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Filed pursuant to rule 424(b)3
Registration Nos. 333-36434 and 333-36434-01
Prospectus
NTL (DELAWARE), INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2009
NTL INCORPORATED
SHARES OF COMMON STOCK
- Selling securityholders who are identified in this prospectus may offer and
sell an indeterminate number of:
-- 5 3/4% Convertible Subordinated Notes Due 2009 of NTL (Delaware), Inc.
-- shares of common stock of NTL Incorporated
by using this prospectus.
- The offering price for the convertible notes is not set but will be determined
according to negotiation between a selling securityholder and the prospective
purchaser. The offering price for the common stock will be negotiated or, if
sold on the Nasdaq National Market, at prevailing market price.
- NTL Incorporated's common stock is traded on the Nasdaq National Market under
the symbol NTLI. On August 29, 2000, the last reported sales price of NTL
Incorporated common stock was $39.6875 per share.
- There is no public market for the convertible notes, and NTL (Delaware), Inc.
does not intend to apply to the Nasdaq National Market to list the convertible
notes. Application will be made to list the convertible notes on the
Luxembourg Stock Exchange.
PLEASE READ CAREFULLY THE RISK FACTORS SECTION BEGINNING ON PAGE 4, WHERE
SPECIFIC RISKS ASSOCIATED WITH THESE SECURITIES ARE DESCRIBED, BEFORE YOU MAKE
YOUR INVESTMENT DECISION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is August 30, 2000
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EXPLANATORY NOTE REGARDING CORPORATE RESTRUCTURING OF NTL
On May 18, 2000, NTL Incorporated completed a corporate restructuring to
create a holding company structure. The restructuring was accomplished through a
merger under Section 251(g) of the General Corporation Law of the State of
Delaware. At the effective time of the merger, all stockholders of the old NTL
Incorporated became stockholders of the new holding company and the old NTL
became a wholly owned subsidiary of the new holding company. The new holding
company took the NTL Incorporated name and the old NTL Incorporated was renamed
NTL (Delaware), Inc.
The new holding company's stock trades under the same old NTL Incorporated
symbol on the NASDAQ national market with the same CUSIP number. In the merger,
all outstanding shares of old NTL Incorporated were converted into shares of the
new holding company with the same voting powers, designations, preferences and
rights, and the same qualifications, restrictions, and limitations, as the
shares of old NTL Incorporated.
At the effective time of the merger, the only material asset of the new
holding company was the capital stock of NTL (Delaware), Inc. and it had no
material liabilities.
Prior to the restructuring, the indenture pursuant to which the convertible
notes were issued was supplemented by the first supplemental indenture, dated as
of May 17, 2000, by and among NTL Incorporated, NTL (Delaware), Inc. and The
Chase Manhattan Bank as trustee. The first supplemental indenture provides that
NTL Incorporated is joint and severally liable for the obligations of NTL
(Delaware), Inc. to pay the principal of, premium, if any, liquidated damages,
if any, offer amount, if any, and interest on, the convertible subordinated
notes due 2009 of NTL (Delaware), Inc.
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You should rely only on the information contained in this prospectus. We
have not authorized any other person to provide you with different information.
If anyone provides you with different or inconsistent information, you should
not rely on it. We are not making an offer of the securities in any jurisdiction
where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus is accurate as of the date on the front cover of
this prospectus only. Our business, financial condition, results of operations
and prospects may have changed since that date.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Prospectus Summary.......................................... 1
Risk Factors................................................ 4
Use of Proceeds............................................. 14
Description of the Convertible Notes........................ 15
Registration Rights......................................... 43
United States Federal Tax Considerations.................... 44
Selling Securityholders..................................... 46
Plan of Distribution........................................ 48
Legal Matters............................................... 50
Experts..................................................... 50
Enforceability of Civil Liabilities......................... 50
Where You Can Find More Information About Us................ 51
</TABLE>
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PROSPECTUS SUMMARY
This summary highlights information about us which is contained elsewhere
or incorporated by reference in this prospectus. This summary may not contain
all the information that is important to you. You should read the entire
prospectus before making an investment decision.
ABOUT NTL
NTL, through its subsidiaries, owns and operates broadband communications
networks, for telephone, cable television and Internet services and transmission
networks for television and radio in the United Kingdom, the Republic of
Ireland, France, Switzerland and Australia. NTL's predominant lines of business
are residential services, national telecommunications services and broadcast
transmission and tower services. Residential services include telephony, cable
television, Internet access and interactive services. National
telecommunications services include business telephony, national and
international carrier telecommunications, Internet services and radio
communications services. Broadcast transmission and tower services include
digital and analog television and radio broadcasting, tower and site leasing and
satellite communications services.
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THE NOTES
Securities Offered............ Up to $1,200,000,000 aggregate principal amount
of 5 3/4% convertible subordinated notes due
2009 of NTL (Delaware), Inc. and up to
11,092,200 shares of common stock of NTL
Incorporated plus such indeterminate number of
additional shares of common stock that may be
issued from time to time upon conversion of the
convertible notes by reason of adjustment to
the conversion price in certain circumstances
described herein. Also offered are up to 40,610
shares of common stock of NTL Incorporated
issuable on exchange of certain 5% Unsecured
Convertible Loan Notes 1955 (as extended) of
Bell Cable Media plc.
