Filed On 4/30/02 · SEC File 1-16183 · Accession Number 950172-2-858
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
4/30/02 NTL Europe Inc 10-K/A 12/31/01 3:34 Skadden Arps Sla..LLP/FA
Document/Exhibit Description Pages Size
1: 10-K/A Amendment to Annual Report 16± 90K
2: EX-10 Exhibit 10.1 - Employment Agreement 8± 42K
3: EX-10 Exhibit 10.2 - Employment Agreement 10± 47K
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
Amendment No. 1
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2001
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file no. 0-30673
---------------
NTL INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 13-4105887
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 East 59th Street, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 906-8440
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $.01 per share
(Title of class)
Securities registered pursuant to Section 12(g) of the Act:
None
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 |X| No |_|
Indicate by check mark whether disclosure by delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. No |X|
The aggregate market value of the Registrant's voting stock held by
non-affiliates at March 26, 2002, the last day before suspension of trading
on the NYSE of the Registrant's common stock, valued in all cases in
accordance with the New York Stock Exchange closing sale price for the
Registrant's common stock on such date, was approximately $44,114,400.
Number of shares of common stock outstanding as at March 26, 2002:
276,626,476
==============================================================================
NTL Incorporated (the "Company" or "NTL") is amending its Form
10-K for the fiscal year ended December 31, 2001 to include Part III.
PART III
Item 10. Directors and Officers of the Registrant
The following table provides information about the Company's
directors and executive officers.
[Enlarge/Download Table]
Name Age Title
---- --- -----
George S. Blumenthal 58 Chairman of the Board
Barclay Knapp 45 President and Chief Executive Officer
Eric Bouvier 48 Director
Robert T. Goad 47 Director
Bernard Izerable 45 Director
Sidney R. Knafel 71 Director
Ted H. McCourtney 63 Director
Alan J. Patricof 67 Director
Warren Potash 70 Director
Jean-Louis Vinciguerra 58 Director
Michael S. Willner 50 Director
Richard J. Lubasch 55 Executive Vice President, General Counsel and Secretary
John F. Gregg 37 Chief Financial Officer and Senior Vice President
Stephen A. Carter 38 Senior Vice President and Chief Operating Officer for UK and Ireland
Operations
Bruno Claude 44 Senior Vice President and Chief Operating Officer for NTL Europe
Gregg N. Gorelick 43 Vice President - Controller
Bret Richter 32 Vice President - Corporate Finance and Development
Steven L. Wagner 50 Managing Director - Consumer Services for NTL Europe
George S. Blumenthal has been Chairman, Treasurer and a director
of the Company since its formation. Mr. Blumenthal was also Chief Executive
Officer of the Company until October 1996. Mr. Blumenthal was President of
Blumenthal Securities, Inc. (and its predecessors), a member firm of the
New York Stock Exchange, from 1967 until 1992. Mr. Blumenthal was Chairman,
Treasurer and a director of Cellular Communications, Inc. ("CCI"), which
positions he held since CCI's founding in 1981 until its merger in August
1996 into a subsidiary of AirTouch Communications, Inc. (the "CCI Merger").
Mr. Blumenthal was also Chairman, Treasurer and a director of Cellular
Communications of Puerto Rico, Inc. until the Company's sale in August
1999. Mr. Blumenthal is also Chairman Emeritus and a director of CoreComm
Limited ("CoreComm") and is a director of Sotheby's Holdings, Inc.
Barclay Knapp is President, Chief Executive Officer and a director
of the Company and has held these positions since its formation with the
exception that Mr. Knapp was Chief Operating Officer until October 1996
when he was appointed Chief Executive Officer. In addition, Mr. Knapp was
Executive Vice President and Chief Operating Officer of Cellular
Communications International, Inc. ("CCII") until June 1998. Mr. Knapp was
also President, Chief Executive Officer and a director of Cellular
Communications of Puerto Rico, Inc. ("CCPR") until its sale in August 1999,
with the exception that Mr. Knapp was Chief Operating Officer until March
1998 when he was appointed Chief Executive Officer, and is also Chairman
and a director of CoreComm. Mr. Knapp is also a director of
Bredbandsbolaget, a Swedish company in which NTL holds a 34% interest and
is also a director of Cablecom, a Swiss company in which NTL holds 100%
interest.
