<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
CORECOMM LIMITED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[CORECOMM LOGO]
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
------------------------
PROXY STATEMENT AND
NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 3, 1999
------------------------
The Annual Meeting of Stockholders of CoreComm Limited (the "Company") will
be held at 10:45 a.m., local time, on Thursday, June 3, 1999, at the Essex
House, Hyde Park Suite, located at 160 Central Park South, New York, New York
10019, for the following purposes:
1. To ratify the appointment by the Board of Directors of Ernst & Young LLP
as independent auditors for the year ending December 31, 1999; and
2. To transact any other business that may properly be brought before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 14, 1999 as
the record date for the determination of the stockholders entitled to notice of
and to vote at the meeting. Accordingly, only stockholders of record at the
close of business on that date will be entitled to vote at the meeting. The
transfer books will not be closed. A list of the stockholders entitled to vote
at the meeting will be located at the Company's offices, 110 East 59th Street,
New York, New York 10022, at least ten days prior to the meeting and will also
be available for inspection at the meeting.
A copy of the Annual Report for 1998 is being mailed together with this
proxy material.
It is important that your shares be represented at the meeting. Regardless
of whether you plan to attend the meeting, please execute the enclosed proxy and
return it promptly in the accompanying postage-paid envelope. Submitting this
executed proxy will not preclude your right to revoke it and to vote in person
at the meeting.
By order of the Board of Directors,
/s/ Richard J. Lubasch
RICHARD J. LUBASCH
Secretary
New York, New York
April 28, 1999
<PAGE> 3
CORECOMM LIMITED
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
------------------------
ANNUAL MEETING OF STOCKHOLDERS
JUNE 3, 1999
------------------------
PROXY STATEMENT
This proxy statement sets forth certain information with respect to the
accompanying proxy proposed to be used at the Annual Meeting of Stockholders of
CoreComm Limited (the "Company" or "CoreComm") to be held at 10:45 a.m., local
time, on Thursday, June 3, 1999, at the Essex House, Hyde Park Suite, located at
160 Central Park South, New York, New York 10019, or at any adjournment or
postponement thereof (the "Annual Meeting"), for the purposes set forth in the
accompanying Notice of Annual Meeting. The Board of Directors of the Company is
soliciting the accompanying form of proxy and urges you to sign the proxy, fill
in the date, and return it immediately to the Secretary of the Company. The
prompt cooperation of stockholders is necessary in order to ensure a quorum and
to avoid expenses and delay.
Holders of record of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), at the close of business on April 14, 1999, will be
entitled to vote at the Annual Meeting. At the close of business on April 14,
1999, 13,242,699 shares of Common Stock were outstanding and entitled to vote at
the Annual Meeting. Each share of Common Stock is entitled to one vote.
The accompanying proxy is revocable on written instructions, including a
subsequently received proxy, signed in the same manner as the proxy, and
received by the Secretary of the Company at any time at or before the balloting
on the matter with respect to which such proxy is to be exercised. If you attend
the Annual Meeting you may, if you wish, revoke your proxy by voting in person.
This proxy statement and the accompanying proxy materials are first being mailed
to stockholders on or about April 28, 1999.
All expenses of soliciting proxies, including clerical work, printing and
postage, will be paid by the Company. Proxies may be solicited personally, or by
mail, telephone or facsimile, by current and former directors, officers and
other employees of the Company, but the Company will not pay any compensation
for such solicitations. In addition, the Company has agreed to pay D.F. King &
Co., Inc. a fee of $4,000, plus reasonable expenses, for proxy solicitation
services. The Company will also reimburse brokers and other persons holding
shares in their names or in the names of nominees for their expenses for sending
material to principals and obtaining their proxies.
