primarily due to continued inflationary or negotiated increases, primarily in sports programming, coupled with increased channel capacity. The increase of $52.5 million in direct operating costs to provide digital video services was primarily due to internal growth of these advanced services. The increase of $41.6 million in direct operating costs to provide cable modem services was primarily due to internal growth. Advertising sales costs increased $5.5 million due to internal growth and increased channel capacity. Marketing expenses increased $8.3 million related to an increased level of promotions of our service offerings.

Gross Margin. Gross margin decreased by 2.3%, from 48.9% for the nine months ended September 30, 2000 to 46.6% for the nine months ended September 30, 2001 primarily due to the acquisition of less profitable cable systems from AT&T. Gross margin on analog video decreased by 3.9% from 71.7% for the nine months ended September 30, 2000 to 67.8% in 2001 primarily due to continued inflation and negotiated increases in programming costs. Digital video gross margin increased 12.2% from 51.7% for the nine months ended September 30, 2000 to 63.9% in 2001 primarily due to an increased customer base. Cable modem gross margin increased 4.2% from 30.0% for the nine months ended September 30, 2000 to 34.2% in 2001 due to an increased customer base. Advertising sales gross margin increased 5.9% from 71.5% for the nine months ended September 30, 2000 to 77.4% in 2001 due to expanded channel capacity as a result of our significant system upgrades, coupled with increased advertising purchases by programmers.

Depreciation and Amortization. Depreciation and amortization expense increased by $0.4 billion, from $1.8 billion for the nine months ended September 30, 2000 to $2.2 billion for the nine months ended September 30, 2001. This increase was due to capital expenditures under our rebuild and upgrade program in 2000 and 2001 and amortization of franchises in connection with acquisitions completed in September 2000 and June 2001.

Option Compensation Expense. Option compensation expense decreased by $80.4 million, from $34.2 million for the nine months ended September 30, 2000 to income of $46.2 million for the nine months ended September 30, 2001. This decrease is primarily the result of the reversal of expense previously recorded in connection with approximately seven million options forfeited by our former President and Chief Executive Officer as part of his September 2001 separation agreement. This was partially offset by expense recorded because exercise prices on certain options were less than the estimated fair values of our stock at the time of grant. Compensation expense is being accrued over the vesting period of the options and will continue to be recorded at a decreasing rate until the last vesting period lapses in April 2004.

Corporate Expenses. Corporate expenses increased by $1.1 million, from $41.6 million for the nine months ended September 30, 2000 to $42.7 million for the nine months ended September 30, 2001. The increase was primarily the result of continued growth.

Interest Expense. Interest expense increased by $212.7 million, from $765.3 million for the nine months ended September 30, 2000 to $978.0 million for the nine months ended September 30, 2001. The increase in interest expense was a result of an increase in average debt outstanding of $3.7 billion to $14.5 billion for the nine months ended September 30, 2001 compared to $10.8 billion for the nine months ended September 30, 2000, partially offset by a decline in our weighted average borrowing rate of 0.68% to 8.38% in the nine months ended September 30, 2001 from 9.06% in the nine months ended September 30, 2000. Our weighted average borrowing rate decreased primarily as a result of our issuance of 4.75% convertible senior notes in May 2001, coupled with a general decline in variable borrowing rates. The increased debt primarily relates to the issuance of the January 2001 and the May 2001 Charter Holdings notes and Charter’s issuance of the May 2001 4.75% convertible senior notes used to fund acquisitions and other general corporate purposes.

Interest Income. Interest income increased by $5.4 million, from $6.7 million for the nine months ended September 30, 2000 to $12.1 million for the nine months ended September 30, 2001. The increase in interest income was due to higher average cash on hand during the nine months ended September 30, 2001 as compared to the nine months ended September 30, 2000 as a result of the issuance of the May 2001 Charter Holdings notes, Charter’s May 2001 4.75% convertible senior notes and 60,247,350 shares of Charter common stock.

Other Expense. Other expense increased by $166.8 million, from $6.0 million of income for the nine months ended September 30, 2000 to $172.8 million of expense for the nine months ended September 30, 2001. This increase was primarily due to a cumulative effect of a change in accounting principle of $23.9 million related to our adoption of SFAS No. 133 on January 1, 2001, a loss of $85.1 million on interest rate agreements as a result of SFAS No. 133 and losses of $46.8 million on investments.

Minority Interest. Minority interest increased by $249.7 million, from $879.7 million for the nine months ended September 30, 2000 to $1,129.4 million for the nine months ended September 30, 2001. The minority interest represents the ownership in Charter Holdco by entities other than Charter.

Net Loss. Net loss increased by $284.4 million, from $587.6 million for the nine months ended September 30, 2000 to $872.0 million for the nine months ended September 30, 2001 as a result of the factors described above.

Loss per Common Share. The loss per common share increased by $0.71, from $2.63 per common share for the nine months ended September 30, 2000 to $3.34 per common share for the nine months ended September 30, 2001 as a result of the factors described above, partially offset by an increase in weighted average shares outstanding due to the issuance of 60,247,350 shares of Charter common stock in May 2001.

LIQUIDITY AND CAPITAL RESOURCES

Our business requires significant cash to fund acquisitions, capital expenditures, debt service costs and ongoing operations. We have historically funded and expect to fund future liquidity and capital requirements through cash flows from operations, borrowings under our credit facilities and debt and equity transactions. Our cash flows from operating activities were $302.5 million and $856.4 million for the nine months ended September 30, 2001 and 2000, respectively. The decline in cash flows from operating activities was due primarily to timing of payments. As of September 30, 2001, we had $15.2 million in cash. In addition to the cash on hand as of

September 30, 2001, we have unused availability of $2.9 billion under our bank credit facilities. In recent years, we have incurred significant additional debt to fund our capital expenditures and acquisitions. Our significant amount of debt may adversely affect our ability to obtain financing in the future and react to changes in our business. Our credit facilities and other debt instruments contain various financial and operating covenants that could adversely impact our ability to operate our business, including restrictions on the ability of our operating subsidiaries to distribute cash to their parents. See “—Certain Trends and Uncertainties—Restrictive Covenants” for further information.

INVESTING ACTIVITIES

Capital Expenditures. We have substantial ongoing capital expenditure requirements. We make capital expenditures primarily to upgrade, rebuild and expand our cable systems, as well as for system improvements, for the development of new products and services and deployment of digital converters and cable modems. Upgrading our cable systems will enable us to offer an increasing variety of advanced products and services, including digital television, additional channels and tiers, expanded pay-per-view options, cable modem high-speed Internet access, video-on-demand and interactive services, to a larger customer base.

We made capital expenditures, excluding acquisitions of cable systems, of $2.2 billion and $1.9 billion for the nine months ended September 30, 2001 and 2000, respectively. The majority of the capital expenditures in 2001 relates to our rebuild and upgrade program and purchases of converters and cable modems, and was funded from cash flows from operations, the issuance of common stock and debt, and borrowings under credit facilities.

Excluding the AT&T and Cable USA transactions, for 2001, 2002 and 2003, we expect to spend a total of approximately $2.9 billion, $1.9 billion and $1.2 billion, respectively, to upgrade and rebuild our systems in order to offer advanced services to our customers and for normal recurring capital expenditures which is an increase over our previous expectations due to increased capital expenditure amounts for the expansion of video-on-demand to our digital customers. Capital expenditures for the AT&T and Cable USA transactions are expected to be $150.0 million, $500.0 million, and $250.0 million in 2001, 2002, and 2003, respectively which includes $365.0 million for upgrades and rebuilds of these systems with the remainder allocated to normal recurring capital expenditures. Normal recurring capital expenditures will include extensions of systems, development of new products and services, purchases of converters and cable modems, system improvements and the build-out of advanced customer call centers. The amount that we spend on these types of capital expenditures will depend on the level of our growth in digital cable customer base and in the delivery of other advanced services. We currently anticipate that we will have sufficient capital to fund our capital expenditures through 2003, after which time we expect that cash flows from operations will fund our capital expenditures and interest expense. If there is accelerated growth in digital cable customers or in the delivery of other advanced services, or if we acquire substantial additional customers, however, we may need to obtain additional capital. If we are not able to obtain such capital it could adversely affect our ability to offer new products and services and compete effectively, and could adversely affect our growth, financial condition and results of operations. See “—Certain Trends and Uncertainties” for further information.

FINANCING ACTIVITIES

As of September 30, 2001 and December 31, 2000, long-term debt totaled approximately $15.7 billion and $13.1 billion, respectively. This debt was comprised of approximately $6.1 billion and $7.3 billion of bank debt, $8.2 billion and $5.0 billion of high-yield bonds and $1.4 billion and $750.0 million of convertible debt at September 30, 2001 and December 31, 2000, respectively. As of September 30, 2001 and December 31, 2000, the weighted average rate on the bank debt was approximately 6.3% and 8.8%, respectively, while the weighted average rate on the high-yield and convertible debt was approximately 9.5% and 9.5%, respectively, resulting in a blended weighted average rate of 8.2% and 8.6%, respectively. Approximately 80% of our debt was effectively fixed including the effects of our interest rate hedge agreements as of September 30, 2001 as compared to approximately 60% as of December 31, 2000.

January 2001 Charter Holdings Notes. In January 2001, Charter Holdings and Charter Capital issued $900.0 million 10.75% senior notes due 2009, $500.0 million 11.125% senior notes due 2011 and $350.6 million 13.5% senior discount notes due 2011 with a principal amount at maturity of $675.0 million. The net proceeds were approximately $1.7 billion, after giving effect to discounts, commissions and expenses. The net proceeds from the January 2001 Charter Holdings notes were used to repay all remaining amounts outstanding under the Charter Holdings 2000 senior bridge loan facility and the CC VI (Fanch) revolving credit facility and a portion of the amounts outstanding under the Charter Operating and the CC VII (Falcon) revolving credit facilities, and for general corporate purposes.

The 10.75% senior notes are not redeemable prior to maturity. Interest is payable semi-annually on April 1 and October 1, beginning October 1, 2001 until maturity.

The 11.125% senior notes are redeemable at our option at amounts decreasing from 105.563% to 100% of par value beginning on January 15, 2006, plus accrued and unpaid interest, to the date of redemption. At any time prior to January 15, 2004, the issuers may redeem up to 35% of the aggregate principal amount of the 11.125% senior notes at a redemption price of 111.125% of the principal amount under certain conditions. Interest is payable semi-annually in arrears on January 15 and July 15, beginning on July 15, 2001, until maturity.

The 13.5% senior discount notes are redeemable at the option of the issuers at amounts decreasing from 106.750% to 100% of the accreted value beginning January 15, 2006. At any time prior to January 15, 2004, the issuers may redeem up to 35% of the aggregate principal amount of the 13.5% senior discount notes at a redemption price of 113.5% of the accreted value under certain conditions. Interest is payable in arrears on January 15 and July 15, beginning on July 15, 2006, until maturity. The discount on the 13.5% senior discount notes is being accreted using the effective interest method.

May 2001 Charter Holdings Notes. The May 2001 Charter Holdings notes were issued under six separate indentures, each among Charter Holdings and Charter Capital, as the issuers, and BNY Midwest Trust Company, as trustee.

The May 2001 Charter Holdings notes are general unsecured obligations of Charter Holdings and Charter Capital. The May 2001 9.625% Charter Holdings notes issued in the aggregate principal amount of $350.0 million mature on November 15, 2009. The May 2001 10.000% Charter Holdings notes issued in the aggregate principal amount of $575.0 million mature on May 15, 2011. The May 2011 11.750% Charter Holdings notes issued in the aggregate principal amount at maturity of $1.018 billion mature on May 15, 2011. Cash interest on the May 2001 11.750% Charter Holdings notes will not accrue prior to May 15, 2006.

The May 2001 Charter Holdings notes are senior debts of Charter Holdings and Charter Capital. They rank equally with the current and future unsecured and unsubordinated debt of Charter Holdings, including the March 1999, January 2000 and January 2001 notes.

Charter Holdings and Charter Capital will not have the right to redeem the May 2001 9.625% Charter Holdings notes prior to their maturity date on November 15, 2009. Before May 15, 2004, Charter Holdings and Charter Capital may redeem up to 35% of the May 2001 10.000% Charter Holdings notes and the May 2001 11.750% Charter Holdings notes, in each case, at a premium with proceeds of certain offerings of equity securities. In addition, on or after May 15, 2006, Charter Holdings and Charter Capital may redeem some or all of the May 2001 10.000% Charter Holdings notes and the May 2001 11.750% Charter Holdings notes at any time, in each case, at a premium. The optional redemption price declines to 100% of the principal amount of the May 2001 Charter Holdings notes redeemed, plus accrued and unpaid interest, if any, for redemption on or after May 15, 2009.

In the event of a specified change of control event, Charter Holdings and Charter Capital must offer to repurchase any then outstanding May 2001 Charter Holdings notes at 101% of their aggregate principal amount or accreted value, as applicable, plus accrued and unpaid interest, if any.

The indentures governing the May 2001 Charter Holdings notes contain substantially identical events of default, affirmative covenants and negative covenants as those contained in the indentures governing the Charter Holdings March 1999, January 2000 and January 2001 notes.

May 2001 Charter Convertible Notes. In May 2001, Charter sold 4.75% convertible senior notes due 2006 with an aggregate principal amount of $632.5 million. The net proceeds were used to repay certain amounts outstanding under the revolving portions of the credit facilities of our subsidiaries and for general corporate purposes, including capital expenditures.

Common Stock Issuance. In May 2001, Charter sold 60,247,350 shares of common stock for net cash proceeds totaling $1.2 billion. The proceeds were used to repay certain amounts outstanding under the revolving portions of the credit facilities of our subsidiaries and for general corporate purposes, including capital expenditures.

Preferred Stock – Redeemable. On August 31, 2001, in connection with Charter’s acquisition of Cable USA, Inc. and certain cable system assets from affiliates of Cable USA, Inc., Charter issued 505,664 shares of Series A Convertible Redeemable Preferred Stock valued at and with a liquidation preference of $50.6 million.

Holders of the Preferred Stock have no voting rights but are entitled to receive cumulative cash dividends at an annual rate of 5.75% on the Liquidation Preference of each share, payable quarterly. If for any reason Charter fails to pay the dividends on the Preferred Stock on a timely basis, the dividend rate on each share increases to an annual rate of 7.75% until the payment is made. The Preferred Stock is redeemable by Charter at its option on or after August 31, 2004 and must be redeemed by Charter at any time upon a change of control, or if not previously redeemed or converted, on August 31, 2008. The Preferred Stock is convertible, in whole or in part, at the option of the holders from April 1, 2002 through August 31, 2008, into shares of common stock at an initial conversion rate equal to a conversion price of $24.71 per share of common stock, subject to certain customary adjustments. The redemption price per share of Preferred Stock is the Liquidation Preference of $100, subject to certain customary adjustments.

RECENT DEVELOPMENTS

High Speed Access Corp.

On September 28, 2001, Charter Holdco and High Speed Access Corp. (HSA), signed a definitive asset purchase agreement for Charter Holdco to purchase the contracts and associated assets of HSA that serve the Company’s customers for a purchase price of approximately $81.1 million in cash and the assumption of certain liabilities, subject to certain closing adjustments and indemnity reserves. The agreement has been approved by the directors of Charter and HSA, and is expected to close later this year subject to certain closing conditions, including regulatory review and approval by HSA’s shareholders. Charter Holdco, Vulcan and HSA directors, who collectively possess a majority of the voting power of HSA, have agreed to vote their shares in favor of the transaction. The transaction is also subject to approval by a majority of the votes cast by holders of HSA’s common stock, other than Charter Holdco, Vulcan and certain officers and directors of HSA. As of September 30, 2001, the carrying value of Charter’s investment in HSA is zero.

OUTLOOK

During the third quarter of 2001, we have continued to aggressively roll out our advanced services, focusing on our digital cable and cable modem businesses. We expect 2001 revenue growth of 12.5% to 13.5% and operating cash flow growth after corporate overhead expense of 10% to 11%. Basic customer growth is expected to approximate 1% in 2001. Digital customer growth is expected to increase dramatically from 1.07 million customers at December 31, 2000 to more than 2.15 million customers by the end of 2001. Cable modem growth in the third quarter exceeded our targeted range and we believe we will end 2001 with 630,000 data customers. In addition, we expect video-on-demand to be available to approximately 2.2 million homes passed by the end of the year. Our guidance does not include undetermined transitional costs related to the restructuring of our high-speed data network for approximately 20% of our data customers due to the bankruptcy of Excite@Home Corporation. Telephony initiatives will continue to be tested and developed during 2001 with market entry targeted for 2002 or 2003. Furthermore, we will continue our focus on interactive TV, with trials currently in process and expected launches in several markets beginning in 2001. Our advanced technology

team is working on digital video recorder (DVR) capability in advanced digital set-top terminals and wireless home networking. Set-top terminals with built-in DVR functionality should be available to our digital customers in 2002.

NEW ACCOUNTING STANDARDS

CERTAIN TRENDS AND UNCERTAINTIES

The following discussion highlights a number of trends and uncertainties, in addition to those discussed elsewhere in this Quarterly Report, that could materially impact our business, results of operations and financial condition.

Substantial Leverage. As of September 30, 2001, our total debt was approximately $15.7 billion. Although we anticipate we will have sufficient capital to fund our capital expenditures through 2003, we may incur significant additional debt in the future to fund the expansion, maintenance and upgrade of our cable systems. Our ability to make payments on our debt and fund our ongoing operations will depend on our ability to generate cash flow from operations in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our existing credit facilities, new facilities or from other sources of financing at acceptable rates or in an amount sufficient to enable us to repay our debt, to grow our business or to fund our other liquidity and capital needs.

Variable Interest Rates. At September 30, 2001, excluding the effects of hedging, approximately 38.9% of our debt bears interest at variable rates that are linked to short-term interest rates. In addition, a significant portion of our existing debt, assumed debt or debt we might arrange in the future will bear interest at variable rates. If interest rates rise, our costs relative to those obligations will also rise. As of September 30, 2001 and December 31, 2000, the weighted average rate on the bank debt was approximately 6.3% and 8.8%, respectively, while the weighted average rate on the high-yield and convertible debt was approximately 9.5% and 9.5%, respectively, resulting in a blended weighted average rate of 8.2% and 8.6%, respectively. Approximately 80% of our debt was

effectively fixed including the effects of our interest rate hedge agreements as of September 30, 2001 as compared to approximately 60% at December 31, 2000.

Restrictive Covenants. Our credit facilities and the indentures governing our outstanding debt contain a number of significant covenants that, among other things, restrict our ability and the ability of our subsidiaries to:

	•		pay dividends or make other distributions;

	•		make certain investments or acquisitions;

	•		dispose of assets or merge;

	•		incur additional debt;

	•		issue equity;

	•		repurchase or redeem equity interests and debt;

	•		create liens; and

	•		pledge assets.

Furthermore, in accordance with our credit facilities we are required to maintain specified financial ratios and meet financial tests. The ability to comply with these provisions may be affected by events beyond our control. The breach of any of these covenants will result in default under the applicable debt agreement or instrument, which could trigger acceleration of the debt. Any default under our credit facilities or the indentures governing our outstanding debt may adversely affect our growth, our financial condition and our results of operations and the ability to repay amounts due under our publicly held debt.

New Services and Products Growth Strategy. We expect that a substantial portion of any of our future growth will be achieved through revenues from additional services and products. We cannot assure you that we will be able to offer new advanced services and products successfully to our customers or that those new advanced services and products will generate revenues. If we are unable to grow our cash flow sufficiently through our growth strategy, we may be unable to fulfill our obligations or obtain alternative financing. Further, due to declining market conditions and slowing economic trends during recent months, both before and after the terrorist attacks on September 11, 2001, we cannot assure you that we will be able to achieve our planned levels of growth as these events may negatively affect the demand for our additional services and products.

Management of Growth. We have experienced rapid growth that has placed and is expected to continue to place a significant strain on our management, operations and other resources. Our future success will depend in part on our ability to continue to successfully integrate the operations acquired and to attract and retain qualified personnel. The failure to retain or obtain needed personnel or to implement management, operating or financial systems necessary to successfully integrate acquired operations or otherwise manage growth when and as needed could have a material adverse effect on our business, results of operations and financial condition.