Eric Bouvier has been a director of the Company since January
2002. Mr. Bouvier is the Senior Vice President, Head of Mergers and
Acquisitions of France Telecom. Mr. Bouvier joined France Telecom in 1999,
to head the Mergers and Acquisitions group, under the authority of the
Executive Senior Vice President and Chief Financial Officer. Prior to
working at France Telecom Mr. Bouvier was employed at Banque Indosuez. Mr.
Bouvier occupied successively different positions at Banque Indosuez,
culminating at the position of Partner of Financiere Indosuez, the
investment and M&A advisory services subsidiary of Banque Indosuez. Mr.
Bouvier is also member of the Supervisory Board of Mobilcom in Germany, and
of TPSA in Poland.
Robert T. Goad has been a director of the Company since March
1999. Mr. Goad was a director and the Chief Executive Officer of Diamond
Cable Communications Plc from May 1994 to March 8, 1999, and served as
Chief Financial Officer from May 1994 until July 1995. Mr. Goad is a
founder of and principal in ECE Management International, LLC and has been
President of Columbia Management, Inc. since 1984. Mr. Goad is also a
director of B/G Communications, LLC, B/G Enterprises, LLC, B/G Properties,
LLC, Diveo Broadband Networks, Inc. and Grupo Clarin, S.A.
Bernard Izerable has been a director of the Company since May
2000. Mr. Izerable has been International Executive Vice President of
France Telecom since January 2000. From March 1996 until December 1999 Mr.
Izerable was Senior Vice President for Europe within France Telecom's
International Development Division. Prior to March 1996, Mr. Izerable
served in various positions at France Telecom since 1982, other than from
1989 to 1991 when Mr. Izerable worked in the Strategic Planning and Market
Analysis Division of Nynex (USA) as part of a two year exchange program
between the two companies.
Sidney R. Knafel, a director of the Company since its formation,
has been Managing Partner of SRK Management Company, a private investment
company, since 1981. In addition, Mr. Knafel is Chairman of Insight
Communications, Inc. and BioReliance Corporation. Mr. Knafel is also a
director of General American Investors Company, Inc., IGENE Biotechnology,
Inc. and some privately owned companies.
Ted H. McCourtney, a director of the Company since its formation,
retired on June 30, 2000 as a General Partner of Venrock Associates, a
venture capital investment partnership, a position he held since 1970. Mr.
McCourtney also serves as a director of CareMark RX, Inc., and Visual
Networks, Inc.
Alan J. Patricof has been a director of the Company since its
formation. Mr. Patricof is Chairman of APAX Partners, formerly known as
Patricof & Co. Ventures, Inc., a venture capital firm he founded in 1969.
Mr. Patricof serves as a director of CoreComm and Boston Properties, Inc.,
which are publicly held, and Johnny Rockets Group, Inc., which is a
privately held company.
Warren Potash has been a director of the Company since its
formation. Mr. Potash retired in 1991 as President and Chief Executive
Officer of the Radio Advertising Bureau, a trade association, a position he
held since February 1989. Prior to that time and beginning in 1986, he was
President of New Age Communications, Inc., a communications consultancy
firm. Until his retirement in 1986, Mr. Potash was a Vice President of
Capital Cities/ABC Broadcasting, Inc., a position he held since 1970. Mr.
Potash is also a director of CoreComm.
Jean-Louis Vinciguerra has been a director of the Company since
August 1999. Mr. Vinciguerra was an executive officer of BZW from 1995
until 1996 and served as the representative to Asia for Credit Agricole
Indosuez from 1997 until 1998. He has been Senior Executive Vice President
and Chief Financial Officer of France Telecom since 1998.
Michael S. Willner, a director of the Company since October 1993,
is President, CEO, and a Director of Insight Communications, Inc., the
eighth largest cable company in the U.S. He also is a director of C-SPAN
and CableLabs, and is the Chairman and member of the executive committee of
the board of directors of the National Cable Television Association.
Richard J. Lubasch is the Company's Executive Vice President --
General Counsel and Secretary, and has been the Company's Senior Vice
President -- General Counsel and Secretary since its formation. Mr. Lubasch
was also Senior Vice President -- General Counsel and Secretary of CCPR
prior to its sale in August 1999. Mr. Lubasch also held these titles, as
well as Treasurer, at CCII prior to its sale in March 1999.
John F. Gregg has been the Company's Chief Financial Officer and
Senior Vice President since June 1999. Prior to June 1999, Mr. Gregg was
Vice President of Corporate Development since June of 1997. Mr. Gregg
joined the Company in 1994 as Managing Director of Corporate Development.