<PAGE> 4
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock, as of April 20, 1999, by (i) each executive
officer and director of the Company, (ii) all directors and executive officers
as a group and (iii) stockholders holding 5% or more of the Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-------------------------------------------------
PRESENTLY
EXERCISABLE
EXECUTIVE OFFICERS, DIRECTORS COMPANY OPTIONS AND
AND PRINCIPAL STOCKHOLDERS STOCK WARRANTS(1) TOTAL PERCENT(2)
- ----------------------------- --------- ------------ --------- ----------
<S> <C> <C> <C> <C>
J. Barclay Knapp................................ 9,198 926,478 935,676 6.60%
George S. Blumenthal(3)......................... 175,449 846,813 1,022,262 7.26%
Richard J. Lubasch.............................. 3,282 201,685 204,967 1.52%
Patty J. Flynt.................................. -- 18,250 18,250 *
Gregg Gorelick.................................. 18,837 52,404 71,241 *
Del Mintz....................................... 335,286 92,823 428,109 3.21%
Sidney R. Knafel................................ 98,800 92,823 191,623 1.44%
Ted H. McCourtney(4)............................ 284,355 60,323 344,678 2.59%
Alan J. Patricof(5)............................. 13,236 92,823 106,059 *
Warren Potash................................... 542 63,219 63,761 *
All directors and officers as a group (10 in
number)....................................... 938,985 2,447,641 3,386,626 21.58%
Ronald Baron(6)................................. 2,386,400 2,386,400 18.02%
Baron Capital Group, Inc.(6)
Bamco, Inc.(6)
Baron Capital Management, Inc.(6)
Baron Asset Fund(6)
767 Fifth Avenue
New York, NY 10153
Snyder Capital Management, L.P.(7).............. 1,977,562 1,977,562 14.93%
Snyder Capital Management, Inc.(7)
350 California Street, Suite 1460
San Francisco, CA 94104
NWQ Investment Management Company(8)............ 884,488 884,488 6.68%
2049 Century Park East, 4th Floor
Los Angeles, CA 90067
Wallace R. Weitz & Company(9)................... 852,300 852,300 6.44%
1125 South 103rd Street, Suite 600
Omaha, NE 68124-6008
Georgica Advisors LLC(10)....................... 797,130 797,130 6.02%
Richard Reiss, Jr.(10)
1114 Avenue of the Americas
New York, NY 10036
J. David Wargo(11).............................. 686,200 686,200 5.18%
712 Fifth Avenue
41st Floor
New York, NY 10019
</TABLE>
(footnotes continued on following page)
2
<PAGE> 5
- ---------------
* Represents less than one percent.
(1) Includes shares of Common Stock purchased upon the exercise of options
which are exercisable or become so in the next 60 days ("Presently
Exercisable Options") and shares of Common Stock purchased upon the
exercise of warrants.
(2) Includes Common Stock and Presently Exercisable Options and Warrants.
(3) Includes 1,980 shares of Common Stock owned by trusts for the benefit of
Mr. Blumenthal's children and 120,000 shares of Common Stock and 186,778
warrants held by a Grantor Retained Annuity Trust. An additional 3,000
shares of Common Stock are owned by Mr. Blumenthal's wife, as to which
shares Mr. Blumenthal disclaims beneficial ownership.
(4) Includes 274,000 shares of Common Stock held by various entities of which
Mr. McCourtney is a general partner, as to which shares Mr. McCourtney
disclaims beneficial ownership except to the extent of his pro-rata
interest. An additional 520 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.
(5) Includes 1,065 shares of Common Stock owned by Mr. Patricof's wife, as to
which shares Mr. Patricof disclaims beneficial ownership. An additional
2,500 shares of Common Stock are owned by the Patricof & Co. Ventures
Profit Sharing Plan. Mr. Patricof is a trustee of the Plan and disclaims
beneficial ownership of such securities other than the amount allocable to
his beneficial interest in the plan.
(6) Based solely upon Schedule 13-G (Amendment No. 1), dated February 8, 1999,
filed by Ronald Baron, Baron Capital Group, Inc., Bamco, Inc., Baron
Capital Management, Inc. and Baron Asset Fund with the Securities and
Exchange Commission (the "SEC").
(7) Based solely upon Schedule 13-G, dated February 8, 1999, filed by Snyder
Capital Management, L.P. and Snyder Capital Management, Inc. with the SEC.
(8) Based solely upon Schedule 13-G, dated February 16, 1999, filed by NWQ
Investment Management Company with the SEC.
(9) Based solely upon Schedule 13-G, dated February 9, 1999, filed by Wallace
R. Weiss & Company with the SEC.
(10) Based solely upon Schedule 13-G, dated December 4, 1998, filed by Georgica
Advisors LLC and Richard Reiss, Jr. with the SEC.
(11) Based solely upon Schedule 13-G, dated March 17, 1999, filed by J. David
Wargo with the SEC.