Regulation and Legislation. Cable systems are extensively regulated at the federal, state, and local level, including federal rate regulation and municipal approval of grants of franchise agreements and their terms, including requirements to upgrade cable plant equipment.

Cable operators also face significant regulation of their channel capacity. They currently can be required to devote substantial capacity to the carriage of programming that they would not carry voluntarily, including certain local broadcast signals, local public, educational and government access programming, and unaffiliated commercial leased access programming. This carriage burden could increase in the future, particularly if the Federal Communications Commission (FCC) were to require cable systems to carry both the analog and digital versions of local broadcast signals. The FCC is currently conducting a proceeding in which it is considering this channel usage possibility, although it recently issued a tentative decision against such dual carriage.

There is also uncertainty whether local franchising authorities, state regulators, the FCC or the U.S. Congress will impose obligations on cable operators to provide unaffiliated Internet service providers with access to cable plant on non-discriminatory terms. If they were to do so, and the obligations were found to be lawful, it could complicate our operations in general, and our Internet operations in particular, from a technical and marketing standpoint. These access obligations could adversely impact our profitability and discourage system upgrades and the introduction of new products and services. Recently, two federal circuit courts struck down as unlawful open-access requirements imposed by different franchising authorities. In response to the first such ruling, the FCC initiated a proceeding to categorize cable-delivered Internet service and perhaps establish an appropriate regulatory scheme. Company-specific open-access requirements were imposed on Time Warner cable systems in connection with the AOL merger.

Although cable system attachments to public utility poles historically have been regulated at the federal or state level, utility pole owners in many areas are attempting to circumvent or eliminate pole regulation by raising fees and imposing other costs on cable operators and others. In addition, the provision of non-traditional cable services, like the provision of Internet access, may endanger that regulatory protection. The Eleventh Circuit Court of Appeals recently ruled such services left cable attachments ineligible for regulatory protection, and certain utilities already have proposed vastly higher pole attachment rates. The Eleventh Circuit decision is under review by the United States Supreme Court. If the case is upheld and certain of our cable attachments are ineligible for regulatory protection, it could complicate our operations in general, and our Internet operations in particular, from a technical and marketing standpoint. These increased costs could adversely impact our profitability and discourage system upgrades and the introduction of new products and services.

Economic Slowdown; Terrorism; and Armed Conflict. Although we do not believe that the recent terrorist attacks and the subsequent armed conflict and related events have resulted in any material changes to the Company’s business and operations for the period ended September 30, 2001, it is difficult to assess the impact that these events, combined with the general economic slowdown, will have on future operations. These events, combined with the general economic slowdown, could result in reduced spending by customers and advertisers, which could reduce our revenues and operating cash flow. Additionally, an economic slowdown could affect our ability to collect accounts receivable. If we experience reduced operating revenues, it could negatively affect our ability to make expected capital expenditures and could also result in our inability to meet our obligations under our financing agreements. These developments could also have a negative impact on our financing and variable interest rate agreements through disruptions in the market or negative market conditions. Terrorist attacks could interrupt or disrupt our ability to deliver our services (or the services provided to us by programmers) and could cause unforeseen damage to the Company’s physical facilities. Terrorism and the related events may have other adverse effects on the Company, in ways that cannot be presently predicted.

Excite@Home Corporation. On September 28, 2001, Excite@Home Corporation, the provider of high-speed Internet access service to approximately 130,000 Charter data customers, representing approximately 20% of our total data customers, filed for protection under Chapter 11 of the U.S. Bankruptcy Code. While there can be no assurance that further developments in this bankruptcy proceeding will not adversely affect the Company’s ability to provide high-speed Internet access, the Company believes that it will be able to continue to provide such services to existing and new customers through current and future high-speed Internet access vendor relationships. There can be no assurance that future developments will not result in additional costs for the Company, including costs to accelerate rebuild efforts of associated cable plant, costs to negotiate alternative vendor services, and loss of current data customers.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

INTEREST RATE RISK

We use interest rate risk management derivative instruments, such as interest rate swap agreements, interest rate cap agreements and interest rate collar agreements (collectively referred to herein as interest rate agreements) as required under the terms of our credit facilities. Our policy is to manage interest costs using a mix of fixed and variable rate debt. Using interest rate swap agreements, we agree to exchange, at specified intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. Interest rate cap agreements are used to lock in a maximum interest rate should variable rates rise, but enable us to otherwise pay lower market rates. Interest rate collar agreements are used to limit our exposure to and benefits from interest rate fluctuations on variable rate debt to within a certain range of rates.

Effective January 1, 2001, we adopted Statement of Financial Accounting Standard No. 133 “Accounting for Derivative Instruments and Hedging Activities” (SFAS No. 133). Our interest rate agreements are recorded in the consolidated balance sheet at September 30, 2001 as either an asset or liability measured at fair value. In connection with the adoption of SFAS No. 133, we recorded a loss of $23.9 million for the cumulative effect of change in accounting principle as other expense. The effect of adoption was to increase other expense and loss before minority interest, net loss and loss per share by $23.9 million, $9.8 million and $0.04, respectively, for the nine months ended September 30, 2001.

We have certain interest rate derivative instruments which have been designated as cash flow hedging instruments. Such instruments are those which effectively convert variable interest payments on debt instruments into fixed payments. For qualifying hedges, SFAS No. 133 allows derivative gains and losses to offset related results on hedged items in the consolidated statement of operations. We have formally documented, designated and assessed the effectiveness of transactions that receive hedge accounting. For the three and nine month periods ended September 30, 2001, other expense includes $1.5 million and $0.9 million of losses, respectively, which represent cash flow hedge ineffectiveness on interest rate hedge agreements arising from differences between the critical terms of the agreements and the related hedged obligations. Changes in the fair value of interest rate agreements designated as hedging instruments of the variability of cash flows associated with floating-rate debt obligations are reported in accumulated other comprehensive loss. At September 30, 2001, included in accumulated other comprehensive loss was a loss of $41.3 million related to derivative instruments designated as cash flow hedges. The amounts are subsequently reclassified into interest expense as a yield adjustment in the same period in which the related interest on the floating-rate debt obligations affects earnings (losses).

Certain interest rate derivative instruments are not designated as hedges as they do not meet the effectiveness criteria specified by SFAS No. 133. However, we believe such instruments are closely correlated with the respective debt, thus managing associated risk. Interest rate derivative instruments not designated as hedges are marked to fair value with the impact recorded as other income or expense. For the three and nine months ended September 30, 2001, the Company recorded other expense of $70.9 million and $84.2 million for interest rate derivative instruments not designated as hedges.

At September 30, 2001 and December 31, 2000, we had outstanding $2.5 billion and $1.9 billion, $15.0 million and $15.0 million, and $520.0 million and $520.0 million, respectively, in notional amounts of interest rate swaps, caps and collars, respectively. The notional amounts of interest rate instruments do not represent amounts exchanged by the parties and, thus, are not a measure of our exposure to credit loss.

As indicated under “—Financing Activities” in “Management’s Discussion and Analysis”, in January 2001, Charter Holdings and Charter Capital issued $900.0 million 10.75% senior notes due 2009, $500.0 million 11.125% senior notes due 2011 and $350.6 million 13.5% senior discount notes due 2011 with a principal amount at maturity of $675.0 million for net proceeds totaling $1.7 billion. These proceeds were used to repay all remaining amounts outstanding under the Charter Holdings 2000 senior bridge loan facility and the CC VI (Fanch) revolving credit facility and a portion of the amounts outstanding under the Charter Operating and the CC VII (Falcon) revolving credit facilities, and for general corporate purposes. In May 2001, Charter Holdings and Charter Capital issued $350.0 million 9.625% senior notes due 2009, $575.0 million 10.000% senior notes due 2011 and senior discount notes with an aggregate principal amount at maturity of $1.0 billion 11.750% senior discount notes due 2011. The net proceeds were used to pay the cash purchase price of the AT&T transactions, repay certain amounts outstanding under the revolving portions of the credit facilities of our subsidiaries and for general corporate purposes, including capital expenditures. In addition, in May 2001, Charter issued 4.75% convertible senior notes due 2006 for cash proceeds totaling $632.5 million. These proceeds were used for general corporate purposes, including capital expenditures. The fair value of our total fixed-rate debt was $8.6 billion and $5.5 billion at September 30, 2001 and December 31, 2000, respectively. The fair value of fixed-rate debt is based on quoted market prices. The fair

value of variable-rate debt approximated the carrying value of $6.1 billion and $7.3 billion at September 30, 2001 and December 31, 2000, respectively, since this debt bears interest at current market rates.

As of September 30, 2001 and December 31, 2000, long-term debt totaled approximately $15.7 billion and $13.1 billion, respectively. This debt was comprised of approximately $6.1 billion and $7.3 billion of bank debt, $8.2 billion and $5.0 billion of high-yield and $1.4 billion and $750.0 million of convertible debt at September 30, 2001 and December 31, 2000, respectively. As of September 30, 2001 and December 31, 2000, the weighted average rate on the bank debt was approximately 6.3% and 8.8%, respectively, while the weighted average rate on the high-yield and convertible debt was approximately 9.5% and 9.5%, respectively, resulting in a blended weighted average rate of 8.2% and 8.6%, respectively. Approximately 80% of our debt was effectively fixed including the effects of our interest rate hedge agreements as of September 30, 2001 as compared to approximately 60% at December 31, 2000.

PART II. OTHER INFORMATION.

ITEM 1. LEGAL PROCEEDINGS.

We are subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions is not expected to materially affect our consolidated financial position, results of operations or liquidity.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

On August 31, 2001, in connection with Charter’s acquisition of Cable USA, Inc. and certain cable system assets from affiliates of Cable USA, Inc., Charter issued 505,664 shares of Series A Convertible Redeemable Preferred Stock (the Preferred Stock) valued at $50.6 million as merger consideration and asset purchase price consideration, in addition to the cash purchase price of $44.6 million (including certain assumed liabilities) for the acquisition of such assets. Additional shares of Preferred Stock with a value equal to $5.1 million are issuable to certain of the sellers subject to certain holdback provisions. The liquidation preference on the outstanding Preferred Stock totals $50.6 million at September 30, 2001.

Charter did not receive any cash in exchange for the issuance of the Preferred Stock. In issuing the Preferred Stock, Charter relied on the exemption from registration under the Securities Act of 1933 pursuant to Section 4(2), based in part on the representations made to Charter in investment representation letters from each of the stockholders of Cable USA, Inc. receiving Charter common stock in the transaction and each of the sellers receiving Charter common stock as asset purchase consideration and the limited number of stockholders and sellers receiving Charter common stock. Charter had reasonable grounds to believe that the stockholders and sellers were accredited investors, capable of evaluating the merits and risks of the investment and were acquiring the securities for investment purposes.

In connection with the issuance of the Preferred Stock, Charter filed a certificate of designation with the Secretary of State of the State of Delaware to create and designate the rights, preferences and privileges of the Preferred Stock, including liquidation, dividend, conversion and redemption rights. Each share of Preferred Stock has a liquidation preference (Liquidation Preference) of $100 and holders of the Preferred Stock are entitled to receive cumulative cash dividends at an annual rate of 5.75% on the Liquidation Preference of each share, payable quarterly. The Preferred Stock is redeemable by Charter at its option on or after August 31, 2004 and must be redeemed by Charter at any time upon a change of control, or if not previously redeemed or converted, on August 31, 2008. The Preferred Stock is convertible, in whole or in part, at the option of the holders from April 1, 2002 through August 31, 2008, into shares of common stock at an initial conversion rate equal to a conversion price of $24.71 per share of common stock, subject to certain customary adjustments. The redemption price per share of Preferred Stock is the Liquidation Preference of $100, subject to certain customary adjustments. Except as otherwise required by applicable law and with respect to amendments to Charter’s certificate of incorporation for certain matters related to the rights of the holders of the Preferred Stock (which requires a vote of a majority of the holders of the Preferred Stock) holders of the Preferred Stock have no voting rights.

Covenants in the indentures and credit agreements governing the debt obligations of Charter Communications Holdings and its subsidiaries restrict their ability to make distributions to us, and accordingly, limit our ability to declare or pay cash dividends. If for any reason Charter fails to pay the dividends on the Preferred Stock on a timely basis, the dividend rate on each share increases to an annual rate of 7.75% until the payment is made. As part of the acquisition, the Company agreed to use its reasonable best efforts to file a registration statement on Form S-3 covering the shares of common stock underlying the Preferred Stock issued to the sellers within six months of the closing of the acquisition.

The Preferred Stock is senior to Charter’s common stock and prohibits Charter from declaring or paying cash dividends on any class of stock on par with or junior to the Preferred Stock, including the common stock, unless the cumulative dividends on the Preferred Stock and any accrued dividends on stock on par with the Preferred Stock for any past or current period have been paid or set aside in full.

On July 25, 2001, we issued an option to purchase 186,385 shares of Charter common stock to a consultant in consideration of services to be rendered in the future. The option is exercisable immediately, at an exercise price of $20.46 per share and if not exercised prior to the 10th anniversary of the grant date, will expire. The option and the common stock underlying the option were issued without registration in reliance on Section 4(2) of the Securities Act of 1933, based in part on the representations made to

Charter by the consultant. Charter had reasonable grounds to believe that the consultant was an accredited investor, capable of evaluating the merits and risks of the investment and was acquiring the securities for investment purposes. As part of the consultant’s option grant, the consultant received unlimited “piggyback” registration rights and one “demand” registration right with respect to the common stock underlying the option.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) EXHIBITS

2.1(a) First Amendment to Asset Purchase Agreement, dated as of June 30, 2001, among Marcus Cable of Alabama, L.L.C., on the one hand, and TCI of Selma, Inc., TCI of Lee County, Inc., TCI Cablevision of Alabama, Inc., Alabama T.V. Cable, Inc. and TCI Southeast, Inc., on the other hand.

2.1(b) First Amendment to Reorganization Agreement, dated as of June 30, 2001, among Marcus Cable of Alabama, L.L.C., as assignee of Charter Communications, Inc., on the one hand, and TCI TKR of Alabama, Inc. and TCI Southeast, Inc., on the other hand.

2.1(c) First Amendment to Asset Purchase Agreement, dated as of June 30, 2001, among Falcon Cable Systems Company II, L.P., on the one hand, and AT&T Broadband, LLC, Communication Services, Inc., Ohio Cablevision Network, Inc., TCI Cablevision of California, Inc. and TCI Washington Associates, L.P., on the other hand.

2.1(d) First Amendment to Reorganization Agreement, dated as of June 30, 2001, among Falcon Cable Systems Company II, L.P., as assignee of Charter Communications, Inc., on the one hand, and TCI Cablevision of Nevada, Inc. and TCI West, Inc., on the other hand.

2.1(e) First Amendment to Asset Purchase Agreement, dated as of June 30, 2001, among Charter Communications, Inc., Interlink Communications Partners, LLC, Charter Communications, LLC and Falcon Cable Media, on the one hand, and TCI Cable Partners of St. Louis, L.P. and TCI Cablevision of Missouri, Inc., on the other hand.

2.1(f) First Amendment to Asset Purchase Agreement, dated as of June 30, 2001, among Charter Communications Entertainment I, LLC, on the one hand, and St. Louis Tele-Communications, Inc., TCI Cable Partners of St. Louis, L.P., TCI Cablevision of Missouri, Inc., TCI of Illinois, Inc., TCI TKR of Central Florida, Inc. and TCI Holdings, Inc., on the other hand.

2.1(g) First Amendment to Agreement Regarding Closing Matters, dated as of June 30, 2001, among Charter Communications, Inc., on behalf of itself, Marcus Cable of Alabama, L.L.C., Falcon Cable Systems Company II, L.P., Interlink Communications Partners, LLC, Charter Communications, LLC, Falcon Cable Media, and Charter Communications Entertainment I, LLC, on the one hand, and AT&T Broadband, LLC, on behalf of itself, TCI TKR of Alabama, Inc., TCI of Selma, Inc., TCI of Lee County, TCI Cablevision of Alabama, Inc. and Alabama T.V. Cable, Inc., TCI Southeast, Inc., TCI Cablevision of Nevada, Inc., TCI West, Inc., Communications Services, Inc., Ohio Cablevision Network, Inc., TCI Cablevision of California, Inc., TCI Washington Associates, LP., TCI of Illinois, Inc., TCI Cablevision of Missouri, Inc., St. Louis Tele-Communications, Inc., TCI Cable Partners of St. Louis, L.P., TCI TKR of Central Florida, Inc. and TCI Holdings, Inc., on the other hand.

2.2(a) Asset Purchase Agreement, dated as of September 28, 2001, between High Speed Access Corp. and Charter Communications Holding Company, LLC (including as Exhibit A, the Form of Voting Agreement, as Exhibit B, the form of Management Agreement, as Exhibit C, the form of License Agreement, and as Exhibit D, the Form of Billing Letter Agreement) (Incorporated by reference to Amendment No. 6 to Schedule 13D filed by Charter Communications, Inc. and others with respect to High Speed Access Corp., filed on October 1, 2001 (File No. 000-56431)).

2.2(b) Services and Management Agreement, dated as of September 28, 2001, between High Speed Access Corp. and Charter Communications, Inc. (Incorporated by reference to Amendment No. 6 to Schedule 13D filed by Charter Communications, Inc. and others with respect to High Speed Access Corp., filed on October 1, 2001 (File No. 005-56431)).

2.2(c) License Agreement, dated as of September 28, 2001, between High Speed Access Corp., HSA International, Inc. and Charter Communications Holding Company, LLC. (Incorporated by reference to Amendment No. 6 to Schedule 13D filed by Charter Communications, Inc. and others with respect to High Speed Access Corp., filed on October 1, 2001 (File No. 005-56431)).

2.2(d) Stock Purchase Agreement, dated as of September 28, 2001, by and among Vulcan Ventures Incorporated and Charter Communications Holding Company, LLC. (Incorporated by reference to Amendment No. 6 to Schedule 13D filed by Charter Communications, Inc. and others with respect to High Speed Access Corp., filed on October 1, 2001 (File No. 005-56431)).

2.2(e) Voting Agreement, dated as of September 28, 2001, between High Speed Access Corp, Charter Communications Ventures, LLC, Vulcan Ventures Incorporated and certain directors party thereto (Incorporated by reference to Amendment No. 6 to Schedule 13D filed by Charter Communications, Inc. and others with respect to High Speed Access Corp., filed on October 1, 2001 (File No. 005-56431)).

3.1 Certificate of Designation of Series A Convertible Redeemable Preferred Stock of Charter Communications, Inc. and related Certificate of Correction of Certificate of Designation.

3.2 Amended and Restated By-laws of Charter Communications, Inc. as of June 6, 2001.

10.1 Agreement, dated as of September 24, 2001, by and between Jerald Kent and Charter Communications, Inc.

10.2 Employment Agreement, dated as of September 28, 2001, by and between Kent D. Kalkwarf and Charter Communications, Inc.

10.3 Employment Agreement, dated as of September 28, 2001, by and between David G. Barford and Charter Communications, Inc.

10.4 Employment Agreement, dated as of October 8, 2001, by and between Carl E. Vogel and Charter Communications, Inc.

10.5 Employment Agreement, dated as of October 18 2001, by and between Stephen E. Silva and Charter Communications, Inc.

10.6 Employment Agreement, dated as of October 30, 2001, by and between David L. McCall and Charter Communications, Inc.

10.7 Employment Agreement, dated as of October 30, 2001, by and between James H. Smith, III and Charter Communications, Inc.

10.8 Credit Agreement, dated as of June 30, 1998, as Amended and Restated as of November 12, 1999, as further Amended and Restated as of September 26, 2001, among Falcon Cable Communications, LLC, certain guarantors, and several financial institutions or entities named therein.

10.9 Amended and Restated Limited Liability Company Agreement for Charter Communications Holding Company, LLC made as of August 31, 2001.

10.10 Amendment to the Charter Communications, Inc. 2001 Stock Incentive Plan.

(b) REPORTS ON FORM 8-K

On September 12, 2001, the Registrant filed a current report on Form 8-K to announce its expectations for accelerated growth in digital and high-speed data services during third quarter 2001.

On September 24, 2001, the Registrant filed a current report on Form 8-K to announce the resignation of Jerry Kent, President and Chief Executive Officer.