He is Vice Chairman and a director of Virgin Net, a joint venture between
the Company and Virgin Communications Group, a director of
Bredbandsbolaget, a Swedish company in which NTL holds a 34% interest and a
director of eKabel Hessen GmbH, a German company in which NTL holds a 32.5%
interest. Mr. Gregg is also a director of Two Way TV, an interactive
programming company. Prior to his employment by the Company, Mr. Gregg was
employed by Golder, Thoma & Cressey, a venture capital firm.
Stephen A. Carter is the Company's Senior Vice President and Chief
Operating Officer of its UK and Ireland operations. Before joining NTL in
November 2000, Mr. Carter was with J. Walter Thompson, having been
appointed Managing Director of J. Walter Thompson's London Office in 1994,
and, three years later took overall control as Chief Executive Officer of
J. Walter Thompson's UK and Ireland Group. Mr. Carter is also a
non-Executive Director of Trucost Plc and a Trustee of Raleigh
International, a registered UK charity.
Bruno Claude is the Company's Senior Vice President and the Chief
Operating Officer for NTL Europe. Prior to joining the Company in October
2000, Mr. Claude was Managing Director of CEA Capital Advisor, the
affiliate of CEA responsible for the firm's private equity activities.
Prior to this, Mr. Claude held various positions with Prime Cable, a
company operating Cable Television Systems across the United States. From
1987 to 1991, Mr. Claude was Director of Operations and in 1991, he was
appointed Managing Director of PrimeComm, a company formed by Prime Cable
to acquire interests in businesses involved in the broader
telecommunications arena.
Gregg N. Gorelick has been the Company's Vice President --
Controller since its formation. From 1981 to 1986 he was employed by Ernst
& Whinney (now known as Ernst & Young LLP). Mr. Gorelick is a certified
public accountant and was Vice President -- Controller of CCI from 1986
until the CCI Merger. He is also Senior Vice President - Controller and
Treasurer of CoreComm, and was Vice President -- Controller at CCII prior
to its sale in March 1999 and at CCPR prior to its sale in August 1999.
Bret Richter is the Company's Vice President for Corporate Finance
and Development. Mr. Richter is primarily responsible for the Company's
strategic initiatives, mergers and acquisitions, investor relations and
capital raising activities. Prior to joining NTL in September 1994, Mr.
Richter was a member of the media and telecommunications investment banking
group at Salomon Brothers, where he specialized in mergers and
acquisitions.
Steven L. Wagner is the Managing Director of Consumer Services for
NTL Europe. Mr. Wagner is responsible for managing the Company's consumer
businesses across the European continent. Prior to his current position Mr.
Wagner was the Group Managing Director for Media and Marketing for NTL UK.
Mr. Wagner joined the Company in 1994 with management responsibility for
the Company's consumer business. Mr. Wagner has spent over 15 years in consumer
and business related activities. Prior to joining the Company, Mr. Wagner
served most recently as Vice President, Eastern Region for the Walt Disney
Company's premium television network.
Executive officers of the Company are elected annually by the
Board of Directors and serve until their successors are duly elected and
qualified.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires that the Company's directors and executive
officers, and persons who beneficially own more than 10% of a registered
class of the Company's equity securities file with the SEC, and with each
exchange on which the common stock trades, initial reports of ownership and
reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than 10% beneficial owners
are required by the SEC's regulations to furnish the Company with copies of
all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies
of such reports furnished to the Company and written representations that
no other reports were required during the fiscal year ended December 31,
2001, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with.
Item 11. Executive Compensation
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
POLICY
The Compensation and Option Committee (the "Compensation
Committee") of the Board of Directors has the responsibility for the design
and implementation of the Company's executive compensation program. The
Compensation Committee is composed entirely of non-employee directors. The
current members of the Compensation Committee are Sidney R. Knafel, Ted H.
McCourtney and Jean-Louis Vinciguerra.
The Company's executive compensation program is designed to be
linked to corporate performance. To this end, the Company has developed an
overall compensation strategy and specific compensation plans that tie a
very significant portion of an executive's aggregate compensation to the
appreciation in the Company's stock price. In addition, executive bonuses
are linked to the achievement of operational goals and therefore relate to
stockholder return. The overall objective of this strategy is to attract
and retain executive talent, to motivate these executives to achieve the
goals inherent in the Company's business strategy and to link executive and
stockholder interests through equity-based compensation, thereby seeking to
enhance the Company's profitability and stockholder value.