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 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, 1998, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with.
3
<PAGE> 6
CORECOMM'S MANAGEMENT
DIRECTORS
The CoreComm Board of Directors consists of the seven persons listed below,
each of whom were elected for a term expiring at the annual meeting of
stockholders indicated below.
<TABLE>
<CAPTION>
TERM EXPIRES
AT ANNUAL
NAME AGE MEETING IN
- ---- --- ------------
<S> <C> <C>
Alan J. Patricof............................................ 64 2001
Warren Potash............................................... 67 2001
Sidney R. Knafel............................................ 68 2002
Ted H. McCourtney........................................... 60 2002
Del Mintz................................................... 71 2002
George S. Blumenthal........................................ 55 2000
J. Barclay Knapp............................................ 42 2000
</TABLE>
SINCE NO DIRECTOR'S TERM EXPIRES IN 1999, THE MATTER OF ELECTING A DIRECTOR
WILL NOT BE ON THE AGENDA FOR THIS YEAR'S ANNUAL MEETING.
Set forth below is a brief description of the present and past business
experience of each of the persons who serve as directors of the Company:
Alan J. Patricof has been a director of CoreComm since March 18, 1998. Mr.
Patricof is Co-Chairman of Patricof & Co. Ventures, Inc., a venture capital firm
he founded in 1969. Mr. Patricof was a director of Cellular Communications
International, Inc. ("CCII") from July 1991 until its sale in March 1999 (the
"CCII Sale") and has been a director of Cellular Communications of Puerto Rico,
Inc. ("CCPR") since February 1992. Additionally, Mr. Patricof has been a
director of NTL Incorporated ("NTL") since its formation and is a director of
other privately owned companies.
Warren Potash has been a director of CoreComm since March 18, 1998. Mr.
Potash retired in 1991 as President and Chief Executive Officer of the Radio
Advertising Bureau, a trade association, a position he held since 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 was also a director of CCII from July 1991 until
the CCII Sale, and has been a director of CCPR since February 1992 and of NTL
since its formation.
Sidney R. Knafel has been a director of CoreComm since March 18, 1998. Mr.
Knafel has also been Managing Partner of SRK Management Company, a private
investment concern, 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, was a director of CCII from July 1991 until the CCII
Sale, and has been a director of CCPR since February 1992 and of NTL since its
formation.
Ted H. McCourtney has been a director of CoreComm since March 18, 1998. Mr.
McCourtney is a General Partner of Venrock Associates, a venture capital
investment partnership, a position he has held since 1970. Mr. McCourtney also
has been a director of NTL since its formation and serves as a director of
Medpartners Inc., Visual Networks, Inc. and several privately owned companies.
Del Mintz has been a director of CoreComm since March 18, 1998. Mr. Mintz
is President of Cleveland Mobile Tele Trak, Inc., Cleveland Mobile Radio Sales,
Inc. and Ohio Mobile Tele Trak, Inc., companies providing telephone answering
and radio communications services in Cleveland and Columbus, respectively. Mr.
Mintz has held similar positions with the predecessors of these companies since
1967. Mr. Mintz is president of several other companies, and was President and a
principal stockholder of Cleveland Mobile Cellular Telephone, Inc. before that
company was acquired through a merger with CCI's predecessor in 1985. Mr. Mintz
was also a director of CCII from July 1991 until the CCII Sale and has been a
director of CCPR
4
<PAGE> 7
since February 1992. Additionally, Mr. Mintz has been a director of NTL since
its formation and is a director of several privately owned companies.
George S. Blumenthal has been a director of CoreComm since March 18, 1998.
Mr. Blumenthal has been the Chairman, Treasurer and a director of CCPR since
February 1992 and was Chief Executive Officer from March 1994 until March 1998.
In addition, Mr. Blumenthal is Chairman, Treasurer and a director of NTL. Mr.
Blumenthal is also a director of Andover Togs, Inc. Mr. Blumenthal was Chairman,
Treasurer and a director of CCII from its organization until April 1994. Mr.
Blumenthal was also Chairman, Treasurer and a director of Cellular
Communications, Inc. ("CCI") from CCI's founding in 1981 until its merger in
1996 into a subsidiary of AirTouch Communications, Inc. (the "CCI Merger").