On October 2, 2001, the Registrant filed a current report on Form 8-K to announce the execution of long-term employment agreements for Kent D. Kalkwarf, Executive Vice President and Chief Financial Officer; and David G. Barford, Executive Vice President and Chief Operating Officer and to announce the execution of a definitive agreement to purchase substantially all of the assets used by High Speed Access Corp. to serve the Company’s high-speed data customers.

On October 11, 2001, the Registrant filed a current report on Form 8-K to announce the Board of Directors’ selection of Carl Vogel as the new President and Chief Executive Officer and as a member of the Company’s Board of Directors and its Executive Committee.

On November 1, 2001, the Registrant filed a current report for Form 8-K to announce 2001 third quarter financial results.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Charter Communications, Inc. has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.


		CHARTER COMMUNICATIONS, INC., Registrant









Dated: November 14, 2001		By: /s/ Kent D. Kalkwarf

		Name: Kent D. Kalkwarf Title: Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-2.1(a): 1ST AMEND. TO ASSET PURCHASE AGR.

Exhibit 2.1(a)
Conformed Copy

FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT

This First Amendment to Asset Purchase Agreement (this “Amendment”) is made and entered into as of this 30th day of June, 2001, between Marcus Cable of Alabama, L.L.C. (“MCAL”), on the one hand, and TCI of Selma, Inc. (“TCI Selma”), TCI of Lee County, Inc. (“TCI Lee County”), TCI Cablevision of Alabama, Inc. (“TCIC-AL”), Alabama T.V. Cable, Inc. (“AL-TV”) and TCI Southeast, Inc. (“TCI Parent”), on the other.

Recitals

A. MCAL, TCI Selma, TCI Lee County, TCIC-AL, AL-TV and TCI Parent entered into an Asset Purchase Agreement (“Agreement”) as of the 26th day of February, 2001.

B. The parties to this Amendment wish to amend the Agreement, as more fully set forth herein.

Agreements

In consideration of the above recitals and the mutual agreements stated in this Amendment, the parties agree as follows:

1. Defined Terms. Capitalized terms used herein, but not otherwise modified or defined herein, shall have the meanings ascribed to such terms in the Agreement.

2. Vehicle Title Certificates. Seller shall obtain and deliver to Buyer promptly after closing the vehicle title certificates and, if required, bills of sale, for the following vehicles described in Exhibit A attached to this Amendment. In addition, Seller will execute and deliver to Buyer, for no additional consideration and at no additional cost to Buyer, such certificates, bills of sale, or other documents as may be reasonably necessary to give full effect to transfer of vehicles required by the Agreement.

3. Copyright Filings. Seller hereby agrees to file, at its expense, all Copyright Statements of Account with respect to the Systems for the 2001/1 filing period as and when due under applicable law.

4. Schedules. Schedules 1.18, 1.33, 4.5, 4.6, 4.7 and 6.2 to the Agreement are hereby amended and restated in their entirety, as of February 26, 2001 (except for changes made since such date in compliance with the Agreement), and as of the Closing, as set forth in Exhibit B attached to this Amendment.

5. Waiver of Conditions. Buyer hereby waives the condition to its obligation to consummate the transactions contemplated by the Agreement set forth in Section 7.2.8 of the Agreement.

6. Relationship to the Agreement. This Amendment supersedes any inconsistent provisions contained in the Agreement. Except as amended hereby, the Agreement remains in full force and effect.

7. Choice of Law. This Amendment and the rights of the parties under it will be governed by and construed in all respects in accordance with the laws of the state of Delaware, without regard to the conflicts of laws rules of Delaware.

8. Counterparts. This Amendment may be executed in counterparts, each of which will be deemed an original. This Amendment will become binding when one or more counterparts, individually or taken together, bear the signatures of all parties to this Amendment. Delivery of an executed signature page of this Amendment by facsimile transmission will constitute effective and binding execution and delivery of this Amendment.

[Signature Page Follows]

Exhibit 2.1(a)
Conformed Copy

The parties have executed this Amendment as of the day and year first above written.


		MARCUS CABLE OF ALABAMA, L.L.C.









		By:		/s/ Marcy Lifton




		Name: Title:		Marcy Lifton Vice President









		TCI OF SELMA, INC.









		TCI OF LEE COUNTY, INC.









		TCI CABLEVISION OF ALABAMA, INC.









		ALABAMA T.V. CABLE, INC.









		TCI SOUTHEAST, INC.









		Each by:		/s/ Alfredo Di Blasio




		Name: Title:		Alfred Di Blasio Vice President

Exhibit A

Vehicle Certificates of Title

1GKDM19W4XB526752
1GTDM19W0SB536568

Exhibit B

Amended Schedules 1.18, 1.33, 4.5, 4.6, 4.7 and 6.2

Attached

EX-2.1(b): 1ST AMEND. REORGANIZATION AGREEMENT

Exhibit 2.1(b)
Conformed Copy

FIRST AMENDMENT TO REORGANIZATION AGREEMENT

This First Amendment to Reorganization Agreement (this “Amendment”) is made and entered into as of this 30th day of June, 2001, between Charter Communications, Inc. (“CCI”) and Marcus Cable of Alabama, L.L.C. (“MCAL”), on the one hand, and TCI TKR of Alabama, Inc. (“TCI TKR-AL”) and TCI Southeast, Inc. (“TCI Cable Parent”), on the other.

Recitals

A. CCI, TCI TKR-AL and TCI Parent entered into a Reorganization Agreement (“Agreement”) as of the 26th day of February, 2001.

B. The Reorganization Agreement was deemed amended in accordance with the terms of that Agreement Regarding Closing Matters dated as of the same date among CCI, and certain of its affiliates, and AT&T Broadband, LLC, and certain of its affiliates, which amendments were described in that letter dated May 30, 2001, among CCI, TCI TKR-AL, TCI Cable Parent and certain of their respective affiliates.

C. CCI has assigned all of its rights and obligations under the Reorganization Agreement to MCAL.

D. The parties to this Amendment wish to amend the Agreement, as more fully set forth herein.

Agreements

In consideration of the above recitals and the mutual agreements stated in this Amendment, the parties agree as follows:

1. Defined Terms. Capitalized terms used herein, but not otherwise modified or defined herein, shall have the meanings ascribed to such terms in the Agreement.

2. Parties to the Agreement. MCAL shall be a party to the Agreement and shall have all of the rights and obligations of “Buyer” thereunder.

3. Vehicle Title Certificates. Seller shall obtain and deliver to Buyer promptly after closing the vehicle title certificates and, if required, bills of sale, for the following vehicles described in Exhibit A attached to this Amendment. In addition, Seller will execute and deliver to Buyer, for no additional consideration and at no additional cost to Buyer, such certificates, bills of sale, or other documents as may be reasonably necessary to give full effect to transfer of vehicles required by the Agreement.

4. Copyright Filings. Seller hereby agrees to file, at its expense, all Copyright Statements of Account with respect to the Systems for the 2001/1 filing period as and when due under applicable law.

5. Schedules. Schedules 1.21, 1.38, 4.5, 4.6, 4.7 and 6.2 to the Agreement are hereby amended and restated in their entirety, as of February 26, 2001 (except for changes

made since such date in compliance with the Agreement), and as of the Closing, as set forth in Exhibit B attached to this Amendment.

6. Waiver of Conditions. Buyer hereby waives the condition to its obligation to consummate the transactions contemplated by the Agreement set forth in Section 7.2.8 of the Agreement.

7. Relationship to the Agreement. This Amendment supersedes any inconsistent provisions contained in the Agreement. Except as amended hereby, the Agreement remains in full force and effect.

8. Opinions; Exhibits. The parties shall amend the Exhibits to the Agreement as appropriate to reflect this Amendment.

9. Choice of Law. This Amendment and the rights of the parties under it will be governed by and construed in all respects in accordance with the laws of the state of Delaware, without regard to the conflicts of laws rules of Delaware.

10. Counterparts. This Amendment may be executed in counterparts, each of which will be deemed an original. This Amendment will become binding when one or more counterparts, individually or taken together, bear the signatures of all parties to this Amendment. Delivery of an executed signature page of this Amendment by facsimile transmission will constitute effective and binding execution and delivery of this Amendment.

[Signature Page Follows]

-2-

Exhibit 2.1(b)
Conformed Copy

The parties have executed this Amendment as of the day and year first above written.


		CHARTER COMMUNICATIONS, INC.









		MARCUS CABLE OF ALABAMA, L.L.C.









		Each By:		/s/ Marcy Lifton




		Name: Title:		Marcy Lifton Vice President









		TCI TKR OF ALABAMA, INC.









		TCI SOUTHEAST, INC.









		Each by:		/s/ Alfredo Di Blasio




		Name: Title:		Alfredo Di Blasio Vice President

Exhibit A

Vehicle Certificates of Title

1GTEC14M7TZ508756
1G3AJ55M1T6361944
1GTEC19R3TE542821
1GTEC14W9TZ524295
1GTEC14W5TZ523905
1GTEC14W2TZ524820
1GTEC14WXTZ524290
1FDXF4656XEC47495
1FDXF46S8XED19152
1FDXF46SXXED19153
1FTRF17W7XKA89134
1FTZF1722XKC16448
1FTZF1727XKC16476
1FTZF1727XKC16509
1FTRF17W9XKC16675
1FTZF1727XKC18471
1FTRF17W8XKC16702
1FTRF17W5XKC16639
1FTRF17W0XKC14183
1FTRF17L4XKB23214
1FTRF17L2XKB23230
1GDKC34J0YF482543
3FDXF46S8YMA22507

Exhibit B

Amended Schedules 1.21, 1.38, 4.5, 4.6, 4.7 and 6.2

Attached

EX-2.1(c): 1ST AMEND. TO ASSET PURCHASE AGR.

Exhibit 2.1(c)
Conformed Copy

FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT

This First Amendment to Asset Purchase Agreement (this “Amendment”) is made and entered into as of this 30th day of June, 2001, between Falcon Cable Systems Company II, L.P. (“Falcon”), on the one hand, and AT&T Broadband, LLC (“AT&T Broadband”), Communication Services, Inc. (“CSI”), Ohio Cablevision Network, Inc. (“OCNI”), TCI Cablevision Of California, Inc. (“TCIC-CA”) and TCI Washington Associates, L.P. (“TCI-WA”), on the other.

Recitals

A. Falcon, AT&T Broadband, CSI, OCNI, TCIC-CA and TCI-WA entered into an Asset Purchase Agreement (“Agreement”) as of the 26th day of February, 2001.

B. The parties to this Amendment wish to amend the Agreement, as more fully set forth herein.

Agreements

In consideration of the above recitals and the mutual agreements stated in this Amendment, the parties agree as follows:

1. Defined Terms. Capitalized terms used herein, but not otherwise modified or defined herein, shall have the meanings ascribed to such terms in the Agreement.

2. Vehicle Title Certificates. Seller shall obtain and deliver to Buyer promptly after closing the vehicle title certificates and, if required, bills of sale, for the following vehicles described in Exhibit A attached to this Amendment. In addition, Seller will execute and deliver to Buyer, for no additional consideration and at no additional cost to Buyer, such certificates, bills of sale, or other documents as may be reasonably necessary to give full effect to transfer of vehicles required by the Agreement.

3. Copyright Filings. Seller hereby agrees to file, at its expense, all Copyright Statements of Account with respect to the Systems for the 2001/1 filing period as and when due under applicable law.

4. Forest Service Property. With respect to the Real Property which is the subject of the following permit and lease, Seller represents and warrants that Seller has the valid and enforceable right to use and occupy the Real Property, and all improvements thereon owned by Seller and included in the Assets, in each case free and clear of all Encumbrances except Permitted Encumbrances:


	a) United States Forest Service Special Use Permit granted to TCI Cablevision of California, Inc., dated July 10, 1995 (Bald Mountain Tower Site, Sec 12, T12N, R11E, MDBM); and


	b) Commercial Use Lease dated February 23, 1998 between the United States Forest Service and TCI Cablevision of California, Inc., dated February 23, 1998 (Ward Peak Tower Site Lease, Placer County, California, SEC 18, T15N, R16E, MDM).


	With respect to the foregoing interests in Real Property, Seller is not in breach or default of any terms or conditions of any written instrument relating thereto and, to Seller’s Knowledge, no other party thereto is in material breach or default of any terms or conditions of any such written instrument.

5. Schedules. Schedules 4.3, 4.5, 4.6, 4.7 and 4.9 to the Agreement are hereby amended and restated in their entirety, as of February 26, 2001 (except for changes made since such date in compliance with the Agreement), and as of the Closing, as set forth in Exhibit B attached to this Amendment.

6. Waiver of Conditions. Buyer hereby waives the condition to its obligation to consummate the transactions contemplated by the Agreement set forth in Section 7.2.8 of the Agreement.

7. Relationship to the Agreement. This Amendment supersedes any inconsistent provisions contained in the Agreement. Except as amended hereby, the Agreement remains in full force and effect.

8. Choice of Law. This Amendment and the rights of the parties under it will be governed by and construed in all respects in accordance with the laws of the state of Delaware, without regard to the conflicts of laws rules of Delaware.

9. Counterparts. This Amendment may be executed in counterparts, each of which will be deemed an original. This Amendment will become binding when one or more counterparts, individually or taken together, bear the signatures of all parties to this Amendment. Delivery of an executed signature page of this Amendment by facsimile transmission will constitute effective and binding execution and delivery of this Amendment.

[Signature Page Follows]

-2-

Exhibit 2.1(c)
Conformed Copy

The parties have executed this Amendment as of the day and year first above written.


		FALCON CABLE SYSTEMS COMPANY II, L.P.









		By:		Charter Communications CC VII, LLC., as General Partner









		By:		/s/ Marcy Lifton




		Name: Title:		Marcy Lifton Vice President









		AT&T BROADBAND, LLC









		COMMUNICATION SERVICES, INC.









		OHIO CABLEVISION NETWORK, INC.









		TCI CABLEVISION OF CALIFORNIA, INC.









		TCI WASHINGTON ASSOCIATES, L.P.









		Each by:		/s/ Alfredo Di Blasio




		Name: Title:		Alfredo Di Blasio Vice President

Exhibit A

Vehicle Certificates of Title

Nevada
1GTEC14H5PZ517416
1GTEC14H2RZ546150
1FACP52U8LG151515
1GTEK14K7SZ547413
1FDKF38G5KKB20034
1GTDM19WXXB531028
1GTEC14W0YE183870
1GTEK14W7YE182332

California
1GTEK14W6WZ545094
1FTRF18W1XKC07919
1FTRF18W6YKA22704
1GTEK14W8YE262741
1GTEK14W1YE263360
1GTEK14W7YE261936
1GDJK34JXYF478515

Exhibit B

Amended Schedules 4.3, 4.5, 4.6, 4.7 and 4.9

Attached

EX-2.1(d): 1ST AMEND. REORGANIZATION AGREEMENT

Exhibit 2.1(d)
Conformed Copy

FIRST AMENDMENT TO REORGANIZATION AGREEMENT

This First Amendment to Reorganization Agreement (this “Amendment”) is made and entered into as of this 30th day of June, 2001, between Charter Communications, Inc. (“CCI”) and Falcon Cable Systems Company II, L.P. (“Falcon”), on the one hand, and TCI Cablevision Of Nevada, Inc. (“TCIC-NV”) and TCI West, Inc. (“TCI Cable Parent”), on the other.

Recitals

A. CCI, TCIC-NV and TCI Parent entered into a Reorganization Agreement (“Agreement”) as of the 26th day of February, 2001.

B. The Reorganization Agreement was deemed amended in accordance with the terms of that Agreement Regarding Closing Matters dated as of the same date among CCI, and certain of its affiliates, and AT&T Broadband, LLC, and certain of its affiliates, which amendments were described in that letter dated May 30, 2001, among CCI, TCIC-NV, TCI Cable Parent and certain of their respective affiliates.

C. CCI has assigned all of its rights and obligations under the Reorganization Agreement to Falcon.

D. The parties to this Amendment wish to amend the Agreement, as more fully set forth herein.

Agreements

In consideration of the above recitals and the mutual agreements stated in this Amendment, the parties agree as follows:

1. Defined Terms. Capitalized terms used herein, but not otherwise modified or defined herein, shall have the meanings ascribed to such terms in the Agreement.

2. Parties to the Agreement. Falcon shall be a party to the Agreement and shall have all of the rights and obligations of “Buyer” thereunder.

4. Copyright Filings. Seller hereby agrees to file, at its expense, all Copyright Statements of Account with respect to the Systems for the 2001/1 filing period as and when due under applicable law.

5. Forest Service Property. With respect to the Real Property which is the subject of the following rights of way and permit, Seller represents and warrants that Seller has the valid and enforceable right to use and occupy the Real Property, and all

improvements thereon owned by Seller and included in the Assets, in each case free and clear of all Encumbrances except Permitted Encumbrances:


	a) United States Forest Service, as successor to Bureau of Land Management Decision dated June 1, 1979, Granting Right of Way to TCI of Reno, as successor to Teleprompter of Reno (tower site, No. of Grant: N-20462);


	b) United States Forest Service Special Use Permit granted to TCI Cablevision of Nevada, Inc., dated March 29, 1991 (Slide Mountain Tower Site, Sec 30, T17N, R19E, MDBM, Washoe County, NV);


	c) United States Forest Service, as successor to Bureau of Land Management Decision dated August 29, 1979, Granting Right of Way to TCI of Reno, as successor to Teleprompter of Reno (No. of Grant: N-24529); and


	d) United States Forest Service, as successor to Bureau of Land Management Decision dated September 17, 1979, Granting Right of Way to TCI of Reno, as successor to Teleprompter of Reno (tower site, No. of Grant: N-20471).

With respect to the foregoing interests in Real Property, Seller is not in breach or default of any terms or conditions of any written instrument relating thereto and, to Seller’s Knowledge, no other party thereto is in material breach or default of any terms or conditions of any such written instrument.

6. Schedules. Schedules 1.21, 1.38, 4.3, 4.5, 4.6, 4.7 and 4.9 to the Agreement are hereby amended and restated in their entirety, as of February 26, 2001 (except for changes made since such date in compliance with the Agreement), and as of the Closing, as set forth in Exhibit B attached to this Amendment.

7. Waiver of Conditions. Buyer hereby waives the condition to its obligation to consummate the transactions contemplated by the Agreement set forth in Section 7.2.8 of the Agreement.

8. Relationship to the Agreement. This Amendment supersedes any inconsistent provisions contained in the Agreement. Except as amended hereby, the Agreement remains in full force and effect.

9. Opinions; Exhibits. The parties shall amend the Exhibits to the Agreement as appropriate to reflect this Amendment.

10. Choice of Law. This Amendment and the rights of the parties under it will be governed by and construed in all respects in accordance with the laws of the state of Delaware, without regard to the conflicts of laws rules of Delaware.

11. Counterparts. This Amendment may be executed in counterparts, each of which will be deemed an original. This Amendment will become binding when one or more counterparts, individually or taken together, bear the signatures of all parties to this Amendment. Delivery of an executed signature page of this Amendment by facsimile transmission will constitute effective and binding execution and delivery of this Amendment.

[Signature Page Follows]

Exhibit 2.1(d)
Conformed Copy

The parties have executed this Amendment as of the day and year first above written.


		CHARTER COMMUNICATIONS, INC.









		FALCON CABLE SYSTEMS COMPANY II, L.P.









		By:		Charter Communications CC VII, LLC, as General Partner









		Each By:		/s/ Marcy Lifton




		Name: Title:		Marcy Lifton Vice President









		TCI CABLEVISION OF NEVADA, INC.









		TCI WEST, INC.









		Each by:		/s/ Alfredo Di Blasio




		Name: Title:		Alfredo Di Blasio Vice President

Exhibit A

Vehicle Certificates of Title

None

Exhibit B

Amended Schedules 1.21, 1.38, 4.3, 4.5, 4.6, 4.7 and 4.9

Attached

EX-2.1(e): 1ST AMEND. TO ASSET PURCHASE AGR.

Exhibit 2.1(e)
Conformed Copy

FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT

This First Amendment to Asset Purchase Agreement (this “Amendment”) is made and entered into as of this 30th day of June, 2001, between Charter Communications, Inc., a Delaware corporation (“Charter Parent”), Interlink Communications Partners, LLC, a Delaware limited liability company (“Interlink”), Charter Communications, LLC, a Delaware limited liability company (“Charter LLC”) and Falcon Cable Media, a California Limited Partnership (“FCM”), on the one hand, and TCI Cable Partners of St. Louis, L.P. a Colorado limited partnership (“TCI St. Louis”) and TCI Cablevision of Missouri, Inc. a Missouri corporation (“TCI Missouri”), on the other.