Each year the Compensation Committee conducts a review of the
Company's executive compensation program to determine the appropriate level
and forms of compensation. Such review permits an annual evaluation of the
link between the Company's performance and its executive compensation.
In assessing compensation levels for the named executives, the
Compensation Committee recognizes the fact that certain executives have
participated in the development of the Company (and its predecessors) from
its earliest stages. In determining the annual compensation for the Chief
Executive Officer, the Compensation Committee uses the same criteria as it
does for the other named executives.
BASE SALARY AND BONUS
In furtherance of the Company's incentive-oriented compensation
goals set forth above, cash compensation (annual base salary and bonus) is
generally set below levels paid by comparable sized telecommunications
companies and is supplemented by equity-based option grants. With respect
to fiscal year 2001, the aggregate annual base salary paid by the Company
for the named executive officers increased in the aggregate by
approximately $117,000 from 2000 levels. The 2001 base salary for the Chief
Executive Officer increased $33,427 to $277,260.
STOCK OPTIONS
Under the Company's stock option plan, stock options were granted
to certain of the named executive officers during 2001. Information with
respect to such option grants to the named executive officers is set forth
in the table entitled "Option Grants in Last Fiscal Year."
Stock options are designed to align the interests of executives
with those of stockholders. The options generally are granted at an
exercise price equal to the market price of the common stock on the date of
grant and vest over a period of five years.
Accordingly, the executives are provided additional incentive to
create stockholder value over the long term since the full benefit of the
options cannot be realized unless stock price appreciation occurs over a
number of years. In determining individual option grants, the Compensation
Committee takes into consideration the number of options previously granted
to that individual, the amount of time and effort dedicated to the Company
during the preceding year and expected commitment to the Company on a
forward-looking basis. The Compensation Committee also strives to provide
each option recipient with an appropriate incentive to increase stockholder
value, taking into consideration their cash compensation levels.
In 1996, 1997 and 1999, Mr. Knapp did not receive an option grant.
In 1995, Mr. Knapp received an option to purchase 416,668 shares of common
stock with an exercise price of $14.64. In 1998, Mr. Knapp received an
option to purchase 1,484,375 shares of Common Stock with an exercise price
of $23.36. In 2000, Mr. Knapp received an option to purchase 7,250,000
shares of common stock with an exercise price of $63.63. In 2001 Mr. Knapp
received an option to purchase 5,000,000 shares of common stock with an
exercise price of $10.00. Mr. Knapp now owns 459,967 shares of common stock
and holds options to purchase an additional 16,185,250 shares.
COMPENSATION DEDUCTION CAP POLICY
In 1996, the Company's stockholders approved an amendment to the
Company's 1993 Employee Stock Option Plan (the "1993 Plan") to, among other
things, comply with the requirements regarding non-deductibility of
compensation in excess of $1 million under sec.162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"). Any compensation realized
from the exercise of such stock options granted pursuant to the 1993 Plan
at fair market value as of the date of grant thus generally would be exempt
from the deduction limitations under sec.162(m) of the Code. Compensation
realized from the exercise of stock options not granted pursuant to a plan
or granted pursuant to the Company's 1998 Non-Qualified Stock Option Plan
would not be exempt from the deduction limitation under sec.162(m) of the
Code. Other annual compensation, such as salary and bonus, is not expected
to exceed $1 million per executive.
THE COMPENSATION AND OPTION COMMITTEE
Sidney R. Knafel
Ted H. McCourtney
Jean-Louis Vinciguerra
GENERAL
The following table discloses compensation received by the Company's
Chief Executive Officer and the four other most highly paid executive
officers for the three years ended December 31, 2001.