J. Barclay Knapp has been President, Chief Executive Officer, Chief
Financial Officer and a director of CoreComm since March 1998. Mr. Knapp was
appointed President of CCPR in March 1994 and Chief Executive Officer in March
1998. Mr. Knapp has been a director of CCPR since February 1992 and was Chief
Financial Officer from that date to 1997. Mr. Knapp was Executive Vice
President, Chief Operating Officer and a director of CCII from July 1991 until
June 1998. He is President, Chief Executive Officer, Chief Financial Officer and
a director of NTL. Mr. Knapp was also Executive Vice President, Chief Operating
Officer, Chief Financial Officer and a director of CCI until the CCI Merger.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
During calendar 1998, three meetings (including regularly scheduled and
special meetings) of the Board of Directors were held. The Board of Directors
has a Compensation and Option Committee (the "Compensation Committee") and an
Audit Committee. Messrs. Knafel, Mintz and McCourtney serve as members of the
Compensation Committee and Messrs. Mintz, Patricof and Potash serve as members
of the Audit Committee. The Compensation Committee reviews and makes
recommendations regarding annual compensation for Company officers, and the
Audit Committee oversees the Company's financial reporting process on behalf of
the Company's Board of Directors. During calendar 1998, the Compensation
Committee held one meeting. During 1998, Mr. McCourtney attended 50%, Mr.
Patricof attended 67% and Mr. Knafel attended 75% of the meetings of the Board
of Directors of the Company and committee meetings of which he was a member.
Directors are reimbursed for out-of-pocket expenses incurred in attending
meetings of the Board of Directors and the committees. In addition, as of
December 31, 1998, Messrs. Knafel, Mintz, Patricof and Potash have each been
granted options to purchase an aggregate of 7,448 shares of Common Stock at a
weighted average price of $1.47 per share. Messrs. Knafel, Mintz and Patricof
each have warrants to purchase an aggregate of 85,375 shares of Common Stock at
$13.18 per share and Messrs. Potash and McCourtney have warrants to purchase
40,375 and 32,875 shares, respectively, of Common Stock at $13.18 per share.
Directors who are not officers are paid a fee of $250 for each Board meeting and
each committee meeting that they attend.
5
<PAGE> 8
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the persons
who serve as executive officers of CoreComm. Executive officers of CoreComm are
elected annually by the Board of Directors and serve until their successors are
duly elected and qualified.
<TABLE>
<CAPTION>
NAME AGE TITLE
- ---- --- -----
<S> <C> <C>
George S. Blumenthal.................... 55 Chairman of the Board
J. Barclay Knapp........................ 42 President, Chief Executive Officer and
Chief Financial Officer
Patty J. Flynt.......................... 47 Senior Vice President - Chief Operating
Officer
Richard J. Lubasch...................... 52 Senior Vice President - General Counsel
and Secretary
Gregg Gorelick.......................... 40 Vice President - Controller and
Treasurer
</TABLE>
Set forth below is a brief description of the present and past business
experience of each of the persons who serve as executive officers of CoreComm
who are not also serving as directors.
Patty J. Flynt has been CoreComm's Senior Vice President and Chief
Operating Officer since 1998 and was OCOM Corporation's President from 1996
until 1998. Ms. Flynt is also Group Managing Director of the Information
Services Division of NTL. Prior to joining OCOM Corporation in 1996, Ms. Flynt
was a Vice President of New Par, a joint venture of CCI and AirTouch
Communications, Inc. from 1989 until 1996.
Richard J. Lubasch has been CoreComm's Senior Vice President - General
Counsel and Secretary since 1998. Additionally, Mr. Lubasch has been CCPR's
Senior Vice President - General Counsel and Secretary from February 1992. He was
also the Senior Vice President - General Counsel, Secretary and Treasurer of
CCII from July 1991 until the CCII Sale, and has been Senior Vice
President - General Counsel and Secretary of NTL since its formation. Mr.
Lubasch was Vice President - General Counsel and Secretary of CCI from July 1987
until the CCI Merger.
Gregg Gorelick has been CoreComm's Vice President - Controller and
Treasurer since 1998. Mr. Gorelick has been CCPR's Vice President - Controller
from February 1992, held that position at CCII from July 1991 until the CCII
Sale and has held that position at NTL 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.