Recitals

A. Charter Parent, Interlink, Charter LLC, FCM, TCI St. Louis and TCI Missouri entered into an Asset Purchase Agreement (“Agreement”) as of the 26th day of February, 2001.

B. Pursuant to the Agreement, Interlink, Charter LLC and FCM had proposed to sell to TCI St. Louis and TCI Missouri certain cable systems located in Miami Beach, Florida, South Miami, Florida and Sebastian, Florida.

C. The parties to this Amendment wish to amend the Agreement, as more fully set forth herein, to provide, among other things, that the Miami Beach and South Miami systems shall not be transferred pursuant to the Agreement and that the only systems to be transferred pursuant to the Agreement shall be the Sebastian systems.

Agreements

In consideration of the above recitals and the mutual agreements stated in this Amendment, the parties agree as follows:

	1.		Defined Terms. Capitalized terms used herein, but not otherwise modified or defined herein, shall have the meanings ascribed to such terms in the Agreement.

	2.		Parties to the Agreement. The Agreement is hereby amended to provide that the sole parties to the Agreement shall be Charter Parent, FCM and TCI Missouri. Charter LLC, Interlink and TCI St. Louis are hereby released from all representations, warranties, covenants, liabilities and obligations pursuant to the Agreement. The term “Seller” in the Agreement shall mean only FCM. The term “Buyer” in the Agreement shall mean only TCI Missouri.

	3.		Schedules. The Schedules to the Agreement are hereby amended and restated in their entirety as set forth in the Schedules attached to this Amendment.

	4.		Purchase Price. The “Purchase Price” in Section 3.1 of the Agreement shall be “$27,042,000” (rather than “$249,000,000”).

First Amendment To Florida
Asset Purchase Agreement

Section 3.2.6. Section 3.2.6 of the Agreement is hereby amended and restated in its entirety to read as follows:

“3.2.6. The Purchase Price will be decreased by the dollar amount equal to the product of (i) the Subscriber Shortfall multiplied by (ii) $3,000. For purposes of this Agreement, the “Subscriber Shortfall” equals the number, if any, by which the aggregate of the Equivalent Basic Subscribers for the Systems, as of the Closing Time is less than 8,924.”

Section 3.3.1. Section 3.3.1 of the Agreement is hereby amended and restated in its entirety to read as follows:

“3.3.1. Not later than a date Seller reasonably believes is at least five Business Days prior to the Closing, Seller will deliver to Buyer a report (the “Preliminary Adjustments Report”), showing in detail the good faith preliminary determination of the adjustments referred to in Section 3.2, which have been calculated as of the Closing Time (or as of any other date and time agreed by the parties) and appropriate documents substantiating the adjustments proposed in the Preliminary Adjustments Report. Buyer will have three Business Days following receipt of the Preliminary Adjustments Report to review such Report and supporting information and to notify Seller of any disagreements of Buyer with Seller’s estimates. If Buyer provides a notice of disagreement (the “Disagreement Notice”) with Seller’s estimates of the adjustments referred to in Section 3.2 within such three Business Day period, Buyer and Seller will negotiate in good faith to resolve any such dispute and to reach an agreement prior to the Closing Date on such estimated adjustments as of the Closing Time. The basis for determining the Purchase Price to be paid at the Closing will be (a) the estimate so agreed upon by Buyer and Seller, (b) if the parties do not reach such an agreement on the estimated amount of the adjustments set forth in the Preliminary Adjustments Report prior to the Closing Date or if Buyer fails to provide a notice of disagreement with Seller’s estimates of such adjustments within the requisite time provided, the estimates of such adjustments set forth in the Preliminary Adjustments Report.”

	7.		HSR Matters. As a result of the amendments to the Agreement contemplated herein, including the reduction of the assets to be transferred and the corresponding reduction of the purchase price, the parties agree that no filing pursuant to the HSR Act is required at this time with respect the transactions contemplated by the Agreement, as amended. The parties agree to withdraw the filings the parties made under the HSR Act on May 8, 2001 (as supplemented on May 11, 2001) with respect to the transactions contemplated by the Agreement prior to this Amendment.

	8.		Section 6.11. The parties agree that there is no need to update the amended and restated Schedules attached to this Amendment and therefore Section 6.11 is hereby deleted from the Agreement.

	9.		Section 7.2.5. The phrase “53,040 (fifty-three thousand and forty) in Section 7.2.5 of the Agreement is hereby deleted and replaced with “7,662 (seven thousand six hundred sixty-two)”:

First Amendment To Florida
Asset Purchase Agreement

-2-

10.

Section 10.5. Section 10.5 of the Agreement is hereby amended and restated in its entirety to read as follows:

“10.5. Limitations on Indemnification — Seller. Seller and Charter Parent will not be liable, in the aggregate, for indemnification arising under Section 10.2(a) for any Losses of or to Buyer or any other person entitled to indemnification from Seller or Charter Parent unless the amount of such Losses for which Seller and Charter Parent would, but for the provisions of this Section 10.5, be liable exceeds, on an aggregate basis, $136,000 (one hundred thirty six thousand) (the “Threshold Amount”) provided that in determining whether the Threshold Amount has been exceeded, there will not be included any Losses arising from any single claim that is less than $10,000. If the Threshold Amount is exceeded, Seller and Charter Parent will be liable, jointly and severally, for the full amount of all Losses (including any single claims for Losses of less than $10,000), which amount will be due and payable within 15 days after the later of (a) the date Seller receives a statement therefor and (b) the date an Action with respect to such Losses is settled or decided in accordance with Section 10.4. Neither Seller nor Charter Parent will be liable for punitive damages assessed for Buyer’s conduct. The maximum aggregate amount that Seller and its Affiliates (including Charter Parent) will be required to pay for indemnification arising under Section 10.2(a) of this Agreement is $2,700,000 (two million, seven hundred thousand dollars). Notwithstanding the preceding, neither the minimum nor maximum limits specified in this Section 10.5 will apply to: (i) the obligation to pay post-Closing adjustments pursuant to Section 3.3; (ii) Seller’s breach of its representations and warranties that it has title to, and the absence of Encumbrances (other than Permitted Encumbrances) on, the Assets owned by Seller; or (iii) any indemnification claims pursuant to Section 10.2(b) or 10.2(c), irrespective of whether such claims also constitute claims under Section 10.2(a)).”

11.

Section 10.6. Section 10.6 of the Agreement is hereby amended and restated in its entirety to read as follows:

“10.6. Limitations on Indemnification — Buyer. Buyer will not be liable for indemnification arising under Section 10.3(a) for any Losses of or to Seller or any other person entitled to indemnification from Buyer unless the amount of such Losses for which Buyer would, but for the provisions of this Section 10.6, be liable exceeds, on an aggregate basis, the Threshold Amount, provided that in determining whether the Threshold Amount has been exceeded, there will not be included any Losses arising from any single claim that is less than $10,000 in the aggregate. If the Threshold Amount is exceeded, Seller will be liable for the full amount of all Losses (including any single claims for Losses of less than $10,000), which amount will be due and payable within 15 days after the later of (a) the date Buyer receives a statement therefor and (b) the date an Action with respect to such Losses is settled or decided in accordance with section 10.4. Buyer will not be liable for punitive damages assessed for Seller’s conduct. The maximum aggregate amount that Buyer and its Affiliates will be required to pay for

First Amendment To Florida
Asset Purchase Agreement

-3-

indemnification arising under Section 10.3(a) of this Agreement in respect of all claims by all indemnified parties is $2,700,000 (two million, seven hundred thousand dollars). Notwithstanding the preceding, neither the minimum nor maximum limits specified in this Section 10.6 will apply to: (i) the obligation to pay the Purchase Price, as adjusted; (ii) the obligation to pay post-Closing adjustments pursuant to Section 3.3; (iii) Buyer’s obligation to assume and perform the Assumed Obligations and Liabilities; or (iv) any indemnification claims pursuant to Section 10.3(b), 10.3(c) or 10.3(d), irrespective of whether such claims also constitute claims under Section 10.3(a)).”

	12.		Vehicle Title Certificates. Seller shall obtain and deliver to Buyer promptly after closing the vehicle title certificates and, if required, bills of sale, for the following vehicles described in Exhibit A attached to this Amendment. In addition, Seller will execute and deliver to Buyer, for no additional consideration and at no additional cost to Buyer, such certificates, bills of sale, or other documents as may be reasonably necessary to give full effect to transfer of vehicles required by the Agreement.

	13.		Copyright Filings. Seller hereby agrees to file, at its expense, all Copyright Statements of Account with respect to the Systems for the 2001/1 filing period as and when due under applicable law.

	14.		Relationship to the Agreement. This Amendment supersedes any inconsistent provisions contained in the Agreement. Except as amended hereby, the Agreement remains in full force and effect.

	15.		Opinions; Exhibits. The parties shall amend the Exhibits to the Agreement as appropriate to reflect this Amendment.

	16.		Choice of Law. This Amendment and the rights of the parties under it will be governed by and construed in all respects in accordance with the laws of the state of Delaware, without regard to the conflicts of laws rules of Delaware.

	17.		Counterparts. This Amendment may be executed in counterparts, each of which will be deemed an original. This Amendment will become binding when one or more counterparts, individually or taken together, bear the signatures of all parties to this Amendment. Delivery of an executed signature page of this Amendment by facsimile transmission will constitute effective and binding execution and delivery of this Amendment.

[Signature Page Follows]

First Amendment To Florida
Asset Purchase Agreement

-4-

Exhibit 2.1(e)
Conformed Copy

The parties have executed this Amendment as of the day and year first above written.







CHARTER COMMUNICATIONS, INC.









By:	/s/ Marcy Lifton

	Name: Marcy Lifton




	Title: Vice President









INTERLINK COMMUNICATIONS PARTNERS, LLC









By:	/s/ Marcy Lifton

	Name: Marcy Lifton




	Title: Vice President









CHARTER COMMUNICATIONS, LLC









By:	/s/ Marcy Lifton

	Name: Marcy Lifton




	Title: Vice President









FALCON CABLE MEDIA, a California limited partnership









	By:	Charter Communications VII, LLC, as general partner









	By:	/s/ Marcy Lifton

		Name: Marcy Lifton




		Title: Vice President

First Amendment To Florida
Asset Purchase Agreement


TCI CABLEVISION OF MISSOURI, INC.









TCI CABLE PARTNERS OF ST. LOUIS, L.P.









	By:	Heritage Cablevision of Massachusetts, Inc.




		Its: General Partner









Each By:		/s/ Alfredo Di Blasio

		Name: Alfredo Di Blasio




		Title: Vice President

First Amendment To Florida
Asset Purchase Agreement

Exhibit A

Vehicle Certificates of Title

1FTCR10U9MUD71814
1FTCR10U7MUD71815
2FTPF17L9YCA02580
2FTPF17L3YCA02686
1GDJR34K2KJ509877

First Amendment To Florida
Asset Purchase Agreement

EX-2.1(f): 1ST AMEND. TO ASSET PURCHASE AGR.

Exhibit 2.1(f)
Conformed Copy

FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT

This First Amendment to Asset Purchase Agreement (this “Amendment”) is made and entered into as of this 30th day of June, 2001, between Charter Communications Entertainment I, LLC (“Charter”), on the one hand, and St. Louis Tele-Communications, Inc., TCI Cable Partners of St. Louis, L.P., TCI Cablevision of Missouri, Inc., TCI of Illinois, Inc., TCI TKR of Central Florida, Inc., and TCI Holdings, Inc. (collectively, the “Parties”), on the other.

Recitals

A. The Parties entered into an Asset Purchase Agreement (“Agreement”) as of the 26th day of February, 2001.

B. The parties to this Amendment wish to amend the Agreement, as more fully set forth herein.

Agreements

In consideration of the above recitals and the mutual agreements stated in this Amendment, the parties agree as follows:

1. Defined Terms. Capitalized terms used herein, but not otherwise modified or defined herein, shall have the meanings ascribed to such terms in the Agreement.

2. Vehicle Title Certificates. Seller shall obtain and deliver to Buyer promptly after closing the vehicle title certificates and, if required, bills of sale, for the following vehicles described in Exhibit A-1 attached to this Amendment. At the time of the transfer by Seller to Buyer of the residential telephony services business pursuant to the Telephony Transfer Agreement, Seller shall obtain and deliver to Buyer the vehicle title certificates for the vehicles described in Exhibit A-2 attached to this Amendment. In addition, Seller will execute and deliver to Buyer, for no additional consideration and at no additional cost to Buyer, such certificates, bills of sale, or other documents as may be reasonably necessary to give full effect to transfer of vehicles required by the Agreement.

3. Copyright Filings. Seller hereby agrees to file, at its expense, all Copyright Statements of Account with respect to the Systems for the 2001/1 filing period as and when due under applicable law.

4. Schedules. Schedules 4.5, 4.6 and 4.7 to the Agreement are hereby amended and restated in their entirety, as of February 26, 2001 (except for changes made since such date in compliance with the Agreement), and as of the Closing, as set forth in Exhibit B attached to this Amendment.

5. Waiver of Conditions. Buyer hereby waives the condition to its obligation to consummate the transactions contemplated by the Agreement set forth in Section 7.2.8 of the Agreement.

6. Relationship to the Agreement. This Amendment supersedes any inconsistent provisions contained in the Agreement. Except as amended hereby, the Agreement remains in full force and effect.

[Signature Page Follows]

Exhibit 2.1(f)
Conformed Copy

The parties have executed this Amendment as of the day and year first above written.







			Charter Communications Entertainment I, LLC, a Delaware limited liability company









			By:	/s/ Marcy Lifton

				Name: Marcy Lifton




				Title: Vice President









			SELLER









			St. Louis Tele-Communications, Inc., a Missouri corporation









			TCI Cable Partners of St. Louis, L.P., a Colorado limited partnership









				By: Heritage Cablevision of Massachusetts, Inc., its general partner









			TCI Cablevision of Missouri, Inc., a Missouri corporation









			TCI of Illinois, Inc., an Illinois corporation









			TCI TKR of Central Florida, Inc., a Florida corporation









			TCI Holdings, Inc., a Delaware corporation









			Each By:	/s/ Alfredo Di Blasio

				Alfredo Di Blasio,




				Authorized Signatory

[Signature Page to FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT]

Exhibit A-1

Vehicle Certificates of Title

1GTEC14H6RE542030
1FDXF46S2YED42637
1FDXF46S7YED42634
1FDXF46S4YED42641
1FDXF46S9YED42635
1GTEC14H0SZ515462
1GTEC14H0XA515162
1GTDM19W4YB517966
1GTDM19W5YB517927
1GTEK14W1YE336260
1GTEK14W2YE339605
1GTEK14W6YE338537
1GKDT13W712118474
1GTEC14H5ME512977
1GTEC14M2TZ516926
1GTEC14W2YE338094
1GDJC34U61F142521
1GCDM15Z6MB150045
1FTFE24YXKHB56610
1B6HL26X7RW114506
1B7HC16X1RS661669
1B7GL26X1SS275521
1B7GL26X4SS278218
1B7GL26X3SS275522
1B7GL26X6SS278219
1FTEF15Y3TLB82336
1FTHE24Y4THB31244
1FTHE24Y2THB31243
1FTHE2424VHB06147
1FTHE2422VHB06146
1FTFE24Y0JHB96645
1FTFE24Y6KHC02921
1FTJE34H8LHA55406

Exhibit 2.1(f)
Conformed Copy

Exhibit A-2

Vehicle Certificates of Title (Telephony Vehicles)

1G2NF52F6YC529011
1GCFG15R4Y1130968
1GTEC14W6YZ132351
1FTRF17LXYKA51842
1FTRF17L0YKA51865
1GCFG15WXY1115901
1GCHG35R3Y1106410
1GTEC14V4XE554891
1GCHG35RXY1103567
1GTGG25WXY1103998
1GCHG35R2Y1104745
1GTGG25W8Y1105720
1GCEG15W3Y1101768
1GTGG25W1Y1103968
1GTGG25W7Y1103912
1GCHG35R7Y1103722
1GTGG25W7Y1104641
1GCHG35R5Y1105534
1GTGG25W2Y1103865
1GTGG25W5Y1105531
1GNDT13W6Y2173690
1GTGG25W7Y1105563
1GTGG25W8Y1106172
1GCFG15W2Y1100972
1GTGG25W9Y1108195
1GTGG25W0Y1106022
1GTGG25W3Y1108130

Exhibit B

Amended Schedules 4.5, 4.6, and 4.7

Attached

EX-2.1(g): 1ST AMEND. AGR. RE. CLOSING MATTERS

Exhibit 2.1(g)
Conformed Copy

First Amendment to
Agreement Regarding Closing Matters

This First Amendment to Agreement Regarding Closing Matters (“Amendment”) is entered into among Charter Communications, Inc., on behalf of the Charter Entities, and AT&T Broadband, LLC, on behalf of the AT&T Entities, as of June 30, 2001.

Recitals

The parties have previously entered into an Agreement Regarding Closing Matters (the “Agreement”) as of February 26, 2001. The parties are entering into this Amendment in order to amend certain provisions of the Agreement.

Agreement

For valuable consideration, the parties agree as follows:

1.		Definitions. Capitalized terms used but not defined in this Amendment will have the meanings ascribed to them in the Agreement.

2.		Amendment of Sections 5 – 11 of Agreement. Sections 5 through 11 of the Agreement are hereby deleted and replaced in their entirety by the following provisions:

		“5. Timing of Transactions.


	(a) The closing under each of the Acquisition Agreements will occur June 30, 2001. Except as provided in Section 6 below, the parties will make all payments required to be made at closing under each Acquisition Agreement to the Escrow Agent described in the Escrow Agreement attached to this Amendment as Exhibit 1.

	(b) The closing of the transactions contemplated by the Florida Agreement (the “Florida Closing”) and the St. Louis Closing will occur simultaneously, on June 30, 2001.

6. Qualified Intermediary.

(a) The parties to the St. Louis Agreement agree that TCI Cable Partners of St. Louis, L.P., a Colorado limited partnership (“TCI-St. Louis”) shall assign (a “Deferred Assignment”) its rights to all of the Assets (as defined in the St. Louis Agreement) located in the Service Areas described in Exhibit 2 to this Amendment (the “Deferred Sale Communities”) and its rights to receive the portion of the St. Louis Purchase Price allocable thereto (the “Deferred Amount”) to a “qualified intermediary” as defined in Treasury Regulations Section 1.1031(k)-1(g)(4) (an “AT&T Qualified Intermediary”) engaged by the AT&T Entities to satisfy the deferred like-


	kind exchange provisions of Section 1031 of the Code (the “Deferred Exchange Provisions”). TCI St. Louis has provided the Charter Entities with a copy of such assignment. This Amendment constitutes written instructions to the Charter Entities that the Deferred Amount should be paid directly to the AT&T Qualified Intermediary described on Exhibit 3 to this Amendment at the time of the closing pursuant to the St. Louis Agreement (“St. Louis Closing”) pursuant to the written wire transfer instructions for such AT&T Qualified Intermediary set forth on Exhibit 3. The foregoing assignment shall not (i) limit or abrogate in any respect the obligations of TCI-St. Louis pursuant to the St. Louis Agreement; (ii) impair the Charter Entities’ rights and remedies under the St. Louis Agreement (including the Charter Entities’ rights to indemnification and to the assurances provided by TCI-St. Louis’ representations and warranties); (iii) increase the Charter Entities’ obligations or liability under the St. Louis Agreement or result in any additional cost, expense or liability to the Charter Entities; (iv) require the Charter Entities to take title to any property other than the Assets (as defined in the St. Louis Agreement). TCI St. Louis hereby agrees to indemnify, defend and hold the Charter Entities harmless, without limitation, from and against any and all Losses (as defined in the St. Louis Agreement) threatened against, suffered or incurred by the Charter Entities by reason of any such cooperation and/or TCI-St. Louis’ attempt at exchange treatment.

