Charter Communications : Notice of Pendency of Derivative Action Proposed Settlement

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

MATTHEW SCIABACUCCHI	:
and HIALEAH EMPLOYEES'	:
RETIREMENT SYSTEM,	:
	:
Plaintiffs,	:
	:
v.	:
	: C.A. No. 11418-VCG
LIBERTY BROADBAND CORPORATION,	:
JOHN MALONE, GREGORY MAFFEI,	:
MICHAEL HUSEBY, BALAN NAIR,	:
ERIC ZINTERHOFER, CRAIG JACOBSON,	:
THOMAS RUTLEDGE, DAVID MERRITT,	:
LANCE CONN, and JOHN MARKLEY,	:
	:
Defendants,	:
	:
and	:
	:
CHARTER COMMUNICATIONS, INC.,	:
	:

Nominal Defendant. :

NOTICE OF PENDENCY OF DERIVATIVE ACTION, PROPOSED SETTLEMENT OF DERIVATIVE ACTION, SETTLEMENT HEARING, AND RIGHT TO APPEAR

The Court of Chancery of the State of Delaware authorized this Notice. This is

not a solicitation from a lawyer.

TO: ALL PERSONS OR ENTITIES WHO OR WHICH HELD SHARES OF CHARTER COMMUNICATIONS, INC. ("CHARTER") COMMON STOCK AS OF THE CLOSE OF TRADING ON APRIL 18, 2023 ("CURRENT CHARTER STOCKHOLDERS").

The purpose of this Notice is to inform you of: (i) the pendency of the above- captioned stockholder derivative action (the "Action"), which was brought by plaintiffs Matthew Sciabacucchi ("Sciabacucchi") and Hialeah Employees'

Retirement System ("Hialeah," and, together with Sciabacucchi, "Plaintiffs"), on behalf of and for the benefit of Charter, in the Court of Chancery of the State of Delaware (the "Court"); (ii) a proposed settlement of the Action (the "Settlement"), subject to Court approval, as provided in the Stipulation and Agreement of Settlement, Compromise, and Release dated as of March 3, 2023 (the "Stipulation");

1. the hearing that the Court will hold on June 22, 2023 at 11:00 a.m. to determine whether to approve the proposed Settlement and to consider the application by
   Plaintiffs' Counsel1 for an award of attorneys' fees and litigation expenses
   (including a request for an incentive payment to Plaintiffs); and (iv) Current Charter
   Stockholders' rights with respect to the proposed Settlement and Plaintiffs' Counsel's application for attorneys' fees and expenses.2

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.

YOUR RIGHTS WILL BE AFFECTED BY THE PROPOSED

SETTLEMENT OF THIS ACTION.

The Stipulation was entered into as of March 3, 2023, between and among (i) Plaintiffs; (ii) defendants John Malone, Gregory Maffei, Michael Huseby, Balan Nair, Eric Zinterhofer, Craig Jacobson, Thomas Rutledge, David Merritt, Lance Conn, and John Markley (collectively, the "Director Defendants" or the "Individual Defendants") and defendant Liberty Broadband Corporation ("Broadband" and, together with the Director Defendants, the "Defendants"); and (iii) Charter (or the "Nominal Defendant" and, together with Plaintiffs and Defendants, the "Parties" and each a "Party"), subject to the approval of the Court pursuant to Delaware Chancery Court Rule 23.1.

As described in paragraph 32 below, the Settlement provides for a cash payment of $87.5 million, which, after deducting any fee and expense award to Plaintiffs' Counsel and any applicable taxes, will be paid to Charter.

Because the Action was brought as a derivative action, which means that it was brought on behalf of and for the benefit of Charter, the benefits from the

1. Plaintiffs' Counsel consist of the law firms of Bernstein Litowitz Berger & Grossmann LLP, Block & Leviton LLP, and Heyman Enerio Gattuso & Hirzel LLP.
2. All capitalized terms not otherwise defined in this Notice shall have the meaning provided in the Stipulation or the Scheduling Order, which are available in the "Investors" section of Charter's website, https://ir.charter.com/.

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Settlement will go to Charter. Individual Charter stockholders will not receive any direct payment from the Settlement.

PLEASE NOTE: THERE IS NO PROOF OF CLAIM FORM FOR STOCKHOLDERS TO SUBMIT IN CONNECTION WITH THIS SETTLEMENT, AND STOCKHOLDERS ARE NOT REQUIRED TO TAKE ANY ACTION IN RESPONSE TO THIS NOTICE.

WHAT IS THE PURPOSE OF THIS NOTICE?

1. The purpose of this Notice is to explain the Action, the terms of the proposed Settlement, and how the proposed Settlement affects Charter stockholders' legal rights.
2. In a derivative action, one or more persons or entities who are current stockholders of a corporation sue on behalf of and for the benefit of the corporation, seeking to enforce the corporation's legal rights. In this case, Plaintiffs have filed suit against Defendants on behalf of and for the benefit of Charter.
3. The Court has scheduled a hearing to consider the fairness, reasonableness, and adequacy of the Settlement and the application by Plaintiffs' Counsel for an award of attorneys' fees and expenses (the "Settlement Fairness Hearing"). See paragraphs 40-48 below for details about the Settlement Fairness Hearing, including the location, date, and time of the hearing.

WHAT IS THIS CASE ABOUT? WHAT HAS HAPPENED SO FAR?