BERMUDA RESIDENT REPRESENTATIVE AND SECRETARY
CoreComm is required, as a matter of Bermuda law, to maintain a
representative presence in Bermuda and has elected to appoint a resident
representative. The resident representative is entitled to attend and speak, but
not to vote at meetings of the board or any committee of the board or of the
stockholders. Hugh Gillespie, an attorney with Appleby, Spurling & Kempe,
CoreComm's Bermuda legal advisor, is also CoreComm's initial resident
representative.
Claire Sousa is employed by A.S. & K. Services Ltd., a Bermuda corporation,
and an affiliate of Appleby, Spurling & Kemp, as a corporate administrator, and
serves as CoreComm's Secretary resident in Bermuda.
6
<PAGE> 9
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
POLICY
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 independent
non-employee directors.
The Company's executive compensation program is designed to be closely
linked to corporate performance and return to stockholders. 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 the best possible 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.
The Compensation Committee also recognizes that the cash portion of
compensation for Messrs. Knapp, Blumenthal, Lubasch and Gorelick is small in
light of their compensation from NTL (which is reimbursed to NTL by the Company
based on a reasonable estimate of the time these executives spent on Company
activity in the relevant period). The Compensation Committee believes that for
such executives, stock-based compensation becomes even more significant.
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 executives, the Compensation
Committee recognizes the fact that such executives have participated in the
development of the Company (and its predecessors) from its earliest stages, and
have produced significant consistent long-term value for stockholders of the
Company (and its predecessors) over such period. In determining the annual
compensation for the Chief Executive Officer, the 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 supplemented by
equity-based option grants. With respect to 1998, the base salary for Mr. Knapp,
Mr. Blumenthal, Mr. Lubasch and Mr. Gorelick was $21,200, $20,600, $17,300 and
$10,000, respectively. The base salary for Ms. Flynt was $183,600. With respect
to Messrs. Knapp, Blumenthal, Lubasch and Gorelick, 1998 bonuses have not yet
been determined. Ms. Flynt received a bonus of $131,400 in 1998.
STOCK OPTIONS
In 1998, CoreComm's Board of Directors adopted the CoreComm Limited 1998
Stock Option Plan (the "CoreComm Stock Option Plan"), reserving thereunder
shares for issuances to employees and directors.
The CoreComm Stock Option Plan is intended to encourage stock ownership by
employees of the Company and its divisions and subsidiary corporations and other
affiliates, so that they may acquire or increase their proprietary interest in
the Company, and to encourage such employees and directors who are employees to
remain in the employ of the Company or its affiliates and to put forth maximum
efforts for the success of the business. The CoreComm Stock Option Plan provides
for grants of options to acquire shares of Common Stock, which options may be
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The terms of options granted
pursuant to the CoreComm Stock Option Plan, including provisions regarding
vesting, exercisability, exercise price and duration, are generally set by the
Compensation Committee. In addition, in January, 1999, CoreComm Ohio Limited, a
7
<PAGE> 10
wholly owned subsidiary of CoreComm, adopted the CoreComm Ohio Limited 1999
Stock Option Plan. Under that plan, up to 30% of the common stock of CoreComm
Ohio Limited may become subject to options. These options will not become
exercisable unless and until there is a registered public offering of CoreComm
Ohio Limited's common stock.
In determining individual options 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.
The Compensation Committee believes that the equity interests in the
Company held by the named executive officers represent a significant incentive
to increase overall stockholder value.
In 1998, Messrs. Knapp and Blumenthal each received a warrant to purchase
818,750 shares of Common Stock at an exercise price of $13.18 and $15.82 per
share, respectively. Messrs. Knapp and Blumenthal now own 9,198 shares and
175,449 shares, respectively, of Common Stock, hold options to purchase an
additional 107,728 shares and 28,063 shares, respectively, of Common Stock and
each hold warrants to purchase an additional 818,750 shares of Common Stock.
COMPENSATION DEDUCTION CAP POLICY
The CoreComm Stock Option Plan complies with the requirements regarding
non-deductibility of compensation in excess of $1 million under sec.162(m) of
the Code. Any compensation realized from the exercise of such stock options
granted 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. Other
compensation, such as salary and bonus, is not expected to exceed $1 million per
executive.