	(b) The Charter Entities shall have no liability or obligations to any AT&T Entity or any third-party arising from any amounts wired to an AT&T Qualified Intermediary pursuant to this Section 6, provided that the Charter Entities comply with the written instructions of the AT&T Entities provided pursuant to Section 6(a).

7. Identification of Deferred Assets.

The Charter Entities and the AT&T Entities will negotiate in good faith to (i) reach agreement as to assets (the “Deferred Assets”) with an aggregate value of at least $180 million owned by a Charter Entity or any affiliate(s) thereof (“Charter Seller”) to correspond to the St. Louis Assets sold by TCI St. Louis pursuant to the St. Louis Agreement for purposes of the Deferred Exchange Provisions and (ii) enter into an asset purchase agreement covering such Deferred Assets (the “Deferred Agreement”) within 60 days after the St. Louis Closing (which the parties expect shall be substantially in the form of the Florida Agreement). The parties expect that the Deferred Agreement will provide that the parties thereto will use commercially reasonable efforts to consummate the transactions contemplated by such agreement within 180 days after the St. Louis Closing (provided the Deferred Agreement is executed within 50 days following the St. Louis Closing). If the parties enter into the Deferred Agreement, such Deferred Agreement shall provide that Charter Seller may assign its right pursuant to the Deferred Agreement to receive the purchase price to be paid by TCI-St. Louis pursuant to the Deferred Agreement (the “Deferred

Purchase Price”) to a “qualified intermediary” as defined in Treasury Regulations Section 1.1031(k)-1(g)(4) (a “Charter Qualified Intermediary”) engaged by Charter Seller to satisfy the Deferred Exchange Provisions. If, after negotiations, the parties are unable to reach agreement, in their sole respective discretion, with respect to all aspects of the Deferred Agreement, then the parties shall have no further obligations pursuant to this Section 7. The Charter Entities shall have no liability if the exchange of the Deferred Assets for the assets described in Section 6(a) does not qualify as a tax-deferred exchange under the Deferred Exchange Provisions.

8. St. Louis and Florida Closings.

In connection with the St. Louis Closing and the Florida Closing, (i) the cash consideration that the AT&T Entities are entitled to receive and that Charter Communications Entertainment I, LLC (“CCEI”) is obligated to pay as the purchase price (as preliminarily adjusted as of the St. Louis Closing, the “St. Louis Purchase Price”) for the assets to be transferred under the St. Louis Agreement (the “St. Louis Assets”), will be reduced (such reduction to come from the portion of the St. Louis Purchase Price allocable to TCI Missouri) by the amount of the purchase price (as preliminarily adjusted as of the Florida Closing, the “Florida Purchase Price”) TCI Missouri is obligated to pay for the assets to be transferred under the Florida Agreement (the “Florida Assets”) and TCI Missouri will not be obligated to pay the Florida Purchase Price. All subsequent adjustments with respect to the purchase price for the Florida Assets and the St. Louis Assets shall be paid in cash by the appropriate Charter Entities or AT&T Entities pursuant to the terms of the St. Louis Agreement and the Florida Agreement.

9. Section 1031 Intent and Mechanics with respect to Florida and St. Louis. The exchanges of assets pursuant to Section 8 are intended to qualify, to the extent reasonably possible as a tax free exchange of like-kind assets under Section 1031 of the Code (the “Exchanges”). The AT&T Entities and the Charter Entities agree to use all reasonable efforts to structure the Exchanges in such a way that to the extent reasonably possible it will be a tax free exchange of like-kind assets under Section 1031 of the Code.

(a) Method of Exchange. The Exchanges described in Section 8 are to occur as follows: (i) the AT&T tangible personal property and the Charter tangible personal property are being exchanged each for the other; (ii) AT&T’s Real Property (as defined in the St. Louis Agreement) owned by TCI Missouri and Charter’s Real Property (as defined in the Florida Agreement) are being exchanged each for the other; and (iii) AT&T’s Contracts, Franchises, Licenses and Intangibles (each as defined in the St. Louis Agreement) owned by TCI Missouri and Charter’s Contracts, Franchises, Licenses and Intangibles (each as defined in the Florida Agreement) are being exchanged each for the other. In each case, the assets described in this Section 9(a) shall be exchanged each for the other in


	“Exchange Groups” as defined under Treasury Regulations Sections 1.1031(a)-2 and 1.1031(j)-1, and in each case to the maximum extent permitted by Section 1031 of the Code and the regulations promulgated thereunder. Liabilities assumed or taken subject to by each party are being exchanged each for the other to the maximum extent permitted under Section 1031 of the Code and regulations thereunder.

	(b) Calculation of Gross Values. For the purposes of this Agreement, the gross value of AT&T’s Assets (as defined in the St. Louis Agreement) comprising the Systems (as defined in the St. Louis Agreement) which are being transferred by TCI Missouri is $238,155,604, as adjusted pursuant to the St. Louis Agreement and the gross value of FCM’s Assets (as defined in the Florida Agreement) comprising the Systems (as defined in the Florida Agreement) which are being transferred to TCI Missouri is $27,042,000, as adjusted pursuant to the Florida Agreement.

	(c) Allocation of Value. Following each of the St. Louis Closing and the Florida Closing, the Parties shall use reasonable good faith efforts to agree on the value to be allocated to the tangible personal property and real property included in the Assets pursuant to Treasury Regulations relating to like-kind exchanges of multiple assets under Section 1031 of the Code. In the event the Parties fail, within 90 days after such Closing, to reach agreement on the allocation of value, then the Parties shall hire an appraiser (the “Appraiser”) to prepare with respect to this Agreement, not later than 120 days after such Closing, a written report regarding the value to be allocated to the tangible personal property and real property included in the Assets pursuant to Treasury Regulations relating to like-kind exchanges of multiple assets under Section 1031 of the Code. The fees of the Appraiser will be split equally between the Parties. The Parties agree that for purposes of Sections 1031 and 1060 of the Code and the regulations thereunder, each will report the transactions contemplated by this Agreement in accordance with the values determined by this Section 9(c). Each party promptly will give the other notice of any disallowance or challenge of asset values by the Internal Revenue Service or any state or local tax authority.

		10. [Intentionally omitted]

		11. [Intentionally omitted]”

3.		Miscellaneous. This Amendment supersedes any inconsistent provisions contained in the Agreement. Except as amended hereby, the Agreement remains in full force and effect. This Amendment will be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law. This Amendment may be executed in one or more counterparts, each of which will be deemed an original and all of which will constitute one and the same instrument. This Amendment has been negotiated by the parties hereto and their respective legal counsel, and legal or equitable principles that might require the construction of this Amendment

or any provision of this Amendment against the party drafting this Amendment will not apply in its construction or interpretation.

[Signature Page Follows]

The parties are signing this First Amendment to Agreement Regarding Closing Matters as of the date first written above.


AT&T BROADBAND, LLC




on behalf of the AT&T Entities









		By:	/s/ Alfredo Di Blasio

		Name:	Alfredo Di Blasio




		Title:	Vice President









	CHARTER COMMUNICATIONS, INC.




	on behalf of the Charter Entities









		By:	/s/ Marcy Lifton

		Name:	Marcy Lifton




		Title:	Vice President

Exhibit 1

Escrow Agreement

Exhibit 2

Deferred Sale Communities


System	Headend	Communities Served






ILLINOIS




Belleville, IL	Belleville, IL	City of Bellville




		Caseyville Township




		Fairview Heights




		City of O’Fallon




		O’Fallon Township




		Stookey Township




		Village of Swansea









	Scott AFB	Village of Albers




		Village of Aviston




		Clinton County




		Village of Damiansville




		Village of Freeburg




		Town of Lebanon




		City of Mascoutah




		Village of New Baden




		Scott Air Force Base




		Town of Shiloh




		St. Clair County




		Village of Summerfield




		City of Trenton









MISSOURI




Overland, MO	Lake St. Louis, MO	Village of Dardenne Prairie




		City of Flint Hill




		Town of Lake St. Louis




		City of O’Fallon




		St. Charles County




		Village of St. Paul




		Village of Weldon Spring




		Village of Weldon Spring Heights




		City of Wentzville









	Maryland Heights	City of Chesterfield




	[in Dunwood], MO	City of Creve Coeur




		City of Hazelwood




		St. Louis County




		City of Maryland Heights

EX-3.1: CERTIFICATE OF DESIGNATION

Exhibit 3.1
Conformed Copy

Certificate of Correction

Certificate of Designation

Charter Communications, Inc.
a Delaware corporation

Charter Communications, Inc., a Delaware corporation (the “Company”), pursuant to Section 103(f) of the Delaware General Corporation Law, hereby certifies as follows:

1. The Certificate of Designation of Series A Convertible Redeemable Preferred Stock of Charter Communications, Inc. filed with the Delaware Secretary of State on August 31, 2001, is an inaccurate record of the corporate action referred to therein.

2. Paragraph 1 on page 1 entitled “Designation and Amount” of the Certificate of Designation of Series A Convertible Redeemable Preferred Stock of the Company inaccurately designates such series as “Series A Convertible Preferred Stock.”

3. Paragraph 1 on page 1 entitled “Designation and Amount” of the Certificate of Designation of Series A Convertible Redeemable Preferred Stock of the Company, in correct form, should read in its entirety as follows:


	“1. Designation and Amount. There is hereby designated a series of shares of Preferred Stock consisting of 1,000,000 shares designated “Series A Convertible Redeemable Preferred Stock” (the “Series A Preferred Stock”).”

IN WITNESS WHEREOF, the Company has caused this Certificate of Correction to be signed by its Vice President this 5th day of September, 2001.







		/s/ Marcy Lifton

		Marcy Lifton, Vice President

Exhibit 3.1
Conformed Copy

CERTIFICATE OF DESIGNATION OF
SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK
OF
CHARTER COMMUNICATIONS, INC.

Charter Communications, Inc. (hereinafter called the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify:

1. The name of the Corporation is Charter Communications, Inc.

2. The certificate of incorporation of the Corporation authorizes the issuance of 250,000,000 shares of Preferred Stock, $.001 par value, and expressly vests in the Board of Directors of the Corporation the authority provided therein to provide for the issuance of said shares in series and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations, or restrictions thereof.

3. The Board of Directors of the Corporation, pursuant to the authority expressly vested in it as aforesaid, has adopted the following resolutions creating a “Series A Convertible Redeemable” series of Preferred Stock:

RESOLVED, that one series of the class of authorized Preferred Stock of the Corporation be and hereby is created, and that the designation and amount thereof and the voting powers, preferences and relative participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

SERIES A CONVERTIBLE PREFERRED STOCK

1. Designation and Amount. There is hereby designated a series of shares of Preferred Stock consisting of 1,000,000 shares designated “Series A Convertible Preferred Stock” (the “Series A Preferred Stock”).

2. Dividends.

(a) The holders of shares of Series A Preferred Stock shall be entitled to receive with respect to each share of Series A Preferred Stock, when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends, dividends at a rate per annum equal to Five and Three Quarters Percent (5.75%) of the Liquidation Preference per share, payable in cash, in accordance with the terms of this Section 2, and subject to increase as provided for in Section 2(b), (the “Dividend Rate”). Such dividends shall be cumulative from the first date of issuance of shares of Series A Preferred Stock (the “Issue Date”) regardless of when actually issued, whether or not in any Dividend Period or Dividend Periods (as defined below) there shall be funds of the Corporation legally available for the payment of such dividends, and shall be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (unless such day is not a Business Day, in which event such dividends shall be payable on the next succeeding Business Day) (each such date being a “Dividend Payment Date” and

each such quarterly period being a “Dividend Period”). Each such dividend shall be payable to the holders of record of shares of the Series A Preferred Stock as they appear on the share register of the Corporation on the corresponding Record Date. As used herein, the term “Record Date” means, with respect to the dividend payable on March 31, June 30, September 30 and December 31, respectively of each year, the preceding March 15, June 15, September 15 and December 15, or such other record date, not more than 60 days or less than 10 days preceding the payment dates thereof, as shall be fixed by the Board of Directors. Accrued and unpaid dividends for any past Dividend Periods may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such record date, not more than 45 days preceding the payment date thereof, as may be fixed by the Board of Directors.

(b) If for any reason the Corporation fails to make payment of all then accrued dividends on any Dividend Payment Date, the Dividend Rate with respect to Dividends accruing from and after such Dividend Payment Date shall be increased to Seven and Three Quarters Percent (7.75%) per annum. Such increase in the Dividend Rate shall continue in effect until such time as the Corporation cures such failure to make payment of all accrued dividends, at which time the Dividend Rate with respect to dividends accruing from and after the date of such cure shall be reduced to Five and Three Quarters Percent (5.75%) per annum.

(c) The amount of dividends payable for each full Dividend Period for the Series A Preferred Stock shall be computed by dividing the annual Dividend Rate (as appropriately adjusted as required by Section 2(b) hereto) rate by four. The amount of dividends payable for the initial Dividend Period, or any other period shorter or longer than a full Dividend Period, on the Series A Preferred Stock shall be computed on the basis of twelve 30-day months and a 360-day year. Holders of shares of Series A Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of cumulative dividends, as herein provided, on the Series A Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series A Preferred Stock that may be in arrears; provided that if dividends are not paid in full on any Dividend Payment Date, dividends will cumulate as if the unpaid dividends were payable in cash and the Liquidation Preference had been increased by the amount of unpaid dividends until paid.

(d) Holders of shares of Series A Preferred Stock shall be entitled to share equally (on an as converted basis) in all such dividends declared upon the Series A Preferred Stock.

(e) So long as any shares of the Series A Preferred Stock are outstanding, no dividend, except as described in the next succeeding sentence, shall be declared or paid or set apart for payment on any Parity Stock, nor shall any Parity Stock be redeemed, purchased or otherwise acquired for any consideration. When dividends are not paid in full or consideration sufficient for such payment is not set apart, as aforesaid, all dividends declared upon shares of the Series A Preferred Stock and all dividends declared upon any class of stock ranking on liquidation on a parity with the Series A Preferred Stock (such Preferred Stock ranking on liquidation on parity with the Series A Preferred Stock being referred to as “Parity Stock”) shall be declared ratably in proportion to the respective

amounts of dividends accumulated and unpaid on the Series A Preferred Stock and accumulated and unpaid on such Parity Stock.

(f) So long as any shares of the Series A Preferred Stock are outstanding, no dividends (other than dividends or distributions paid in shares of, or to effectuate a stock split on, or options, warrants or rights to subscribe for or purchase shares of, any other stock ranking on liquidation junior to the Series A Preferred Stock (“Junior Stock”)) shall be declared or paid or set apart for payment or other distribution declared or made upon Junior Stock, nor shall any Junior Stock be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of shares of the Corporation’s Class A Common Stock (“Common Stock”) for purposes of an employee incentive or benefit plan of the Corporation or any subsidiary) (any such dividend, distribution, redemption or purchase being hereinafter referred to as a “Junior Stock Distribution”) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by the Corporation, directly or indirectly (except by conversion into or exchange for Junior Stock), unless in each case the full cumulative dividends on all outstanding shares of the Series A Preferred Stock and accrued and unpaid dividends on any other Parity Stock shall have been paid or set apart for payment for all past Dividend Periods with respect to the Series A Preferred Stock and all past dividend periods with respect to such Parity Stock and sufficient consideration shall have been paid or set apart for the payment of the dividend for the current Dividend Period with respect to the Series A Preferred Stock and the current dividend period with respect to such Parity Securities.

3. Liquidation, Dissolution or Winding Up.

(a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series A Preferred Stock then outstanding, on a pro rata basis with the holders of any Parity Stock then outstanding, shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, after and subject to the payment in full of all amounts required to be distributed to the holders of any Preferred Stock of the Corporation ranking on liquidation prior and in preference to the Series A Preferred Stock (such Preferred Stock that is senior to the Series A Preferred Stock being referred to hereinafter as “Senior Stock”) upon such liquidation, dissolution or winding up, but before any payment shall be made to the holders of Common Stock or other Junior Stock, an amount equal to the sum of (i) $100 per share (the “Liquidation Preference”) (subject to adjustment in the event of any stock dividend, stock split, stock distribution or combination with respect to such shares), and (ii) the amount of all declared but unpaid dividends on the Series A Preferred Stock. If upon any such liquidation, dissolution or winding up of the Corporation, the remaining assets of the Corporation available for the distribution to its stockholders after payment in full of amounts required to be paid or distributed to holders of any other Senior Stock shall be insufficient to pay the holders of shares of Series A Preferred Stock the full amount to which they shall be entitled, the holders of shares of Series A Preferred Stock, and any Parity Stock, shall share ratably in any distribution of the remaining assets and funds of the Corporation in proportion to the respective amounts which would otherwise be payable with respect to the shares held by them upon such distribution if all amounts payable on or with respect to said shares were paid in full. Except as set forth in this clause (a), holders of shares of Series A Preferred

Stock shall not be entitled to any distribution in the event of liquidation, dissolution or winding up of the Corporation.

(b) The merger or consolidation of the Corporation with or into any other corporation or entity, or the sale or conveyance of all or substantially all the assets of the Corporation, shall not be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Section 3.

4. Voting.

(a) General. Except as specifically set forth in the General Corporation Law of the State of Delaware or provided in the balance of this Section 4, the holders of shares of the Series A Preferred Stock shall not be entitled to any voting rights with respect to any matters voted upon by stockholders.

(b) Voting by Class on Certain Matters. So long as any shares of the Series A Preferred Stock are outstanding, the Company shall not amend its Certificate of Incorporation or Bylaws, without the written consent or the affirmative vote at a meeting called for that purpose of the holders of a majority of the votes of the shares of Series A Preferred Stock then outstanding, voting separately as a class, so as to (i) amend, alter or repeal any of the provisions of any resolution or resolutions establishing the Series A Preferred Stock so as to affect adversely the powers, preferences or special rights of such Series A Preferred Stock or (ii) authorize the issuance of, or authorize any obligation or security convertible into or evidencing the right to purchase shares of, any additional class or series of Senior Stock. Without limiting any of the foregoing, the Corporation shall have the right to issue any additional class or series of Parity Stock or Junior Stock without any approval of the shares of Series A Preferred Stock then outstanding.

5. Conversion Rights.

(a) Exercise of Conversion Rights. Each holder of Series A Preferred Stock shall have the right, at its option, at any time beginning with that date which is six (6) months after the Closing (as defined in that certain Agreement and Plan of Merger and Asset Purchase Agreement as of March 14, 2001, by and among Charter Communications, Inc. and Cable USA, Inc. (the “Merger Agreement”)) and ending with that date which is seven (7) years after the Closing, to convert, subject to the terms and provisions of this Section 5, all or any portion of its Series A Preferred Stock then outstanding into such number of fully paid and non-assessable shares of Common Stock as results from dividing (i) the sum of (A) the aggregate Liquidation Preference of all shares of Series A Preferred Stock to be converted plus (B) any declared but unpaid dividends on such shares, by (ii) the applicable Conversion Price (as defined in Section 6 below) on the Conversion Date (as defined below). Such conversion shall be deemed to have been made at the close of business on the date that the certificate or certificates for shares of Series A Preferred Stock shall have been surrendered for conversion in accordance with this Section 5 and written notice shall have been received as provided in Section 5(b) (the “Conversion Date”), so that the person or persons entitled to receive the shares of Common Stock upon conversion of such shares of Series A Preferred Stock shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock at such time and such conversion shall be at the

Conversion Price in effect at such time. Upon conversion of any shares of Series A Preferred Stock pursuant to this Section 5, the rights of the holder of such shares upon the Conversion Date shall be the rights of a holder of Common Stock only, and each such holder shall not have any rights in its former capacity as a holder of shares of Series A Preferred Stock.

(b) Notice to the Corporation. In order to convert all or any portion of its outstanding Series A Preferred Stock into shares of Common Stock, the holder of such Series A Preferred Stock shall deliver the shares of Series A Preferred Stock to be converted to the Corporation at its principal office, together with written notice that it elects to convert those shares of Series A Preferred Stock into shares of Common Stock in accordance with the provisions of this Section 5. Such notice shall specify the number of shares of Series A Preferred Stock to be converted and the name or names in which the holder wishes the certificates for shares of Common Stock to be registered, together with the address or addresses of the person or persons so named, and, if so required by the Corporation, shall be accompanied by a written instrument or instruments of transfer in form reasonably satisfactory to the Corporation, duly executed by the registered holder of the shares of Series A Preferred Stock to be converted or by its attorney duly authorized in writing.