[Enlarge/Download Table]
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Securities
Restricted Underlying
Other Annual Stock Options/ LTIP All Other
Salary Bonus Compensation Awards(s) SARs Payouts Compensation
Name and Principal Position Year ($) ($) ($) ($) (#) ($) ($)(1)
--------------------------- ---- --- --- ------ --- --- --- ------
Barclay Knapp.............. 2001 277,260 561,138 -- -- 5,000,000 -- 7,000
President and Chief 2000 243,833 249,813 -- -- 7,250,000 -- 17,200
Executive Officer 1999 273,333 262,500 -- -- -- -- 16,000
George S. Blumenthal....... 2001 277,260 561,138 -- -- 5,000,000 -- 7,000
Chairman and Treasurer 2000 243,833 249,813 -- -- 7,250,000 -- 17,200
1999 273,333 262,500 -- -- -- -- 16,000
Richard J. Lubasch......... 2001 233,692 384,875 -- -- -- -- 7,000
Executive Vice 2000 205,517 178,438 -- -- 500,000 -- 17,200
President--General 1999 235,083 187,500 -- -- 117,188 -- 16,000
Counsel and Secretary
John F. Gregg.............. 2001 240,220 591,250 -- -- -- -- 7,000
Chief Financial Officer and 2000 214,960 228,125 -- -- 1,000,000 -- 17,200
Senior Vice President 1999 201,400 187,500 -- -- 156,250 -- 16,000
Stephen A. Carter........... 2001 431,790 278,112 -- -- -- -- 6,738
Senior Vice President and 2000 60,636 -- -- -- 400,000 -- 38,384
Chief Operating Officer 1999 -- -- -- -- -- -- --
UK and Ireland operations
--------------
(1) All other compensation reflects the Company's match of employee
contributions to a 401(k) plan or in the case of Stephen Carter,
contributions to Mr. Carter's UK executive pension scheme.
OPTION GRANTS TABLE
The following table provides information on stock option grants
during 2001 to the named executive officers.
[Enlarge/Download Table]
Option Grants in Last Fiscal Year(1)
Individual Grants
-----------------
Number of
Securities % of Total Potential Realizable Value
Underlying Options at Assumed Annual Rate
Options Granted to Exercise or of Stock Price Appreciation
Granted Employees in Base Price Expiration for Option Term(3)
Name (#) Fiscal Year ($/Share) Date 5%($) 10%($)
---- --- ----------- ---------- ---- ----- ------
Barclay Knapp....................... 5,000,000(2) 38.76% 10.00 11/06/11 0 14,071,800
George G. Blumenthal................ 5,000,000(2) 38.76% 10.00 11/06/11 0 14,071,800
Richard J. Lubasch.................. -- -- -- -- -- --
John F. Gregg....................... -- -- -- -- -- --
Stephen A. Carter................... -- -- -- -- -- --
(1) Upon a change of control of the Company, all unvested options become
fully vested and exercisable.
(2) The options were granted on November 7, 2001 at an exercise price
which was more than twice as high as the closing price of the
common stock on The New York Stock Exchange on such date; 20% were
exercisable upon issuance; an additional 20% became exercisable on
January 1, 2002 and an additional 20% will become exercisable on
each of January 1, 2003, 2004 and 2005.
(3) The amounts shown in these columns are the potential realizable
value of options granted at assumed rates of stock price
appreciation (5% and 10%) specified by the SEC based on the
closing price of our common stock on the grant date which was
$4.94, and have not been discounted to reflect the present value
of such amounts. Our common stock closed at $0.20 on March 26,
2002, the last day our stock traded on the New York Stock Exchange
before suspension. The assumed rates of stock price appreciation
are not intended to forecast the future appreciation of the common
stock.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table provides information on stock option exercises during
2001 by the named executive officers and the value at December 31, 2001 of
unexercised in-the-money options held by each of the named executive
officers.
[Enlarge/Download Table]
Aggregated Option Exercises in Last Fiscal Year-End and Fiscal Year-End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares FY-End(#) FY-End($)*
Acquired on Value Exercisable(E)/ Exercisable(E)/
Name Exercise(#) Realized($) Unexercisable(U) Unexercisable(U)
---- ----------- ----------- ---------------- ----------------
Barclay Knapp............................... 91,020 747,411 4,769,625(E) 0 (E)
11,415,625(U) 0 (U)
George S. Blumenthal........................ 156,248 184,807 4,345,481(E) 0 (E)
11,415,625(U) 0 (U)
Richard J. Lubasch.......................... -- -- 816,352(E) 0 (E)
498,438(U) 0 (U)
John F. Gregg............................... -- -- 752,084(E) 0 (E)
1,143,750(U) 0 (U)
Stephen A. Carter........................... -- -- 240,000(E) 0 (E)
160,000(U) 0 (U)
------------
o Based on the closing price on the NYSE on December 31, 2001 of $0.94,
there were no in-the-money options.
COMPENSATION OF DIRECTORS
Our non-employee directors are paid $500 for each general meeting
and committee meeting they attend. We reimburse our non-employee directors
for their out-of-pocket costs associated with attending.