THE COMPENSATION AND OPTION COMMITTEE
Sidney R. Knafel
Del Mintz
8
<PAGE> 11
GENERAL
The following table discloses compensation received by the Company's Chief
Executive Officer and the four other most highly paid executive officers for the
period March 16, 1998 (the date of inception) through December 31, 1998.
SUMMARY COMPENSATION TABLE*
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ -------------
COMMON
OTHER ANNUAL STOCK ALL OTHER
BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($) ($) OPTIONS(#)(3) ($)
- --------------------------- ---- --------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. Barclay Knapp.............. 1998 21,200 -- -- 926,478
President and Chief
Executive and Financial
Officer
George S. Blumenthal(1)....... 1998 20,600 -- -- 846,813
Chairman
Richard J. Lubasch............ 1998 17,300 -- -- 201,685
Senior Vice President--
General Counsel and
Secretary
Patty J. Flynt................ 1998 183,600 131,400 -- 36,250
Senior Vice President and
Chief Operating Officer
Gregg Gorelick................ 1998 10,000 -- 57,900(2) 78,404
Vice President, Controller
and Treasurer
</TABLE>
- ---------------
* NTL provides management, financial, legal and technical services to the
Company. Amounts charged to the Company consist of salaries and direct costs
allocated to the Company. In 1998, NTL charged the Company $313,000. It is
not practicable to determine the amounts of these expenses that would have
been incurred had the Company operated as an unaffiliated entity. However,
in the opinion of management of the Company, the allocation method is
reasonable. The named executives, except Ms. Flynt, receive salaries from
NTL and spend portions of their time providing executive management to the
Company.
Ms. Flynt was granted options in a subsidiary of the Company under a plan
that was adopted in January 1999. Under that plan, up to 30% of the common
stock of the subsidiary may become subject to options.
(1) Mr. Blumenthal resigned as Chief Executive Officer in March 1998, and Mr.
Knapp was appointed Chief Executive Officer in March 1998.
(2) Other annual compensation consists of relocation expenses of $57,900.
(3) 1998 option grants do not include an aggregate of 225,880 options issued to
the named executives as a result of an adjustment to pre-existing options in
CCPR as a consequence of the spin-off.
9
<PAGE> 12
OPTION GRANTS TABLE
The following table provides information on stock option grants during 1998
to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------ VALUE AT ASSUMED
% OF TOTAL ANNUAL RATE OF
OPTIONS STOCK PRICE
NUMBER OF GRANTED APPRECIATION FOR
SECURITIES TO EXERCISE OPTION TERM
UNDERLYING EMPLOYEES OR BASE -----------------------
OPTIONS IN FISCAL PRICE EXPIRATION 5%($) 10%($)
NAME GRANTED(#) YEAR ($/SHARE)** DATE $21.47 $34.19
- ---- ----------- ---------- ----------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
J. Barclay Knapp..... --(1) --% -- -- -- --
George S.
Blumenthal......... --(2) -- -- -- -- --
Richard J. Lubasch... --(3) -- -- -- -- --
Patty J. Flynt*...... 30,000(4) 0.88 13.18 08/20/08 248,707 630,268
Gregg Gorelick*...... 5,000(5) 0.15 13.18 03/12/08 41,451 105,045
20,000(5) 0.59 13.18 08/20/08 165,804 420,178
</TABLE>
- ---------------
(1) Does not include 818,750 warrants and 107,728 options as a result of an
adjustment to pre-existing options in CCPR as a consequence of the spin-off.
(2) Does not include 818,750 warrants and 28,063 options as a result of an
adjustment to pre-existing options in CCPR as a consequence of the spin-off.
(3) Does not include 171,250 warrants and 30,435 options as a result of an
adjustment to pre-existing options in CCPR as a consequence of the spin-off.
(4) Does not include 6,250 options as a result of an adjustment to pre-existing
options in CCPR as a consequence of the spin-off.
(5) Does not include 53,404 options as a result of an adjustment to pre-existing
options in CCPR as a consequence of the spin-off.
* All options were granted on March 13, 1998 or August 21, 1998; 20% were
exercisable upon issuance, 20% became exercisable on January 1, 1999 and an
additional 20% will become exercisable on each of January 1, 2000, 2001 and
2002. Upon a change of control of the Company, all unvested options become
fully vested and exercisable.