(c) Delivery of Certificate. As promptly as practicable after the surrender as hereinabove provided of shares of Series A Preferred Stock for conversion into shares of Common Stock, the Corporation shall deliver or cause to be delivered to the holder, or the holder’s designees, certificates representing the number of fully paid and non-assessable shares of Common Stock into which the shares of Series A Preferred Stock are entitled to be converted, together with a cash adjustment in respect of any fraction of a share to which the holder shall be entitled as provided in Section 5(d), and, if less than the entire number of shares of Series A Preferred Stock represented by the certificate or certificates surrendered is to be converted, a new certificate for the number of shares of Series A Preferred Stock not so converted. So long as any shares of Series A Preferred Stock remain outstanding, the Corporation shall not close its Common Stock transfer books. The issuance of certificates for shares of Common Stock upon the conversion of shares of Series A Preferred Stock shall be made without charge to the holder for any tax in respect of the issuance of such certificates (other than any transfer, withholding or other tax if the shares of Common Stock are to be registered in a name different from that of the registered holder of Series A Preferred Stock).

(d) Fractional Shares. No fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issued upon any conversion of any shares of Series A Preferred Stock, but, in lieu thereof, there shall be paid an amount in cash equal to the same fraction of the Liquidation Preference.

(e) Reservation of Shares. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of shares of Series A Preferred Stock, the full number of whole shares of Common Stock then deliverable upon the conversion of all shares of Series A Preferred Stock then outstanding. The Corporation shall take at all times such corporate action as shall be necessary in order that the Corporation may validly and legally issue fully

paid and non-assessable shares of Common Stock upon the conversion of shares of Series A Preferred Stock in accordance with the provisions of this Section 5.

(f) Shares Validly Issued and Non-Assessable. All shares of Common Stock that may be issued upon conversion of the Series A Preferred Stock shall upon issuance by the Corporation be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.

(g) Retirement of Shares. Any shares of Series A Preferred Stock converted pursuant to the provisions of this Section 5 shall be retired and given the status of authorized and unissued Preferred Stock, undesignated as to series, subject to reissuance by the Corporation as shares of Preferred Stock of one or more series, as may be determined from time to time by the Board.

(h) Minimum Number of Shares of Series A Preferred Stock to be Converted. Each holder may only surrender shares of Series A Preferred Stock for conversion to Common Stock pursuant to Section 5 if the sum of the aggregate Liquidation Preference of such shares of Series A Preferred Stock to be converted exceeds $1,000,000; provided, however, that, notwithstanding this Section 5(h), if the aggregate Liquidation Preference of all Shares of Series A Preferred Stock held by such holder of Series A Preferred Stock is less than $1,000,000, such holder of Series A Preferred Stock may surrender all, but not less then all, of its shares of Series A Preferred Stock for conversion to Common Stock pursuant to this Section 5.

(i) Automatic Conversion.

(1) Transfer of Shares. In the event that a holder of shares of Series A Preferred Stock desires to transfer some or all of such shares other than to an Affiliate (as defined in the Merger Agreement), each share of Series A Preferred Stock so transferred shall automatically convert into the number of fully paid and non-assessable shares of Common Stock into which such share is then convertible pursuant to Section 6 hereof automatically and without further action, immediately upon the transfer of such shares; provided that the mortgage, pledge or other encumbrance of shares of the Series A Preferred Stock by a holder thereof to one or more banks, insurance companies or other financial institutions (each, a “Lender”) shall not trigger the conversion of such shares until such Lender forecloses on such shares, if ever.

(2) Mechanics of Conversion. Upon the occurrence of the events specified above, the outstanding shares of Series A Preferred Stock shall automatically convert without any further action by the holders of such shares or the Corporation whether the certificates evidencing such shares are surrendered to the Corporation or its transfer agent, and the holders of such converted shares shall surrender the certificates formerly representing such shares at the office of the Corporation or of any transfer agent for Common Stock. Thereupon, there shall be issued and delivered to each such holder, promptly at such office and in his, her or its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock into which such shares of Series A Preferred Stock were so converted and cash as provided in Section 5(d) above in respect of any fraction of a share of Common Stock issuable upon

such conversion. The Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless and until certificates evidencing such shares of Series A Preferred Stock are either delivered to the Corporation or its transfer agent, as hereinafter provided, or the holder thereof notifies the Corporation or such transfer agent that such certificates have been lost, stolen, or destroyed and executes and delivers an agreement to indemnify the Corporation from any loss incurred by it in connection therewith.

6. Conversion Price. As used herein, the “Conversion Price” for the Series A Preferred Stock shall initially be $24.71 per share of Common Stock, subject to adjustment as set forth below. The Conversion Price shall be subject to adjustment from time to time as follows:

(a) Stock Dividends, Subdivisions, Reclassifications or Combinations. If the Corporation shall (i) declare a dividend or make a distribution on its Common Stock in shares of its Common Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares, or (iii) combine or reclassify the outstanding Common Stock into a smaller number of shares, the Conversion Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any shares of Series A Preferred Stock surrendered for conversion after such date shall be entitled to receive the number of shares of Common Stock which such holder would have owned or been entitled to receive had such shares of Series A Preferred Stock been converted immediately prior to such date. Successive adjustments in the Conversion Price shall be made whenever any event specified above shall occur.

(b) Other Distributions. In case the Corporation shall fix a record date for the making of a distribution to all holders of shares of its Common Stock (i) of shares of stock of any class other than its Common Stock, (ii) of evidence of indebtedness of the Corporation or any subsidiary of the Corporation, (iii) of assets, or (iv) of rights or warrants, then in each such event provisions shall be made so that the holders of the Series A Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of (i) shares of such other class than the Company’s stock, (ii) evidence of indebtedness of the Corporation or any subsidiary of the Corporation, (iii) assets, or (iv) rights or warrants, as applicable, that they would have received had their shares of Series A Preferred Stock been converted into Common Stock on the date of such event and had they thereafter, during the period from the date of such event to and including the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this under this Certificate of Designation with respect to the rights of the holders of the Series A Preferred Stock.

(c) Consolidation, Merger, Sale, Lease or Conveyance or Reclassifications or Reorganizations. In case the Corporation shall at any time after the date of issuance of the Series A Preferred Stock consolidate with, or merge with or into, any other corporation or entity or engage in any reorganization, recapitalization, sale of all or substantially all of the Corporation’s assets to any entity or any other transaction which is effected in such a manner that the holders of Common Stock or Series A Preferred Stock

are entitled to receive stock, securities or assets with respect to or in exchange for the Common Stock or Series A Preferred Stock, then each share of Series A Preferred Stock shall after the date of such consolidation, merger, sale, lease or conveyance or such reclassification, reorganization or other change be convertible into the number of shares of stock or other securities or property (including cash) to which the Common Stock issuable (at the time of such consolidation, merger, sale, lease or conveyance or such reclassification, recapitalization or other change) upon conversion of such share of Series A Preferred Stock would have been entitled upon such consolidation, merger, sale, lease or conveyance or such reclassification, recapitalization or other change; and if the applicable event does not constitute a Change in Control, the provisions set forth in this Section 6 with respect to the rights and interests thereafter of the holders of the shares of Series A Preferred Stock shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares of Series A Preferred Stock.

(d) Notice to Holders. In the event the Corporation shall propose to take any action of the type described in subsections (a), (b) or (c) of this Section 6, the Corporation shall give notice to each holder of shares of Series A Preferred Stock, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Conversion Price and the number, kind or class of shares or other securities or property which shall be deliverable upon conversion of shares of Series A Preferred Stock. In the case of any action which would require the fixing of a record date, such notice shall be given at least 15 days prior to the date so fixed, and in the case of all other action, such notice shall be given at least 20 days prior to the taking of such proposed action.

(e) Statement Regarding Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price of the Series A Preferred Stock pursuant to this Section 6, the Corporation shall compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. Each such statement shall be signed by the Corporation’s Chief Financial Officer.

(f) Treasury Stock. For the purposes of this Section 6, the sale or other disposition of any Common Stock theretofore held in the Corporation’s treasury shall be deemed to be an issuance thereof.

(g) Stockholder Approval. Notwithstanding any other provision in this Section 6 to the contrary, no adjustment (other than as set forth in this Section 6(g)) shall be made in the Conversion Price prior to the receipt by the Corporation of any requisite stockholder approval required by the rules of the National Association of Securities Dealers, Inc., if such rules are applicable to such adjustment. If such rules are applicable, (i) the Conversion Price shall immediately be adjusted to the maximum extent as would not require stockholder approval under such rules and (ii) the Corporation shall use its commercially reasonable efforts to obtain such stockholder approval as soon as reasonably practicable,

including by calling a special meeting of stockholders to vote on such Conversion Price adjustment.

7. Good Faith. The Corporation shall not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but shall at all times in good faith assist in the carrying out of all the provisions of this Certificate of Designation and in the taking of all such action as may be necessary or appropriate in order to protect the conversion and other rights of the holders of the shares of Series A Preferred Stock against impairment of any kind.

8. Redemption Rights.

(a) The Series A Preferred Stock shall not be redeemable by the Corporation prior to that date which is three (3) years after the Closing (the “First Call Date”). On and after the First Call Date, to the extent the Corporation shall have funds legally available for such payment, the Corporation may redeem at its option shares of Series A Preferred Stock, at any time in whole or from time to time in part, at a redemption price per share equal to the Liquidation Preference, plus accrued and unpaid dividends thereon to the date fixed for redemption (the “Redemption Price”).

(b) Upon the date that is seven (7) years after the Closing (the “Maturity Date”), all then outstanding shares of Series A Preferred Stock shall be redeemed by the Corporation at a redemption price per share equal to the Redemption Price.

(c) The Company shall redeem in full the Series A Preferred Stock, at the Redemption Price, on the date of the occurrence of a Change of Control. “Change of Control” means a reorganization, merger, consolidation or other transaction or transactions (whether or not the Company is a party thereto and specifically including, without limitation, open market purchases of securities) as a result of which any person or entity or “group” of persons and/or entities becomes the “beneficial owner” (as those terms are defined in and construed by judicial authority under Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, as that Rule may be amended from time to time) of Common Stock or options, warrants or other rights to acquire Common Stock or and Convertible Securities representing in the aggregate at least 50% of the ordinary voting power of the Company in the election of directors.

(d) Shares of Series A Preferred Stock which have been issued and reacquired in any manner, including shares purchased or redeemed, shall (upon compliance with any applicable provisions of the laws of the State of Delaware) have the status of authorized and unissued shares of the class of Preferred Stock undesignated as to series and may be redesignated and reissued as part of any series of the Preferred Stock; provided that no such issued and reacquired shares of Series A Preferred Stock shall be reissued or sold as Series A Preferred Stock.

9. Procedure for Redemption.

(a) In the event that fewer than all the outstanding shares of Series A Preferred Stock are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors and the shares to be redeemed shall be selected by lot or pro rata (with any fractional shares being rounded to the nearest whole share) as may be determined by the Board of Directors.

(b) In the event the Corporation shall redeem shares of Series A Preferred Stock, notice of such redemption shall be given by first class mail, postage prepaid, mailed not less than 30 days nor more than 60 days prior to the redemption date, to each holder of record of the shares to be redeemed at such holder’s address as the same appears on the stock register of the Corporation; provided that neither the failure to give such notice nor any defect therein shall affect the validity of the giving of notice for the redemption of any share of Series A Preferred Stock to be redeemed except as to the holder to whom the Corporation has failed to give said notice or except as to the holder whose notice was defective. Each such notice shall state: the redemption date (which shall be a date on or after the First Call Date); the number of shares of Series A Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of shares to be redeemed from such holder; the redemption price; the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and that dividends on the shares to be redeemed will cease to accrue on such redemption date.

(c) Notice having been mailed as aforesaid, from and after the redemption date, dividends on the shares of Series A Preferred Stock so called for redemption shall cease to accrue, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the redemption price) shall cease. Upon surrender in accordance with said notice of the certificates for any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), such share shall be redeemed by the Corporation at the redemption price aforesaid. In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.

FURTHER RESOLVED, that the statements contained in the foregoing resolutions creating and designating the said Series A Convertible issue of Preferred Stock and fixing the number, powers, preferences and relative, optional, participating, and other special rights and the qualifications, limitations, restrictions, and other distinguishing characteristics thereof shall, upon the effective date of said series, be deemed to be included in and be a part of the certificate of incorporation of the Corporation pursuant to the provisions of Sections 104 and 151 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, said Corporation has caused this Certificate to be signed by its Senior Vice President, the 31st day of August, 2001. The signature below shall constitute the affirmation or acknowledgment of the signatory that the instrument is the act and deed of the Corporation and that the facts stated herein are true.







		/s/ Curtis S. Shaw

		Curtis S. Shaw




		Senior Vice President

EX-3.2: AMENDED AND RESTATED BY-LAWS

Exhibit 3.2

Adopted as of November 5, 1999

AMENDED AND RESTATED BYLAWS
OF
CHARTER COMMUNICATIONS, INC.

ARTICLE I.
OFFICES

SECTION 1.1 Delaware Office. The office of Charter Communications, Inc. (the “Corporation”) within the State of Delaware shall be in the City of Dover, County of Kent.

SECTION 1.2 Other Offices. The Corporation may also have an office or offices and keep the books and records of the Corporation, except as otherwise may be required by law, in such other place or places, either within or without the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or the business of the Corporation may require.

ARTICLE II.
MEETINGS OF STOCKHOLDERS

SECTION 2.1 Place of Meetings. All meetings of holders of shares of capital stock of the Corporation shall be held at the office of the Corporation in the State of Delaware or at such other place, within or without the State of Delaware, as may from time to time be fixed by the Board or specified or fixed in the respective notices or waivers of notice thereof.

SECTION 2.2 Annual Meetings. An annual meeting of stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before the meeting (an “Annual Meeting”) shall, if required by law, be held at such place, on such date, and at such time as the Board shall each year fix.

SECTION 2.3 Special Meetings. Except as required by law and subject to the rights of holders of any series of Preferred Stock (as defined below), special meetings of stockholders may be called at any time only by the Chairman of the Board, the Chief Executive Officer or by the Board pursuant to a resolution approved by a majority of the then authorized number of directors. Any such call must specify the matter or matters to be acted upon at such meeting and only such matter or matters shall be acted upon thereat.

SECTION 2.4 Notice of Meetings. Except as otherwise required by law, notice of each meeting of stockholders, whether an Annual Meeting or a special meeting, shall state the purpose or purposes of the meeting, the place, date and hour of the meeting and, unless it is an Annual Meeting, shall indicate that the notice is being issued by or at the direction of the person or persons calling the meeting and shall be given not less than ten (10) or more than sixty (60) days before the date of said meeting, to each stockholder entitled to vote at such meeting. If mailed, notice is given when deposited in the United States mail, postage

prepaid, directed to each stockholder at such stockholder’s address as it appears on the stock records of the Corporation. Notice of an adjourned meeting need not be given if the date, time and place to which the meeting is to be adjourned was announced at the meeting at which the adjournment was taken, unless (i) the adjournment is for more than thirty (30) days, or (ii) the Board shall fix a new record date for such adjourned meeting after the adjournment.

SECTION 2.5 Quorum. At each meeting of stockholders of the Corporation, the holders of shares having a majority of the voting power of the capital stock of the Corporation issued and outstanding and entitled to vote thereat shall be present or represented by proxy to constitute a quorum for the transaction of business, except as otherwise provided by law. Where a separate vote by a class or classes or series is required, a majority of the voting power of the shares of such class or classes or series in person or represented by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter.

SECTION 2.6 Adjournments. In the absence of a quorum at any meeting of stockholders or any adjournment or adjournments thereof, the Chairman of the Board or holders of shares having a majority of the voting power of the capital stock present or represented by proxy at the meeting may adjourn the meeting from time to time until a quorum shall be present or represented by proxy. At any such adjourned meeting at which a quorum shall be present or represented by proxy, only business may be transacted which might have been transacted at the meeting as originally called if a quorum had been present or represented by proxy thereat. A meeting of stockholders at which a quorum is present may be adjourned from time to time as permitted by law.

SECTION 2.7 Notice of Stockholder Business and Director Nomination.

(a) Annual Meetings of Stockholders. (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an Annual Meeting only (A) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (B) by or at the direction of the Board of Directors or (C) by any stockholder of the Corporation who was a stockholder of record of the Corporation at the time the notice provided for in this Section 2.7 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and who complies with the notice and delivery procedures set forth in this Section 2.7.

(2) For nominations or other business to be properly brought before an Annual Meeting by a stockholder pursuant to clause (C) of paragraph (a)(1) of this Section 2.7, (A) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (B) any such proposed business other than nominations of persons for election to the Board of Directors must constitute a proper matter for stockholder action, (C) if the stockholder, or beneficial owner on whose behalf any such proposal or nomination is made, has provided the Corporation with a Solicitation Notice, as that term is defined in subclause III of this paragraph (a)(2) of Section 2.7, such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to the holders of at least the percentage of the Corporation’s voting shares required under applicable law to carry such proposal, or, in the case of a nomination or nominations,

have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares reasonably believed by such stockholder or beneficial owner to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder and (D) if no Solicitation Notice relating thereto has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of a Solicitation Notice under this section. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the forty fifth (45th) day nor earlier than the close of business on the seventieth (70th) day prior to the first anniversary (the “Mailing Anniversary”) of the date on which the Corporation first mailed proxy materials for the preceding year’s Annual Meeting (provided, however, that in the event that the date of the Annual Meeting is more than thirty (30) days before or more than thirty (30) days after the anniversary date of the preceding year’s Annual Meeting, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such Annual Meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such Annual Meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation). In no event shall the public announcement of an adjournment or postponement of an Annual Meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth: (I) as to each person whom the stockholder proposes to nominate for election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 14a-11 thereunder (and such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (II) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (III) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any, (ii) the class and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination and (iv) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee (an affirmative statement of such intent, a “Solicitation Notice”). The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

(3) Notwithstanding anything in the second sentence of paragraph (a)(2) of this Section 2.7 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation at an Annual Meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least fifty-five (55) days prior to the Mailing Anniversary, a stockholder’s notice required by this Section 2.7 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.

(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time the notice provided for in this Section 2.7 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting upon such election and who complies with the notice and delivery procedures set forth in this Section 2.7. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (a)(2) of this Section 2.7 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which the public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period ( or extend any time period) for the giving of a stockholder’s notice as described above.

(c) General. Only such persons who are nominated in accordance with the procedures set forth in this Section 2.7 shall be eligible to be elected at an Annual Meeting or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.7. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty (A) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.7 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by clause (a)(2)(III)(iv) of this Section 2.7) and (B) if any proposed nomination or business was

not made or proposed in compliance with this Section 2.7, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted.

(2) For purposes of this Section 2.7, “public announcement” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this Section 2.7, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.7. Nothing in this Section 2.7 shall be deemed to affect any rights (A) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (B) of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation.”)

SECTION 2.8 Proxies and Voting. At each meeting of stockholders, all matters (except in cases where a larger vote is required by law or by the Certificate of Incorporation or these Bylaws) shall be decided by a majority of the votes cast at such meeting by the holders of shares of capital stock present or represented by proxy and entitled to vote thereon, a quorum being present, provided, however, that directors shall be elected by a plurality of the votes cast. At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this Section 2.8 may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

SECTION 2.9 Inspectors. In advance of any meeting of stockholders, the Board may, and shall if required by law, appoint an inspector or inspectors. If, for any election of directors or the voting upon any other matter, any inspector appointed by the Board shall be unwilling or unable to serve, the chairman of the meeting shall appoint the necessary inspector or inspectors. The inspectors so appointed, before entering upon the discharge of their duties, shall be sworn faithfully to execute the duties of inspectors with strict impartiality, and according to the best of their ability, and the oath so taken shall be subscribed by them. Such inspectors shall determine the number of shares of capital stock of the Corporation outstanding and the voting power of each of the shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. The inspectors shall make a report in writing of any challenge, question or matter determined by them and shall execute a certificate of any fact found by them. No

director or candidate for the office of director shall act as an inspector of election of directors. Inspectors need not be stockholders.

SECTION 2.10 Consent of Stockholders in Lieu of Meeting. Any action required to be taken at any Annual Meeting or special meeting of stockholders of the Corporation, or any action which may be taken at any Annual Meeting or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested.

Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the Corporation in the manner prescribed in the first paragraph of this Section, a written consent or consents signed by a sufficient number of holders to take action are delivered to the Corporation in the manner prescribed in the first paragraph of this Section.

ARTICLE III.
DIRECTORS

SECTION 3.1 Powers. The business of the Corporation shall be managed by or under the direction of the Board. The Board may, except as otherwise required by law, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

SECTION 3.2 Number; Terms and Vacancies. The number of directors which shall constitute the whole Board shall be fixed at three (3) persons, until changed from time to time by resolution of the Board or by the stockholders. Any vacancies on the Board resulting from death, resignation, disqualification, removal or other cause shall be filled in the manner provided in the Certificate of Incorporation.

SECTION 3.3 Place of Meetings. Meetings of the Board shall be held at the Corporation’s office in the State of Delaware or at such other places, within or without such State, as the Board may from time to time determine or as shall be specified or fixed in the notice or waiver of notice of any such meeting.

SECTION 3.4 Regular Meetings. Regular meetings of the Board shall be held in accordance with a yearly meeting schedule as determined by the Board; or such meetings may be held on such other days and at such other times as the Board may from time to time determine. Regular meetings of the Board shall be held not less frequently than quarterly.

SECTION 3.5 Special Meetings. Special meetings of the Board may be called by a majority of the directors then in office (rounded up to the nearest whole number) or by the

Chairman of the Board and shall be held at such place, on such date, and at such time as they or he shall fix.

SECTION 3.6 Notice of Meetings. Notice of each special meeting of the Board stating the time, place and purposes thereof, shall be (i) mailed to each director not less than five (5) days prior to the meeting, addressed to such director at his or her residence or usual place of business, or (ii) shall be sent to him by facsimile or other means of electronic transmission, or shall be given personally or by telephone, on not less than twenty four (24) hours notice.

SECTION 3.7 Quorum and Manner of Acting. The presence of at least a majority of the authorized number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board. If a quorum shall not be present at any meeting of the Board, a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Except where a different vote is required or permitted by law, the Certificate of Incorporation or these Bylaws, the act of a majority of the directors present at any meeting at which a quorum shall be present shall be the act of the Board. Any action required or permitted to be taken by the Board may be taken without a meeting if all the directors consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the directors shall be filed with the minutes of the proceedings of the Board. Any one or more directors may participate in any meeting of the Board by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall be deemed to constitute presence in person at a meeting of the Board.

SECTION 3.8 Resignation. Any director may resign at any time by giving written notice to the Corporation; provided, however, that written notice to the Board, the Chairman of the Board, the Chief Executive Officer of the Corporation or the Secretary of the Corporation shall be deemed to constitute notice to the Corporation. Such resignation shall take effect upon receipt of such notice or at any later time specified therein and, unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective.

SECTION 3.9 Removal of Directors. Directors may be removed as provided by law and in the Corporation’s Certificate of Incorporation.

SECTION 3.10 Compensation of Directors. The Board may provide for the payment to any of the directors, other than officers or employees of the Corporation, of a specified amount for services as director or member of a committee of the Board, or of a specified amount for attendance at each regular or special Board meeting or committee meeting, or of both, and all directors shall be reimbursed for expenses of attendance at any such meeting; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

ARTICLE IV.
COMMITTEES OF THE BOARD

SECTION 4.1 Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided herein or in the resolution of the Board of Directors designating such committee, shall have and may exercise all the powers and authority of the Board of Director in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the Certificate of Incorporation or Delaware law to be submitted to stockholders for approval or (ii) adopting, amending or repealing any Bylaws of the Corporation.

SECTION 4.2 Audit Committee. Subject to Section 4.1, the Board may designate an Audit Committee of the Board, which shall consist of such number of members as the Board shall determine. The Audit Committee shall: (i) make recommendations to the Board as to the independent accountants to be appointed by the Board; (ii) review with the independent accountants the scope of their examinations; (iii) receive the reports of the independent accountants and meet with representatives of such accountants for the purpose of reviewing and considering questions relating to their examination and such reports; (iv) review, either directly or through the independent accountants, the internal accounting and auditing procedures of the Corporation; (v) review related party transactions; and (vi) perform such other functions as may be assigned to it from time to time by the Board. The Audit Committee may determine its manner of acting, and fix the time and place of its meetings, unless the Board shall otherwise provide.

SECTION 4.3 Compensation Committee. Subject to Section 4.1, the Board may designate members of the Board to constitute a Compensation Committee which shall consist of such number of directors as the Board may determine. The Compensation Committee may determine its manner of acting and fix the time and place of its meetings, unless the Board shall otherwise provide.

SECTION 4.4 Action by Consent; Participation by Telephone or Similar Equipment. Unless the Board shall otherwise provide, any action required or permitted to be taken by any committee may be taken without a meeting if all the members of the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the committee shall be filed with the minutes of the proceedings of the committee. Unless the Board shall otherwise provide, any one or more members of any such committee may participate in any meeting of the committee by means of conference telephone or similar communications equipment by means of which all

persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting of the committee.

SECTION 4.5 Resignations; Removals. Any member of any committee may resign at any time by giving notice to the Corporation; provided, however, that notice to the Board, the Chairman of the Board, the Chief Executive Officer of the Corporation, the chairman of such committee or the Secretary of the Corporation shall be deemed to constitute notice to the Corporation. Such resignation shall take effect upon receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective. Any member of any such committee may be removed at an time, either with or without cause, by the affirmative vote of a majority of the authorized number of directors at any meeting of the Board called for that purpose.

ARTICLE V.
OFFICERS

SECTION 5.1 Number, Titles and Qualification. The Corporation shall have such officers as may be necessary or desirable for the business of the Corporation. The officers of the Corporation may include a Chairman of the Board, a Chief Executive Officer, a President, one or more Vice Presidents, a Chief Financial Officer, a Secretary, one or more Assistant Secretaries, a Treasurer, and one or more Assistant Treasurers. The Chairman of the Board, Chief Executive Officer, President, Executive Vice Presidents, Senior Vice Presidents, and Chief Financial Officer shall be elected by the Board, which shall consider that subject at its first meeting after every Annual Meeting of stockholders. The Corporation shall have such other officers as may from time to time be appointed by the Board or the Chief Executive Officer. Each officer shall hold office until his or her successor is elected or appointed, as the case may be, and qualified or until his or her earlier resignation or removal. Any number of offices may be held by the same person.

SECTION 5.2 Chairman of the Board. The Chairman of the Board shall have general and active responsibility for the management of the business of the Corporation and shall be responsible for implementing all orders and resolutions of the Board. The Chairman of the Board shall be elected from among the directors, and the Chairman of the Board, or at the election of the Chairman of the Board, the Chief Executive Officer shall preside at all meetings of the stockholders and directors. The Chief Executive Officer shall report to the Chairman of the Board.

SECTION 5.3 Chief Executive Officer. The Chief Executive Officer shall supervise the daily operations of the business of the Corporation, and shall report to the Chairman of the Board. Subject to the provisions of these Bylaws and to the direction of the Chairman of the Board or the Board, he or she shall perform all duties which are commonly incident to the office of Chief Executive Officer or which are delegated to him or her by the Chairman of the Board or the Board. To the fullest extent permitted by law, he or she shall have power to sign all contracts and other instruments of the Corporation which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Corporation. The Chief Executive Officer shall perform the duties and exercise the

powers of the Chairman of the Board in the event of the Chairman of the Board’s absence or disability.

SECTION 5.4 President. The President shall have such powers and duties as may be delegated to him or her by the Chairman of the Board, the Board, or the Chief Executive Officer. The President shall perform the duties and exercise the powers of the Chief Executive Officer in the event of the Chief Executive Officer’s absence or disability.

SECTION 5.5 Vice President. Each Vice President shall have such powers and duties as may be delegated to him or her by the Board or the Chief Executive Officer.

SECTION 5.6 Chief Financial Officer. The Chief Financial Officer shall have responsibility for maintaining the financial records of the Corporation. He or she shall render from time to time an account of all such transactions and of the financial condition of the Corporation. The Chief Financial Officer shall also perform such other duties as the Board or the Chief Executive Officer may from time to time prescribe.

SECTION 5.7 Treasurer. The Treasurer shall have the responsibility for investments and disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions. The Treasurer shall also perform such other duties as the Board or the Chief Executive Officer may from time to time prescribe.

SECTION 5.8 Secretary. The Secretary shall issue all authorized notices for, and shall keep minutes of, all meetings of the stockholders and the Board. He or she shall have charge of the corporate books and shall perform such other duties as the Board or the Chief Executive Officer may from time to time prescribe.

SECTION 5.9 Delegation of Authority. The Chairman of the Board, the Board, or the Chief Executive Officer may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.

SECTION 5.10 Removal. Any officer of the Corporation may be removed at any time, with or without cause, by the Chairman of the Board, by the Board, or, except as to the Chairman of the Board, President, Executive Vice Presidents, Senior Vice Presidents, and Chief Financial Officer, by the Chief Executive Officer.

SECTION 5.11 Resignations. Any officer may resign at any time by giving written notice to the Corporation; provided, however, that notice to the Chairman of the Board, the Chief Executive Officer or the Secretary shall be deemed to constitute notice to the Corporation. Such resignation shall take effect upon receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

SECTION 5.12 Vacancies. Any vacancy among the officers, whether caused by death, resignation, removal or any other cause, shall be filled in the manner prescribed for election or appointment to such office.

SECTION 5.13 Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board, the Chairman of the Board, the Chief Executive Officer or

any other officer of the Corporation authorized by the Chairman of the Board or the Chief Executive Officer shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.

SECTION 5.14 Bonds of Officers. If required by the Chairman of the Board, the Board, or the Chief Executive Officer, any officer of the Corporation shall give a bond for the faithful discharge of his or her duties in such amount and with such surety or sureties as the Chairman of the Board, the Board or the Chief Executive Officer may require.

SECTION 5.15 Compensation. The salaries of the officers shall be fixed from time to time by the Board, unless and until the Board appoints a Compensation Committee.

SECTION 5.16 Officers of Operating Companies, Regions or Divisions. The Chief Executive Officer shall have the power to appoint, remove and prescribe the terms of office, responsibilities and duties of the officers of the operating companies, regions or divisions, other than those who are officers of the Corporation appointed by the Board.

ARTICLE VI.
CONTRACTS, CHECKS, LOANS, DEPOSITS, ETC.

SECTION 6.1 Contracts. The Board may authorize any officer or officers, agent or agents, in the name and on behalf of the Corporation, to enter into any contract or to execute and deliver any instrument, which authorization may be general or confined to specific instances; and, unless so authorized by the Board, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable pecuniarily for any purpose or for any amount.

SECTION 6.2 Checks, etc. All checks, drafts, bills of exchange or other orders for the payment of money out of the funds of the Corporation, and all notes or other evidences of indebtedness of the Corporation, shall be signed in the name and on behalf of the Corporation in such manner as shall from time to time be authorized by the Board or the Chief Executive Officer, which authorization may be general or confined to specific instances.

SECTION 6.3 Loans. No loan shall be contracted on behalf of the Corporation, and no negotiable paper shall be issued in its name, unless authorized by the Board, which authorization may be general or confined to specific instances, and bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board shall authorize.

SECTION 6.4 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as may be selected by or in the manner designated by the Board, the Chief Executive Officer or the Chief Financial Officer. The Board or its designees may make such special rules and regulations with respect to such bank accounts,

not inconsistent with the provisions of the Certificate of Incorporation or these Bylaws, as they may deem advisable.

ARTICLE VII.
CAPITAL STOCK

SECTION 7.1 Certificates of Stock. The shares of the capital stock of the Corporation shall be represented by certificates, provided that the Board by resolution or resolutions may provide that some or all of any or all classes or series of capital stock of the Corporation shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation by, the Chairman of the Board, President or a Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, certifying the number of shares owned by him or her. Any or all of the signatures on the certificate may be by facsimile.

SECTION 7.2 Transfers of Stock. Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 7.4 of these Bylaws, an outstanding certificate for the number of shares involved, if certificated, shall be surrendered for cancellation before a new certificate is issued therefor.

SECTION 7.3 Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board adopts a resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which shall

not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall be not more than ten (10) days after the date upon which the resolution fixing the record date is adopted. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary of the Corporation, request the Board to fix a record date. The Board shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board and no prior action by the Board is required by the Delaware General Corporation Law, the record date shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner prescribed by Section 2.10 hereof. If no record date has been fixed by the Board and prior action by the Board is required by the Delaware General Corporation Law with respect to the proposed action by written consent of the stockholders, the record date for determining stockholders entitled to consent to corporate action in writing shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

SECTION 7.4 Lost, Stolen or Destroyed Certificates. In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board may establish concerning proof of such loss, theft or destruction and concerning the giving of satisfactory bond or bonds of indemnity.

SECTION 7.5 Regulations. The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board may establish.

ARTICLE VIII.
NOTICES

SECTION 8.1 Notices. Except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder, director, officer, employee or agent may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage-paid, or with a recognized overnight-delivery service or by sending such notice by facsimile or other means of electronic transmission, or such other means as is provided by law. Any such notice shall be addressed to such stockholder, director, officer, employee or agent at such person’s last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand delivered, or dispatched, if delivered through the mails or by overnight delivery service, or by telegram, mailgram or facsimile, shall be the time of the giving of the notice.

SECTION 8.2 Waivers. A written waiver of any notice, signed by a stockholder, director, officer, employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, director, officer, employee, agent. Neither the business nor the purpose of any meeting need be specified in such a waiver.

ARTICLE IX.
MISCELLANEOUS

SECTION 9.1 Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board or a committee thereof.

SECTION 9.2 Corporate Seal. The Board may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary of the Corporation. If and when so directed by the Board or a committee thereof, duplicates of the seal may be kept and used by the Corporation’s Treasurer or by an Assistant Secretary or Assistant Treasurer.

SECTION 9.3 Reliance Upon Books, Reports and Records. Each director, each member of any committee designated by the Board, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care or on behalf of the Corporation.

SECTION 9.4 Fiscal Year. The fiscal year of the Corporation shall be as fixed by the Board.

SECTION 9.5 Time Periods. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

ARTICLE X.
INDEMNIFICATION OF DIRECTORS AND OFFICERS

SECTION 10.1 Right to Indemnification. Each person who was or is made a party or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter, a “proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter, a “Covered Person”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended, against all expense, liability and loss

(including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Covered Person in connection therewith; provided, however, that, except as provided in Section 10.3 hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such Covered Person in connection with a proceeding (or part thereof) initiated by such Covered Person only if such proceeding (or part thereof) was authorized by the Board.

SECTION 10.2 Right to Advancement of Expenses. The Corporation shall pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any such proceeding in advance of its final disposition (hereinafter, an “advancement of expenses”), provided, however, that, if the Delaware General Corporation Law so requires, an advancement of expenses incurred by a Covered Person in his or her capacity as such shall be made only upon delivery to the Corporation of an undertaking (hereinafter, an “undertaking”), by or on behalf of such Covered Person, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter, a “final adjudication”) that such Covered Person is not entitled to be indemnified for such expenses under this Section 10.2 or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections 10.1 and 10.2 hereof shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be such and shall inure to the benefit of the Covered Person’s heirs, executors and administrators.

SECTION 10.3 Right of Covered Person to Bring Suit. If a claim under Section 10.1 or 10.2 hereof is not paid in full by the Corporation within sixty (60) days after a written claim therefor has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the Covered Person may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Covered Person shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the Covered Person to enforce a right to indemnification hereunder (but not in a suit brought by the Covered Person to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the Covered Person has not met the applicable standard for indemnification set forth in the Delaware General Corporation Law. To the fullest extent permitted by law, neither the failure of the Corporation (including its disinterested directors, committee thereof, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its disinterested directors, committee thereof, independent legal counsel or its stockholders) that the Covered Person has not met such applicable standard of conduct, shall create a presumption that the Covered Person has not met the applicable standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit. In any suit brought by the Covered Person to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the

Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Covered Person is not entitled to be indemnified, or to such advancement of expenses, under this Article X or otherwise shall, to the extent permitted by law, be on the Corporation.

SECTION 10.4 Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article X shall not be exclusive of any other right which any person may have or hereafter acquire by any statute, the Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

SECTION 10.5 Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.

SECTION 10.6 Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article X with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

ARTICLE XI.
AMENDMENTS

The Board may from time to time adopt, make, amend, supplement or repeal these Bylaws by vote of a majority of the Board.

Exhibit 10.1 Conformed Copy AGREEMENT This Agreement is made this 24th day of September 2001 between Charter Communications, Inc. ("Charter") and Jerald Kent ("Kent") with reference to the following facts: 1. Kent currently serves as president and chief executive officer of Charter and a member of its Board of Directors pursuant to an employment agreement dated as of August 28, 1998 (the "Employment Agreement"). 2. Kent has advised Charter that he does not intend to extend the term of the Employment Agreement, which runs through December 23, 2001. 3. Accordingly, Kent and Charter have mutually agreed that Kent's service as an employee of Charter will end on September 28, 2001, and that he will resign from Charter's Board of Directors on such date. Accordingly, Charter and Kent hereby agree as follows: 1. TERMINATION OF EMPLOYMENT AGREEMENT. The Employment Agreement and all of the respective rights and obligations of the parties thereunder shall terminate and be of no further or effect on September 28, 2001, provided such termination shall not affect (a) Kent's right to his current base salary, and reimbursement for business expenses incurred, through September 28, 2001; (b) Kent's right to indemnification under Section 9 of the Employment Agreement; and (c) Kent's obligations under Section 8.2 of the Employment Agreement which shall survive. On September 28, 2001, Kent shall resign from all positions as an officer, director or employee of Charter and each of its affiliates and subsidiaries and shall deliver a written resignation to such effect. 2. CONSULTANCY. Kent shall make himself available for consultation at times reasonably convenient to him in his sole discretion through December 23, 2001, which consultancy may be telephonic at his option. Kent shall be paid an amount equal to his current base salary under the Employment Agreement prorated for the period from September 28, 2001 through December 23, 2001, which amount shall be paid (subject to all required withholding), by wire transfer of immediately available funds on or before September 28, 2001, regardless of whether Kent performs any consulting services to Charter hereunder. 3. OPTION TERMINATION. All options currently held by Kent to acquire Membership Interests in Charter Communications Holdings LLC or other equity interests in Charter or its subsidiaries, whether vested or unvested, shall be cancelled and of no further force or effect as of the date of this Agreement and Kent shall not receive any payment therefor. All applicable option agreements will be marked "cancelled" and returned to Charter's general counsel. Kent has not assigned or otherwise transferred any rights under any of such option agreements.

4. BONUS. Kent shall be paid a bonus in the amount of $900,000, which amount (subject to all required withholding) shall be paid by wire transfer of immediately available funds on or before September 28, 2001. 5. CHARITABLE CONTRIBUTION. Charter shall contribute, at Kent's written direction in increments of not less than $50,000, an aggregate amount of $500,000 to one or more charities (either nationally recognized or located in the Greater St. Louis area) designated by Kent prior to September 28, 2001, which charity or charities shall be reasonably acceptable to Charter. 6. COBRA REIMBURSEMENT. Promptly upon receipt of a written request therefor from Kent, Charter shall reimburse any costs incurred by Kent under the COBRA health care continuation rules for the 18-month period beginning on September 28, 2001. Kent understands that such reimbursement will be 1099'd or W-2'd to him, as applicable. 7. CHARTER AIRCRAFT. At any time and from time to time through December 24, 2001, Kent and any passengers travelling with him shall be entitled to use Charter's Hawker aircraft for up to an aggregate of 20 hours of flight time. Such usage will be billed to him in accordance with Charter's current policy. 8. KENT AUTOMOBILE. Charter acknowledges that it has provided Kent with an automobile for his use, which automobile is registered in his name, and that Kent shall retain ownership of such automobile following termination of his employment. Kent understands that Charter may, if so required by applicable regulations, issue a 1099 or W-2 to him with respect to his retention of the automobile. 9. CABLE SERVICE. Charter shall provide to Kent without charge, at the two addresses currently being serviced by Charter for him for so long as Kent shall own such properties, (a) cable and modem services at the level provided to him on the date of this Agreement and (b) technical support from Charter personnel as Kent shall reasonably request from time to time.