EMPLOYMENT CONTRACTS
None of our Chief Executive Officer or named executive officers
are party to employment contracts with the Company other than Stephen A. Carter.
Mr. Carter and the Company entered into an employment agreement on December 6,
2000 for an initial term of two years, which will be extended for successive
12 month terms unless notice is given by either the Company or Mr. Carter at
least 12 months prior to the end of the initial term or the extended term, as
the case may be. The agreement entitles Mr. Carter to a base salary of UK
300,000 per year and variable compensation of between UK 150,000 and UK 300,000
per year, subject to increase at the discretion of the Company's compensation
committee. The agreement also provided for an initial award of 400,000 stock
options, exercisable at the market price on the date of the grant, under the
Company's stock option plan and provides for additional grants of 50,000 share
options, under the Company's then existing stock option plan, at the
commencement of the second year of the initial term and the commencement of any
extended terms. Pursuant to the employment agreement, Mr. Carter is subject to
standard non-competition, non-solicitation and confidentiality provisions.
PERFORMANCE GRAPH
The following graph compares the cumulative return on the common
stock with the Nasdaq Stock Market (U.S.) Index (the "Nasdaq (U.S.)
Index"), the Center for Research in Security Prices Index of Nasdaq
Telecommunications Stocks (the "CRSP Index") and the Peer Group Index. In
the Company's view, the Peer Group Index, which includes British Telecom
plc, Cable and Wireless plc, Telewest Communications plc and United
Pan-Europe Communications N.V. provides a better representation of the
performance of telecommunications companies over the required period than
the broader based CRSP Index.
On October 27, 2000, the Company ceased trading on the Nasdaq and
began trading on the New York Stock Exchange. The Company's common stock
closed at $0.20 on March 26, 2002 the last day the stock was traded on the
NYSE before it was suspended from the NYSE pending delisting.
The graph assumes that $100 was invested on December 31, 1996.
Comparison of NTL Incorporated, the Peer Group Index,
the CRSP Index and the Nasdaq (U.S.) Index
[Enlarge/Download Table]
29-Dec-96 31-Dec-97 31-Dec-98 31-Dec-99 31-Dec-00 31-Dec-01
Nasdaq (U.S.) Index 100.00 121.64 169.84 315.20 191.36 151.07
CRSP Index 100.00 142.00 232.00 470.29 214.64 109.60
NTL Incorporated 100.00 110.40 223.51 617.57 148.13 5.82
The Peer Group Index 100.00 109.03 201.61 311.00 141.52 65.67
--------------------
Note: Stock price performance shown above for the common stock is
historical and not necessarily indicative of future price performance.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
beneficial ownership of the common stock of the Company, as of April 26,
2002 by (i) each executive officer and director of the Company, (ii) all
directors and executive officers as a group and (iii) shareholders holding
5% or more of the common stock.
[Enlarge/Download Table]
Amount and Nature of Beneficial Ownership
---------------------------------------------------------
Presently
Exercisable
Options
Warrants,
Convertible
Bonds and
Common Exchangeable Current Percentage
Name of Beneficial Owner Stock Preferred (1) Total Of Class(2)
------------------------------------------------- ----------------------------------------------------------
Barclay Knapp 459,967 7,154,000 7,613,967 2.68%
George S. Blumenthal (3) 269,465 6,729,856 6,999,321 2.47%
Richard J. Lubasch (4) 61,249 816,352 877,601 *
Stephen A. Carter 0 240,000 240,000 *
John F. Gregg (5) 1,250 979,635 980,885 *
Gregg N. Gorelick 85,154 188,065 273,219 *
Bret Richter 291 253,387 253,678 *
Steven L. Wagner 0 474,066 474,066 *
Bruno J. Claude 0 225,000 225,000 *
-----------------------------------------------------------
Executive 877,376 16,835,361 17,712,737 6.03%
Officers
Robert T. Goad (6) 1,638,685 150,000 1,788,685 *
Sidney R. Knafel (7) 2,086,042 320,485 2,406,527 *
Ted H. McCourtney (8) 23,993 320,485 344,478 *
Alan J. Patricof (9) 11,263 320,485 331,748 *
Warren Potash (10) 42,170 251,036 293,206 *