** CoreComm began trading on The Nasdaq Stock Market's National Market (the
"NASDAQ") on September 4, 1998. The closing price on September 4, 1998 was
$14.25.
10
<PAGE> 13
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table provides information on stock option exercises during
1998 by the named executive officers and the value at December 31, 1998 of
unexercised in-the-money options held by each of the named executive officers.
None of the named executive officers exercised options during 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR-END AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS AT
AT FY-END(#) FY-END($)*
EXERCISABLE(E)/ EXERCISABLE(E)/
NAME UNEXERCISABLE(U) UNEXERCISABLE(U)
- ---- ---------------- ----------------
<S> <C> <C>
J. Barclay Knapp............................................ 926,478(E) 3,767,036(E)
0(U) 0(U)
George S. Blumenthal........................................ 28,063(E) 426,586(E)
0(U) 0(U)
Richard J. Lubasch.......................................... 201,685(E) 904,961(E)
0(U) 0(U)
Patty J. Flynt.............................................. 12,250(E) 110,233(E)
24,000(U) 61,680(U)
Gregg Gorelick.............................................. 41,904(E) 437,506(E)
36,500(U) 93,805(U)
</TABLE>
- ---------------
* Based on the closing price on the NASDAQ on December 31, 1998 of $15.75.
11
<PAGE> 14
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") and the Center
for Research in Security Prices Index of Nasdaq Telecommunications Stocks (the
"CRSP Index").
The graph assumes that $100 was invested on September 4, 1998 (the date the
Company began trading on the NASDAQ) in each of the Common Stock, the CRSP Index
and the Nasdaq (U.S.) Index.
COMPARISON OF CORECOMM LIMITED,
THE CRSP INDEX AND THE NASDAQ (U.S.) INDEX
<TABLE>
<CAPTION>
SPTR RUSSELL PEER GROUP
---- ------- ----------
<S> <C> <C> <C>
'1993' 100 100 100
'1994' 41.49 98.18 130.95
'1995' 46.81 126.1 137.59
'1996' 185.11 146.9 147.28
'1997' 81.92 179.75 125.22
'1998' 35.11 175.17 119.57
</TABLE>
- ---------------
NOTE: Stock price performance shown above for the Common Stock is historical and
not necessarily indicative of future price performance.
12
<PAGE> 15
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 2)
Subject to ratification by the stockholders, the Board of Directors has
reappointed Ernst & Young LLP as independent auditors to audit the financial
statements of the Company for the year ending December 31, 1999.
Representatives of the firm of Ernst & Young LLP are expected to be present
at the Annual Meeting and will have an opportunity to make a statement if they
so desire and will be available to respond to appropriate questions.
The ratification of the selection of Ernst & Young LLP as the Company's
independent auditors for 1999 will require the affirmative vote of the holders
of a majority of the shares of Common Stock present at the Annual Meeting, in
person or represented by proxy, and entitled to vote. In determining whether the
proposal has received the requisite number of affirmative votes, abstentions
will be counted and will have the same effect as a vote against the proposal;
broker non-votes will be disregarded and will have no effect on the outcome of
the vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
SUCH RATIFICATION
RELATED PARTY TRANSACTIONS
The Company had extended to Gregg Gorelick, Vice President-Controller, a
loan on a secured basis for relocation expense. The loan was interest free and
was repayable upon the sale of his former residence or upon his termination of
employment. The maximum amount outstanding during the latest fiscal year was
$664,000. The loan was repaid in 1999.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2000 Annual
Meeting must be received by the Company at the address set forth on the first
page of this proxy statement on or before December 29, 1999 to be considered for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
OTHER BUSINESS
The Board of Directors is not aware of any matters other than those set
forth in this proxy statement that will be presented for action at the Annual
Meeting and does not intend to bring any other matters before the Annual
Meeting. However, if any others matters should properly come before the Annual
Meeting, or at any adjournment or postponement thereof, it is the intention of
the persons named in the accompanying proxy to vote on such matters as they, in
their discretion, may determine.