10. NONSOLICITATION. Kent shall not, prior to December 24, 2001, solicit for employment or employ any person employed by Charter or any of its subsidiaries on the date of this Agreement, provided that the foregoing shall not apply to (a) any of Kent's executive assistants (other than Steve Schumm) or secretaries or (b) subject to Charter's prior written consent which shall not be unreasonably withheld, any non-essential personnel. For the avoidance of doubt and without limiting the scope of "essential" personnel, officers of Charter and its subsidiaries shall be deemed essential personnel. Executed this 24th day of September, 2001. CHARTER COMMUNICATIONS, INC. By: /s/ William D. Savoy ------------------------------- /s/ Jerald Kent - ------------------------------- Jerald Kent

EX-10.2: EMPLOYMENT AGREEMENT

Exhibit 10.2
Conformed Copy

EMPLOYMENT AGREEMENT

This Employment Agreement is made as of the 28th day of September 2001, by and between Kent D. Kalkwarf, an individual residing in the State of Missouri (the “Executive”) and Charter Communications, Inc., a Delaware corporation (“Charter”) with reference to the following facts:

Charter wishes to retain Executive to serve as Executive Vice President and Chief Financial Officer of Charter from the date hereof and on the terms and conditions set forth herein;

Executive desires to serve as Executive Vice President and Chief Financial Officer of Charter from the date hereof and on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:

1. Interpretation.

1.1 Defined Terms.

“Affiliate” shall mean with respect to any person or entity any other person or entity who controls, is controlled by or is under common control with such person or entity.

“Allen” shall mean Paul G. Allen.

“Board” shall mean the Board of Directors of Charter or a committee thereof.

“Change of Control” means (a) a sale of more than 49.9% of the outstanding capital stock of Charter in a single or related series of transactions, except where Allen and his Affiliates retain effective voting control of Charter, the merger or consolidation of Charter with or into any other corporation or entity, other than a wholly-owned subsidiary of Charter, except where Allen and his Affiliates have effective voting control of the surviving entity, or any other transaction, or event, a result of which is that Allen holds less than 50.1% of the voting power of the surviving entity, except where Allen and his Affiliates retain effective voting control of Charter, or a sale of all or substantially all of the assets of Charter (other than to an entity majority-owned or controlled by Allen and his Affiliates); where , in any such case (b) Executive’s employment with Charter is terminated or his duties are materially diminished (it being understood that neither Charter’s failure to be a “public” company as such term is commonly understood nor his obligation, if any, to report to a committee of the Board following any merger or similar transaction constitute a material diminution in Executive’s duties under this Agreement).

2. Employment, Duties and Authority.

Charter hereby agrees to employ the Executive, and the Executive agrees to be employed, as Executive Vice President and Chief Financial Officer of Charter. As Executive Vice President and Chief Financial Officer of Charter, the Executive shall report directly to the Chief Executive Officer of Charter (or to a committee of the Board) and,

subject to the control and supervision of such Chief Executive Officer (or committee), shall have such duties and responsibilities as are typically performed by a chief financial officer and such other executive duties not inconsistent with the foregoing as may be assigned to Executive from time to time. The Executive shall devote substantially all of his business time, attention, energies, best efforts and skills to the diligent performance of his duties hereunder. Notwithstanding the foregoing, it is understood that the Executive may expend a reasonable amount of time for personal. charitable, investment and other activities so long as such activities shall not interfere in any material respect with the performance by the Executive of his duties and responsibilities hereunder.

3. Term.

The term of this Agreement shall commence on the date hereof and shall terminate on December 31, 2005 (the “Term”).

4. Compensation and Benefits.

4.1 Cash Compensation.

a. Base Salary. During the Term of this Agreement, Charter shall pay the Executive an annual base salary at the rate of Three Hundred Fifty Thousand Dollars ($350,000) or such higher rate as may from time to time be determined by the Board in its discretion, which shall be payable consistent With Charter’s payroll practices.

b. Bonus. The Executive shall be eligible to receive an annual target bonus equal to fifty percent of Executive’s base salary, the amount of such bonus to be determined and paid in accordance with Charter’s Executive Bonus Policy, consistent with past practices. Executive shall also be eligible to be considered for additional bonuses at the discretion of the Board. With respect to the year ended December 31, 2001, Executive shall be paid a bonus of $175,000 by January 15, 2002.

4.2 Benefit Plans. The Executive shall be entitled to participate in any disability insurance, pension, or other benefit plan of Charter now existing or hereafter adopted for the benefit of employees or executives of Charter generally. To the extent that Charter does not provide life insurance in an amount at least equal to the unpaid amount of Executive’s base salary through the end of the Term, Charter shall continue to pay to Executive’s estate an amount equal to Executive’s base salary, in installments, through the end of the Term.

4.3 Vacation. Charter acknowledges that the Executive currently has six weeks of accrued vacation (which Charter, at its sole discretion, may compensate Executive for in lieu of having Executive utilize such vacation). The Executive shall be entitled to compensated vacation in each fiscal year consistent with Charter’s policy, to be taken at times which do not unreasonably interfere with the performance of the Executive’s duties hereunder. Unused vacation time shall be treated in accordance with Charter’s policy.

4.4 Expenses. The Executive shall be entitled to receive reimbursement for all reasonable out-of pocket expenses incurred by the Executive in the performance of his

duties hereunder, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by Charter.

4.5 Automobile. Charter shall provide an Audi A-8 (or comparable cost car selected by Executive) for the Executive’s use and shall pay all business expenses associated with the use of such car by the Executive.

Options; Restricted Stock.

5.1 As a matter of separate inducement and agreement in connection with his employment hereunder and not in lieu of any salary or other compensation, Charter shall grant to the Executive options (the “Executive Options”) to purchase Seven Hundred Fifty Thousand (750,000) Shares of the Class A Common Stock of Charter at an exercise price equal to the fair market value of such shares on the date of grant. Such options shall vest in accordance with and shall otherwise have the terms and conditions set forth in the form of option agreement previously delivered to the Executive.

5.2 As a matter of separate inducement and agreement in connection with his employment hereunder and not in lieu of any salary or other compensation, Charter shall issue to the Executive Fifty Thousand (50,000) Shares of Class A Common Stock of Charter (the “Shares”). The restrictions on the Shares shall lapse and the grant shall otherwise have the terms and conditions set forth in the form of Restricted Stock Agreement previously delivered to the Executive.

6. Indemnification.

Charter agrees to indemnity and hold harmless to the maximum extent permitted by law the Executive from and against any claims, damages, liabilities, losses, costs or expenses in connection with or arising out of the performance by the Executive of his duties as an officer of Charter or any of its subsidiaries or Affiliates.

7. Termination. This Agreement may be terminated as follows:

7.1 By the Executive for Good Reason. The Executive may terminate this Agreement for Good Reason (as defined below) upon thirty (30) days’ advance written notice to Charter. “Good Reason” shall exist if, without the Executive’s consent: (A) there is an assignment to the Executive of any duties materially inconsistent with, or which constitutes a material reduction of the Executive’s position, duties, responsibilities, status or authority with Charter (it being understood that Charter’s cessation as a “public” company shall not be a material reduction in the Executive’s position, duties, responsibilities, status or authority) and Charter shall not have rectified same within the later of (a) thirty (30) days of written notice from the Executive (b) or if Charter elects, within thirty (30) days after receipt of such written notice, to require that any alleged claim of Good Reason be submitted to binding arbitration, then ten days (10) days after any determination adverse to Charter to rectify such event (any such arbitration shall be held in St. Louis under the local arbitration rules of JAMS or other entity mutually agreed to and such arbitration decision shall be made no later than sixty (60) days after Charter’s election to require such arbitration); (B) the Executive is required to report, directly or indirectly to persons other than the Chief

Executive Officer or to the Board (except that Executive may be required to report to a Board committee following any merger or similar transaction); (C) removal of the Executive from the position he holds pursuant hereto, except in connection with the termination of the Executive for Cause (as defined below); (D) the principal place of business of Charter, or the Executive’s base, shall be outside the Greater St. Louis, Missouri area; or (e) a Change of Control.

7.2 By Charter for Cause. Charter may terminate this Agreement for Cause upon thirty (30) days’ advance written notice to the Executive. “Cause” shall mean (i) conviction of a felony offense or of a misdemeanor that involves dishonesty or moral turpitude; (ii) the refusal to comply with the lawful directives of the Chief Executive Officer or the Board, within ten (10) days after written notice of such directive from the Chief Executive Officer or the Board; (iii) conduct on the part of the Executive in the course of his employment which constitutes gross negligence or willful misconduct which conduct is not cured within ten (10) days after written notice thereof from the Chief Executive Officer or the Board; (iv) the Executive’s breach of his fiduciary duties to the Company; (v) the Executive’s death or his Disability (as defined in Charter’s 2001 Stock Incentive Plan); or (vi) the Executive’s possession or use of illegal drugs or excessive use of alcohol on Company premises on work time or at a work related function (other than alcohol served generally in connection with such function). Should Executive commit or be alleged to have committed a felony offense or a misdemeanor of the character specified in clause (i), Charter may suspend Executive with pay. If Executive is subsequently convicted with respect to the matters giving rise to the suspension, Executive shall immediately repay all compensation or other amounts paid him hereunder from the date of the suspension and any of the Executive Options or Shares which vested after the date of suspension shall forthwith be cancelled and if theretofore sold by Executive, the cash value thereof paid to Charter.

7.3 Effect of Termination. In the event of the termination of this Agreement by Charter without Cause or by Executive For Good Reason, Charter shall pay to the Executive an amount equal to the aggregate base salary due the Executive during the remainder of the Term and a full prorated bonus for the year in which termination occurs. Upon termination of this Agreement by Charter for Cause or by Executive without Good Reason, then the Executive shall cease to be entitled to receive any compensation or other payments with respect to periods after the date of such termination.

8. Covenant Not to Compete; Confidentiality.

8.1 Covenant Not to Compete. The Executive recognizes and acknowledges that Charter is placing its confidence and trust in the Executive. The Executive, therefore, covenants and agrees that as to clauses (a), (b), (c) and (e) hereof during the Executive’s employment with Charter and solely as to clause (d) the specific time period provided in such clause, the Executive shall not, either directly or indirectly, without the prior written consent of the Board:

a. Engage in or carry on any business or in any way become associated with any business which is similar to or is in competition with the Business of Charter. As used in this Section 8, the term “Business of Charter” shall mean the business of owning or operating cable television systems and related businesses.

b. Solicit the business of any person or entity, on behalf of himself or any other person or entity, which is or has been at any time during the term of this Agreement a customer or supplier of Charter including, but not limited to, former or present customers or suppliers with whom the Executive has had personal contact during, or by reason of, his relationship with Charter.

c. Be or become an employee, agent. consultant, representative, director or officer of, or be otherwise in any manner associated with, any person, firm, corporation, association or other entity which is engaged in or is carrying on any business which is in competition with the Business of Charter;

d. For a period of twenty-four (24) months after termination of the Executive’s employment for any reason whether by Charter or Executive, solicit directly or indirectly for employment or employ (or directly or indirectly cause any entity in which the Executive has an interest or is employed by to solicit or employ), any person employed by Charter or any of its subsidiaries at the time of such termination; provided however, that if such termination occurs after January 1, 2005, and is by Charter without Cause or by the Executive with Good Reason, then the applicable period shall be twelve (12) months after termination of employment; or

e. Be or become a shareholder, joint venturer, owner (in whole or in part), or partner, or be or become associated with or have any proprietary or financial interest in or of any firm, corporation, association or other entity which is engaged in or is carrying on any business which is similar to or in competition with the Business of Charter, provided, however, that nothing contained in this Section 8 shall prohibit the Executive from owning less than 2% of the shares of a publicly held corporation engaged in the Business of Charter.

The Executive hereby recognizes and acknowledges that the existing Business of Charter extends throughout the United States of America and therefore agrees that the covenants not to compete contained in this Section 8 shall be applicable nationally. In the event that a court of competent jurisdiction determines that the scope of the non-compete provisions set forth in this Section 8 are unenforceable in any respect, then these provisions shall be deemed to be modified as necessary so that the scope of the non-compete provisions contained herein are nonetheless as broad as possible and yet enforceable under applicable law in accordance with their terms.

8.2 Confidentiality; Non-Disparagement. The Executive will not divulge, and will not permit or suffer the divulgence of, any confidential knowledge or confidential information with respect to the operations or finances of Charter or any of its Affiliates or with respect to confidential or secret customer lists, processes, machinery, plans, devices or products licensed, manufactured or sold, or services rendered, by Charter or any of its Affiliates other than in the regular course of business of Charter or as required by law; provided, however, that the Executive has no obligation, express or implied, to refrain from using or disclosing to others any such knowledge or information which is or hereafter shall become available to the public otherwise than by disclosure by the Executive in breach of this Agreement. Executive will not directly or indirectly disparage or otherwise make

adverse references to Charter or any of its officers, directors, employees or Affiliates at any time during or after his employment with Charter.

Notices.

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be sufficiently given if delivered in person or transmitted by facsimile or similar means of recorded electronic communication to the relevant party as follows:

a. in the case of the Executive, to the address set forth opposite his name on the signature page hereto, with a copy to:


	Daniel Bergstein, Esq.




	Paul Hastings Janofsky & Walker




	399 Park Avenue




	New York NY 10022-4697




	Telephone:	212 318 6000




	Facsimile:	212 318 4090




	E-mail:	danielbergstein@paulhastings.com









b.	in the case of Charter, to:









	Charter Communications, Inc.




	12405 Powerscourt Drive




	St. Louis, MO 63101




	Attn: Curt Shaw, General Counsel




	Telephone:	314 965 0555




	Facsimile:	314 965 8793









	with a copy to:









	Irell & Manella LLP




	1800 Avenue of the Stars, Suite 900




	Los Angeles, CA 90067




	Attn: Alvin Segel




	Telephone:	310 277 1010




	Facsimile:	310 203 7199




	E-mail:	asegel@irell.com

Any such notice or other communication shall be deemed to have been given and received on the day on which it is delivered or telecopied (or, if such day is not a business day or if the notice or other communication is not telecopied during business hours, at the place of receipt, on the next following business day). Any party may change its address for the purposes of this Section by giving notice to the other parties in accordance with the foregoing.

10. Assignability and Enforceability. This Agreement shall be binding on and enforceable by the parties and their respective successors and permitted assigns. No party may assign any of its rights or benefits under this Agreement to any person without the prior written consent of the other party.

11. Expenses of this Agreement. Each party shall bear its own costs and expenses (including, without limitation, legal, accounting and other professional fees) incurred in connection with this Agreement or the transactions contemplated hereby.

12. Consultation. The parties shall consult with each other before issuing any press release or making any other public announcement with respect to this Agreement or the transactions contemplated hereby and, except as required by any applicable law or regulatory or stock exchange requirement, neither of them shall issue any such press release or make any such public announcement without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed.

13. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflicts of laws thereof.

14. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same instrument.

15. Currency. Unless otherwise indicated, all dollar amounts in this Agreement are expressed in United States dollars.

16. Sections and Headings. The division of this Agreement into Sections and the insertion of headings are for reference purposes only and shall not affect the interpretation of this Agreement.

17. Number and Gender. In this Agreement, words importing the singular number only shall include the plural and vice versa and words importing gender shall include all genders.

18. Entire Agreement. This agreement and any agreements or documents referred to herein or executed contemporaneously herewith, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral. There are no conditions, covenants, agreements, representations, warranties or other provisions, express or implied, collateral, statutory or otherwise, relating to the subject matter hereof except as herein provided.

19. Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination shall not impair or affect the validity, legality or enforceability of the remaining provisions hereof, and each provision is hereby declared to be separate, severable and distinct.

20. Amendments and Waivers. No amendment or waiver of any provision of this Agreement shall be binding on any party unless consented to in writing by such party. No waiver of any provision of this Agreement shall be construed as a waiver of any other provision nor shall any waiver constitute a continuing waiver unless otherwise expressly provided. No provision of this Agreement shall be deemed waived by a course of conduct unless such waiver is in writing signed by all parties and stating specifically that it was intended to modify this Agreement.

21. Taxes; Withholding. All amounts payable hereunder shall be subject to all applicable withholding requirements under federal, state and local tax law.

22. Survival. The provisions of Sections 6, 8.1(d), 12 and 13 shall survive the termination of this Agreement.

IN WITNESS WHEREOF the parties have executed this Agreement.


		CHARTER COMMUNICATIONS, INC.














		By:		/s/ William D. Savoy Authorized Signatory














				KENT D. KALKWARF




				305 North Bemiston Avenue




				Clayton, Missouri 63105














				/s/ Kent D. Kalkwarf

EX-10.3: EMPLOYMENT AGREEMENT

Exhibit 10.3
Conformed Copy

EMPLOYMENT AGREEMENT

This Employment Agreement is made as of the 28th day of September 2001, by and between David G. Barford, an individual residing in the State of Missouri (the “Executive”) and Charter Communications, Inc., a Delaware corporation (“Charter”) with reference to the following facts:

Charter wishes to retain Executive to serve as Executive Vice President and Chief Operating Officer of Charter from the date hereof and on the terms and conditions set forth herein;

Executive desires to serve as Executive Vice President and Chief Operating Officer of Charter from the date hereof and on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:

1. Interpretation.

1.1 Defined Terms.

“Affiliate” shall mean with respect to any person or entity any other person or entity who controls, is controlled by or is under common control with such person or entity.

“Allen” shall mean Paul G. Allen.

“Board” shall mean the Board of Directors of Charter or a committee thereof.

2. Employment, Duties and Authority.

Charter hereby agrees to employ the Executive, and the Executive agrees to be employed, as Executive Vice President and Chief Operating Officer of Charter. As Executive Vice President and Chief Operating Officer of Charter, the Executive shall report directly to the Chief Executive Officer of Charter (or to a committee of the Board) and,

subject to the control and supervision of such Chief Executive Officer (or committee), shall have such duties and responsibilities as are typically performed by a chief operating officer and such other executive duties not inconsistent with the foregoing as may be assigned to Executive from time to time. The Executive shall devote substantially all of his business time, attention, energies, best efforts and skills to the diligent performance of his duties hereunder. Notwithstanding the foregoing, it is understood that the Executive may expend a reasonable amount of time for personal. charitable, investment and other activities so long as such activities shall not interfere in any material respect with the performance by the Executive of his duties and responsibilities hereunder.

3. Term.

The term of this Agreement shall commence on the date hereof and shall terminate on December 31, 2005 (the “Term”).

4. Compensation and Benefits.

4.1 Cash Compensation.

4.4 Expenses. The Executive shall be entitled to receive reimbursement for all reasonable out-of pocket expenses incurred by the Executive in the performance of his

duties hereunder, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by Charter.

5. Options; Restricted Stock.

6. Indemnification.

7. Termination. This Agreement may be terminated as follows:

8. Covenant Not to Compete; Confidentiality.

8.1 Covenant Not to Compete. The Executive recognizes and acknowledges that Charter is placing its confidence and trust in the Executive. The Executive, therefore, covenants and agrees that as to clauses (a), (b), (c) and (e) hereof during the Executive’s employment with Charter and solely as to clause (d) the specific time period provided in such clause, the Executive shall not, either directly or indirectly, without the prior written consent of the Board:

adverse references to Charter or any of its officers, directors, employees or Affiliates at any time during or after his employment with Charter.

9. Notices.

a. in the case of the Executive, to the address set forth opposite his name on the signature page hereto, with a copy to:


	Daniel Bergstein, Esq.




	Paul Hastings Janofsky & Walker




	399 Park Avenue




	New York NY 10022-4697




	Telephone:	212 318 6000




	Facsimile:	212 318 4090




	E-mail:	danielbergstein@paulhastings.com









b.	in the case of Charter, to:









	Charter Communications, Inc.




	12405 Powerscourt Drive




	St. Louis, MO 63101




	Attn: Curt Shaw, General Counsel




	Telephone:	314 965 0555




	Facsimile:	314 965 8793









	with a copy to:









	Irell & Manella LLP




	1800 Avenue of the Stars, Suite 900




	Los Angeles, CA 90067




	Attn: Alvin Segel




	Telephone:	310 277 1010




	Facsimile:	310 203 7199




	E-mail:	asegel@irell.com