Maturity...................... December 15, 2009.
Interest Payment Dates........ June 15 and December 15 of each year,
commencing June 15, 2000.
Conversion.................... The convertible notes, unless previously
redeemed, are convertible at the option of the
holder at any time prior to maturity into
shares of common stock of NTL Incorporated at a
conversion price of $108.184 per share, subject
to adjustment in some events. See "Description
of the Convertible Notes -- Conversion."
Optional Redemption........... On or prior to December 18, 2002, NTL
(Delaware), Inc. may redeem any of the
convertible notes at an initial redemption
price of 105.75% of the aggregate principal
amount of the convertible notes to be redeemed
if the current market value of the common stock
equals or exceeds certain triggering levels.
After December 18, 2002, the convertible notes
are redeemable, in whole or from time to time
in part, at the option of NTL (Delaware), Inc.
on at least 30 but not more than 60 days' prior
notice at the redemption prices set forth in
this prospectus together with accrued and
unpaid interest, if any, to the date of
redemption. See "Description of the Convertible
Notes -- Optional Redemption."
Subordination................. The convertible notes are general unsecured
obligations of NTL (Delaware), Inc. and NTL Incorporated and are subordinate in
right of payment to all existing and future
senior debt of NTL (Delaware),
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Inc. and NTL Incorporated as the case may be.
In addition, the convertible notes are
effectively subordinated to all existing and
future liabilities of subsidiaries,
partnerships and affiliated joint ventures,
including trade payables of NTL (Delaware),
Inc. and NTL Incorporated. The ability of NTL
(Delaware), Inc. and NTL Incorporated and their
subsidiaries to incur additional indebtedness
and liabilities is not limited by the terms of
the indenture under which the convertible notes
are issued. See "Description of the Convertible
Notes -- Subordination of Convertible Notes."
Change of Control............. In some circumstances involving a change of
control of NTL (Delaware), Inc., holders of the
convertible notes will have the right, subject
to some restrictions and conditions, to require
NTL Incorporated and NTL (Delaware), Inc. to
repurchase all or any part of the convertible
notes at a purchase price equal to 101% of the
principal amount of those convertible notes
together with accrued and unpaid interest, if
any, to the date of repurchase. NTL
Incorporated and NTL (Delaware), Inc. may not
have sufficient funds or the financial
resources necessary to satisfy, or may be
precluded by the terms governing NTL
Incorporated's and NTL (Delaware), Inc.'s
indebtedness from satisfying, its obligations
to repurchase the convertible notes and other
debt that may become payable upon a change of
control. See "Description of the Convertible
Notes -- Repurchase at the Option of Holders."
Use of Proceeds............... The selling securityholders will receive all of
the net proceeds from the sale of the
securities sold pursuant to this prospectus.
NTL (Delaware), Inc. and NTL Incorporated will
not receive any proceeds from sales by the
selling securityholders of the offered
securities.
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RISK FACTORS
You should consider carefully all of the information set forth in this
prospectus and incorporated by reference in this prospectus. See "Where you can
find more information about us." You should particularly evaluate the following
risks before deciding to purchase the convertible notes or the common stock
issuable on conversion of the convertible notes. For the purposes of this Risk
Factors section, references to "NTL," "we," "us" or "our" mean NTL Incorporated
and NTL (Delaware), Inc., unless otherwise provided.
THE CONVERTIBLE NOTES ARE SUBORDINATED TO OUR EXISTING AND FUTURE SENIOR DEBT
Our obligations under the convertible notes are unsecured and are
subordinated in right of payment to all our existing and future senior debt as
that term is defined in the indenture governing the convertible notes. This
means that we cannot make any payments on the convertible notes if we default on
a payment of any of those senior debts. In the event of the bankruptcy,
liquidation or dissolution of NTL, our assets would be available to pay our
obligations under the convertible notes only after all payments have been made
on our senior debt. Because our available assets may be insufficient to pay all
of our creditors upon bankruptcy or the occurrence of a similar event, you may
receive nothing and are likely to receive proportionately less than the holders
of our senior debt.
OUR SUBSTANTIAL LEVERAGE COULD ADVERSELY AFFECT THE FINANCIAL HEALTH OF THE
COMPANY
NTL (Delaware), Inc. is and, for the foreseeable future will continue to
be, highly leveraged. On June 30, 2000, the accreted value of NTL (Delaware),
Inc.'s total long-term indebtedness was approximately $13.4 billion. This debt
represents approximately 94% of its total capitalization as of June 30, 2000.
On June 30, 2000, the accreted value of NTL Incorporated's total long-term
indebtedness, including its 5% cumulative preferred stock, series A and its 13%
senior redeemable exchangeable preferred stock, was approximately $15.5 billion.