THE FOLLOWING DESCRIPTION OF THE ACTION AND THE SETTLEMENT HAS BEEN PREPARED BY COUNSEL FOR THE PARTIES. THE COURT HAS MADE NO FINDINGS WITH RESPECT TO SUCH MATTERS, AND THIS NOTICE IS NOT AN EXPRESSION OR STATEMENT BY THE COURT OF FINDINGS OF FACT.

A MORE COMPLETE STATEMENT OF THE FACTS OF THIS MATTER IS SET FORTH IN THE PARTIES' PLEADINGS AND BRIEFING. PLEASE SEE PARAGRAPH 49 BELOW FOR MORE INFORMATION ABOUT HOW AND WHERE TO LOCATE THOSE DOCUMENTS.

4. The Action is a derivative action brought by Plaintiffs on behalf of Charter. The Action challenges certain transactions announced on May 26, 2015;

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1. 1. On May 26, 2015, Charter announced that it had agreed to (i) acquire
      Time Warner Cable Inc. ("TWC") in a cash-and-stock merger (the "TWC Acquisition") and (ii) acquire Bright House Networks, LLC ("Bright House") from Advance/Newhouse Partnership ("Newhouse") for cash and common and preferred units exchangeable into Charter stock (the "Bright House Acquisition");
   2. In connection with the TWC Acquisition, Charter and Broadband entered into an Investment Agreement, dated May 23, 2015, pursuant to which Broadband agreed to purchase $4.3 billion of newly issued shares from Charter based on an equivalent of $176.95 per share, conditioned on the closing of the TWC
      Acquisition (the "TWC Broadband Issuance"). Broadband, Liberty Interactive Corporation, Charter, CCH I, LLC, and Nina Corporation I, Inc., also entered into a Contribution Agreement, dated as of May 23, 2015, pursuant to which, in connection with the TWC Acquisition, Broadband and Liberty Interactive would receive 1.106 shares of Charter common stock for each of their TWC shares in place of the stock and cash merger consideration they otherwise would have been entitled to for their
      TWC shares (the "Contribution Agreement");
   3. In connection with the Bright House Acquisition, Charter, Broadband, and Newhouse entered into a new stockholders agreement that provided for (i)
      Broadband's purchase of $700 million of newly issued shares from Charter based on an equivalent of $173 per share, contingent upon the closing of the Bright House
      Acquisition (the "Bright House Broadband Issuance" and, together with the TWC Broadband Issuance, the "Broadband Issuances"); (ii) a five-year voting proxy granted by Newhouse to Broadband for approximately 6% (and up to 7%) of the vote of the pro forma company (the "Voting Proxy"), subject to certain restrictions preventing Broadband from voting the proxy shares on certain specified matters;
2. preemptive and top-up rights for Broadband and Newhouse to allow them to maintain their respective pro rata equity stakes in Charter under certain circumstances, including the right, in connection with future acquisitions, to pay the effective price used to value any stock issued by Charter as consideration; (iv) a cap on Newhouse's voting power providing that Newhouse's voting power was limited to 23.5%, increased one-for-one to a maximum of 35% for each permanent reduction in Broadband's equity interest in Charter; (v) a new cap on Broadband's voting power providing that Broadband's voting power was limited to the greater of (a)
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   25.01% (or 0.01% above the greatest voting interest of any other stockholder or group of stockholders), and (b) 23.5%, increased one-for-one to a maximum of 35% for each permanent reduction in Newhouse's equity interest in Charter below 15%;

1. a change in the cap on Broadband's equity interest in Charter from 35% until

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January 8, 2016 and 39.99% thereafter to the greater of 26% and the cap on Broadband's voting power; (vii) an increase in the number of directors on Charter's Board of Directors (the "Board") from 11 to 13 and a reduction in the number of directors that Broadband could designate to Charter's Board; (viii) a new restriction in which affiliate transactions with Broadband or Newhouse require the approval of a majority of Charter's unaffiliated directors and a majority of the directors designated by Newhouse (in the case of transactions with Broadband) or designated by Broadband (in the case of transactions with Newhouse); and (ix) new restrictions on Broadband's ability to transfer its Charter stock;

1. In this Action, Plaintiffs challenged the fairness of the Broadband Issuances, the Contribution Agreement, and the governance consideration provided to Broadband, including the preemptive rights and the Voting Proxy (together, the
   "Challenged Broadband Transactions"). Plaintiffs asserted claims for breach of fiduciary duty against the Director Defendants and a claim against Broadband for aiding-and-abetting those alleged breaches;
2. On August 21, 2015, Plaintiff Sciabacucchi filed his initial complaint;
3. On August 24, 2015, Sciabacucchi served his First Requests for Production of Documents on all Defendants;
4. On April 22, 2016, Sciabacucchi filed an amended complaint;
5. After briefing and oral argument, in separate orders dated May 31, 2017 and July 26, 2018, the Court granted in part and denied in part Defendants' motions to dismiss the first amended complaint. The Court granted the motions to dismiss as to Sciabacucchi's direct claims against the Director Defendants and all of his claims against Broadband but denied the motions to dismiss as to Sciabacucchi's derivative claims against the Director Defendants. The Court also granted Defendants' motions to dismiss as to claims predicated on the theory that John Malone and Broadband were controlling stockholders of Charter;
6. On July 30, 2018, Sciabacucchi served his Second Requests for Production on all Defendants;
7. Over the course of the next year, Sciabacucchi served third-party subpoenas, including on Broadband (at the time, a non-party), Newhouse, Allen & Company LLC, Barnes & Noble, Inc., Centerview Partners LLC, Citigroup Global Markets Inc., Comcast Corporation, Discovery, Inc., Expedia Group, Inc., Goldman

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