Michael S. Willner (11) 694,201 292,449 986,650 *
-----------------------------------------------------------
NTL Directors 4,496,354 727,750 5,224,104 1.87%
Directors and Officers as a group 5,373,730 17,563,111 22,936,841 7.81%
France Telecom S.A. (12) 50,680,752 39,058,641 89,739,393 28.43%
Capital Research and Management Company (13) 32,135,130 0 32,135,130 11.62%
Cable & Wireless plc (14) 28,110,413 0 28,110,413 10.16%
Verizon Communications, Inc. (15) 24,469,861 0 24,469,861 8.85%
AXA Assurances I.A.R.D. Mutuelle (16) 22,405,118 641,412 23,046,530 8.31%
* Represents less than one percent
(1) Includes shares of NTL common stock purchased upon the exercise of
options which are exercisable or become so in the next 60 days
("Presently Exercisable Options"), shares of NTL common stock
issuable upon the conversion of the 7% Convertible Subordinated Notes
due 2008 or 5.75% Convertible Subordinated Notes due 2009 (the
"Convertible Bonds") and shares of common stock issuable upon the
exchange of the Senior Redeemable Exchangeable Preferred Stock which
are exchangeable or become so in the next 60 days (the "Exchangeable
Preferred"). Of the options, warrants, Convertible bonds and
exchangeable preferred shown in the table above: (a) 610,309 options
were assumed by NTL in 1993, having a weighted average exercise price
of $1.08 per share; and (b) 12,163,088 options are employee and
non-employee director options that have been issued by NTL under the
1993 Employee Stock Option Plan, the 1993 Non-Employee Director Stock
Option Plan, the 1998 Non-Qualified Stock Option Plan or certain
other stock option agreements, having a weighted average exercise
price of $16.82 per share.
(2) Includes common stock, Presently Exercisable Options, warrants,
Convertible Bonds and Exchangeable Preferred.
(3) Includes 3,299 shares of common stock owned by trusts for the benefit
of Mr. Blumenthal's children and also includes 152,092 shares of
common stock held by George S. Blumenthal's 1998 Annuity Trust. Also
includes 465,878 options held in Grantor Retained Annuity Trusts.
(4) Includes 174 shares of common stock owned by Mr. Lubasch as custodian
for his child, as to which shares Mr. Lubasch disclaims beneficial
ownership.
(5) Mr. Gregg owns $100,000 of the 7% Convertible Subordinated Notes due
2008, convertible into 2,551 shares of common stock.
(6) Mr. Goad personally owns 30,249 shares of common stock. The remainder
are owned by Columbia Management, Inc., Mr. Goad's wholly-owned
Investment Company.
(7) Includes 25,958 shares of common stock owned by Insight
Communications UK, Inc., Mr. Knafel's wholly-owned Investment
Company. Also includes 73,363 shares of common stock owned by a
foundation of which Mr. Knafel is President, as to which shares Mr.
Knafel disclaims beneficial ownership.
(8) An additional 872 shares of common stock are held by trusts for the
benefit of Mr. McCourtney's children, as to which Shares Mr.
McCourtney disclaims beneficial ownership.
(9) Includes 499 shares of common stock owned by Mr. Patricof's wife, as
to which shares Mr. Patricof disclaims beneficial Ownership.
(10) Mr. Potash owns $500,000 of the 7% Convertible Subordinated Notes due
2008, convertible into 12,755 shares of common stock.
(11) Includes 138,579 shares of common stock held by trust accounts for
the benefit of Mr. Willner's children, as to which Shares Mr. Willner
disclaims beneficial ownership.
(12) Based upon Schedule 13D/A (Amendment No. 9), dated April 26, 2002,
filed by France Telecom S.A. and Compagnie Generale des
Communications (COGECOM) S.A. with the Securities and Exchange
Commission (the "SEC").
(13) Based soley upon Schedule 13G (Amendment No. 4), dated February 11,
2002, filed by Capital Research and Management Company with the
Securities and Exchange Commission (the "SEC").
(14) Based upon Schedule 13-G (Amendment No. 1), dated February 14, 2002,
filed by Cable and Wireless plc, with the Securities and Exchange
Commission (the "SEC").
(15) Based solely upon Schedule 13-G filed on April 9, 2001, by Verizon
Communications, Inc., Bell Atlantic Worldwide Services Group, Inc.,
Bell Atlantic Network Systems Company, and NYNEX Corporation with the
Securities and Exchange Commission (the "SEC").