By order of the Board of Directors,
/s/ Richard J. Lubasch
RICHARD J. LUBASCH
Secretary
New York, New York
April 28, 1999
13
<PAGE> 16
PROXY
CORECOMM LIMITED
110 EAST 59TH STREET, NEW YORK, NEW YORK 10022
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING ON
JUNE 3, 1999
The undersigned hereby appoints George S. Blumenthal, J. Barclay Knapp and
Richard J. Lubasch, and each of them, with full power of substitution, proxies
to represent the undersigned at the Annual Meeting of Stockholders of CoreComm
Limited (the "Company") to be held on Thursday, June 3, 1999 at 10:45 a.m.,
local time, at the Essex House, Hyde Park Suite, located at 160 Central Park
South, New York, New York 10019, and at any adjournment or postponement thereof
and thereat to vote all of the shares of stock which the undersigned would be
entitled to vote, with all the powers the undersigned would possess if
personally present. The Board of Directors recommends that you vote FOR the
following proposal.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. To ratify the appointment of Ernst & Young LLP as the independent auditors
of the Company for the fiscal year ending December 31, 1999
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please date and sign on reverse side and return promptly.)
<PAGE> 17
(Continued from other side)
2. In their discretion, to act upon such other business as may properly come
before the Annual Meeting and any adjournment or postponement thereof.
THE PROXY HOLDERS WILL VOTE THE SHARES REPRESENTED BY THIS PROXY IN THE
MANNER INDICATED ON THE REVERSE SIDE HEREOF. UNLESS A CONTRARY DIRECTION IS
INDICATED, THE PROXY HOLDERS WILL VOTE SUCH SHARES "FOR" THE PROPOSAL SET FORTH
ON THE REVERSE SIDE HEREOF. IF ANY FURTHER MATTERS PROPERLY COME BEFORE THE
ANNUAL MEETING, IT IS THE INTENTION OF THE PERSON NAMED ABOVE TO VOTE SUCH
PROXIES IN ACCORDANCE WITH THEIR BEST JUDGMENT.
-------------------------
Signature
-------------------------
Signature
Dated , 1999
In case of joint owners,
each joint owner must
sign. If signing for a
corporation or
partnership or as agent,
attorney or fiduciary,
indicate the capacity in
which you are signing.
PLEASE MARK, DATE AND SIGN YOUR NAME AS IT APPEARS ON THIS CARD
AND RETURN IN THE ENCLOSED ENVELOPE.
<PAGE> 18
<TABLE>
<S> <C> <C>
TWO ADDITIONAL WAYS TO VOTE [CORECOMM LOGO]
N
N
VOTE BY TELEPHONE N VOTE BY INTERNET
N
IT'S FAST, CONVENIENT, AND YOUR VOTE IS IMMEDIATELY N IT'S FAST, CONVENIENT, AND YOUR VOTE IS
CONFIRMED AND POSTED. N IMMEDIATELY
N CONFIRMED AND POSTED AND YOU CAN GET ALL FUTURE
USING A TOUCH-TONE PHONE N MATERIALS BY INTERNET.
CALL THE TOLL-FREE NUMBER SHOWN ON THE VOTING N WWW.PROXYVOTE.COM
INSTRUCTION FORM. N JUST FOLLOW THESE 4 EASY STEPS:
N
JUST FOLLOW THESE 4 EASY STEPS: N 1. READ THE ACCOMPANYING PROXY STATEMENT AND
N VOTING INSTRUCTION FORM.
1. READ THE ACCOMPANYING PROXY STATEMENT AND VOTING N
INSTRUCTION FORM. N 2. GO TO WEBSITE WWW.PROXYVOTE.COM.
N
2. CALL THE TOLL-FREE NUMBER SHOWN ON YOUR VOTING N 3. ENTER YOUR 12 DIGIT CONTROL NUMBER LOCATED ON
INSTRUCTION FORM. YOUR VOTING INSTRUCTION FORM.
3. ENTER YOUR 12 DIGIT CONTROL NUMBER LOCATED ON YOUR 4. FOLLOW THE SIMPLE INSTRUCTIONS.
VOTING INSTRUCTION FORM. YOUR VOTE IS IMPORTANT!
4. FOLLOW THE SIMPLE RECORDED INSTRUCTIONS. GO TO WWW.PROXYVOTE.COM
YOUR VOTE IS IMPORTANT!
CALL 24 HOURS A DAY 24 HOURS A DAY
DO NOT RETURN VOTING FORM IF YOU ARE VOTING BY TELEPHONE OR INTERNET
</TABLE>