(16) Based solely upon Schedule 13-G (Amendment No. 3), dated February 12,
2002, filed by AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie
Mutuelle, AXA Conseil Vie Assurance Mutuelle, AXA Courtage Assurance
Mutuelle, AXA and AXA Financial, Inc. with the Securities and
Exchange Commission (the "SEC").
Item 13. Certain Relationships and Related Transactions
In the fourth quarter of 1999, CoreComm Limited ("CoreComm")
(which was formed in 1998) began charging the Company a percentage of its
office rent and supplies expense in respect of certain facilities which
were shared with the Company.
In 2001, the Company charged CoreComm $0.3 million for direct
costs where identifiable and a fixed percentage of its corporate overhead,
net of CoreComm's charges to the Company. These charges reduced corporate
expenses in 2001. It is not practicable to determine the amounts of these
expenses that would have been incurred had the Company operated as an
unaffiliated entity. In the opinion of management of the Company, the
allocation methods are reasonable.
The Company obtains billing and software development services from
CoreComm. CoreComm billed the Company $3.4 in 2001for these services.
In March 2000, the Company and CoreComm announced that they had
entered into an agreement to link their networks in order to create an
international Internet backbone that commenced operations in February 2001.
The Company incurred costs of $0.3 million for network usage in the year
ended December 31, 2001.
On April 12, 2001, the Company purchased $15.0 million of an
unsecured convertible note from CoreComm and received warrants to purchase
770,000 shares of CoreComm common stock at an exercise price of $.01 per
share that expire in April 2011.
Barclay Knapp and Gregg Gorelick are executive officers of both
the Company and CoreComm. In addition, Barclay Knapp, Warren Potash, George
Blumenthal and Alan Patricof are directors of the Company and CoreComm. In
the light of this relationship, the independent directors of the Company
examined the transaction with CoreComm and the Board of Directors of the
Company determined that the transaction was inherently fair to the Company
and provided the Company with benefits that exceeded those that could be
obtained from a third party.
Interest on the notes is at 10.75% per annum, payable semiannually
beginning on October 15, 2001. The interest is payable in kind by the
issuance of additional notes in such principal amount equal to the interest
payment that is then due. The notes are convertible into CoreComm common
stock prior to maturity at a conversion price of $1.00 per share, subject
to adjustment. Additional notes issued for interest will have an initial
conversion price equal to 120% of the weighted average closing price of
CoreComm common stock for a specified period. The Company and CoreComm have
agreed to certain modifications to the conversion feature in connection
with CoreComm's recapitalization in December 2001.
In 2001, the Company and CoreComm entered into a license agreement
whereby the Company was granted an exclusive, irrevocable, perpetual
license to certain billing software developed by CoreComm for telephony
rating, digital television events rating, fraud management and other tasks.
The sales price was cash of $9.8 million for the development costs expended
by CoreComm plus a fixed amount of $3.0 million representing the one-time
perpetual license fee. The billing software was being used by the Company
at the time of this agreement, and was being maintained and modified by
CoreComm under an ongoing software maintenance and development outsourcing
arrangement between the companies.
At December 31, 2001 and December 31, 2000, the Company had a
receivable from CoreComm of $1.1 million and a payable to CoreComm of $17.1
million, respectively. The 2000 payable balance primarily related to
services and other charges billed in advance in October and November 2000
of $15.8 million.
On November 1, 2001, we announced that we had entered into an
agreement dated September 28, 2001, with Orange plc for the provision of a
new mobile phone service, for NTL's existing and prospective residential
customers across the UK. France Telecom, one of our principal holders of
common stock and a holder of our 5% cumulative preferred stock, acquired
Orange plc in August 2001. Prior to France Telecom's acquisition, our
broadcast division provided Orange with sight leasing services and
continues to do so.
Item 14. Exhibits
Exhibit Description
------- -----------
10.1 Employment Agreement, dated December
6, 2000 between NTL Incorporated and
Stephen Carter
10.2 Employment Agreement, dated October
16, 2000, between NTL Incorporated and
Bruno Claude
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the under signed thereunto duly authorized.
Dated: April 30, 2002
NTL INCORPORATED
/s/ Barclay Knapp
----------------------------
By: Barclay Knapp
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit Description
------- -----------
10.1 Employment Agreement, dated December
6, 2000 between NTL Incorporated and
Stephen Carter
10.2 Employment Agreement, dated October
16, 2000, between NTL Incorporated and
Bruno Claude
Dates Referenced Herein and Documents Incorporated By Reference
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