This represents approximately 59% of its total capitalization as of June 30,
2000.
The indentures governing our subsidiaries' outstanding indebtedness permit
those subsidiaries to incur additional indebtedness to finance our working
capital and capital expenditure requirements, finance the construction of our
network and finance the acquisition of assets, licenses and computer software
that are used in connection with a cable business, as well as entities that are
engaged in the cable business.
Our substantial indebtedness could adversely affect our financial health
by, among other things:
- increasing our vulnerability to adverse changes in general economic
conditions or increases in prevailing interest rates particularly if any
of our borrowings are at variable interest rates;
- limiting our ability to obtain the additional financing we need to
operate, develop and expand our business; and
- requiring us to dedicate a substantial portion of our cash flow from
operations to service our debt, which reduces the funds available for
operations and future business opportunities.
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NTL INCORPORATED AND NTL (DELAWARE), INC. ARE HOLDING COMPANIES THAT ARE
DEPENDENT UPON CASH FLOW FROM THEIR SUBSIDIARIES TO MEET THEIR
OBLIGATIONS -- THEIR ABILITY TO ACCESS THAT CASH FLOW MAY BE LIMITED IN SOME
CIRCUMSTANCES
NTL Incorporated and NTL (Delaware), Inc. are holding companies with no
independent operations or significant assets other than their investments in and
advances to their subsidiaries and affiliated joint ventures. NTL Incorporated
and NTL (Delaware), Inc. depend upon the receipt of sufficient funds from their
subsidiaries and affiliated joint ventures to meet their obligations, including
their obligations associated with the convertible notes. The terms of existing
and future indebtedness of their subsidiaries and the laws of the jurisdictions
under which those subsidiaries are organized may limit the payment of dividends,
loans and other distributions to them.
Your right to receive payments on or in respect of the convertible notes
could be adversely affected in the event of a bankruptcy of any of NTL
Incorporated's or NTL (Delaware), Inc.'s subsidiaries. Following the liquidation
of a subsidiary or joint venture of NTL Incorporated or NTL (Delaware), Inc.,
the creditors of that subsidiary or joint venture will generally be entitled to
be paid in full before NTL Incorporated or NTL (Delaware), Inc. is entitled to a
distribution of any assets in the liquidation.
IN SOME CIRCUMSTANCES INVOLVING A CHANGE OF CONTROL OF NTL (DELAWARE), INC., NTL
(DELAWARE), INC. AND NTL INCORPORATED WILL BE REQUIRED TO REPURCHASE SOME OF ITS
INDEBTEDNESS, INCLUDING THE CONVERTIBLE NOTES -- IF THIS OCCURS, NTL (DELAWARE),
INC. AND NTL INCORPORATED MAY NOT HAVE THE FINANCIAL RESOURCES NECESSARY TO MAKE
THOSE REPURCHASES
NTL (Delaware), Inc. and NTL Incorporated may under some circumstances
involving a change of control of NTL (Delaware), Inc. be obligated to offer to
repurchase its outstanding debt securities, including the convertible notes,
before maturity. NTL (Delaware), Inc. and NTL Incorporated cannot assure you
that they will have available financial resources necessary to repurchase those
securities in those circumstances. If NTL (Delaware), Inc. and NTL Incorporated
cannot repurchase those debt securities in the event of a change of control, the
failure to repurchase would constitute an event of default under the indentures
under which those securities are issued and could result in a cross-default
under other indebtedness.
THE ANTICIPATED CONSTRUCTION COSTS OF OUR NETWORK WILL INCREASE AS A RESULT OF
OUR RECENT ACQUISITIONS AND WILL REQUIRE SUBSTANTIAL AMOUNTS OF ADDITIONAL
FUNDING
Following recent acquisitions, our capital expenses and cost of operations
for the development, construction and operation of our combined
telecommunications networks will significantly increase. Given our most recent
acquisitions, we estimate that significant amounts of additional funding will be
necessary to meet these capital expenditure requirements.
We cannot be certain that:
- we will be able to obtain additional financing with acceptable terms,
- actual construction costs will meet our expectations,
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- we will satisfy conditions precedent to advances under future credit
facilities,
- we will not acquire additional businesses that require additional
capital,
- we will be able to generate sufficient cash from operations to meet
capital requirements, debt service and other obligations when required,
or
- we will withstand exposure to exchange and interest rate fluctuations.
Currently we do not have any financing plans in place to address the
factors listed above.
WE WILL REQUIRE ADDITIONAL FINANCING BECAUSE WE DO NOT EXPECT TO GENERATE
SUFFICIENT CASH FLOW TO REPAY AT MATURITY THE ENTIRE PRINCIPAL AMOUNT OF OUR
OUTSTANDING INDEBTEDNESS
We anticipate that we will not generate sufficient cash flow from
operations to repay at maturity the entire principal amount of our outstanding
indebtedness. Some of the measures we may take to refinance our debt include:
- refinancing all or portions of that indebtedness,
- seeking modifications to the terms of that indebtedness, and
- seeking additional debt financing, which may require us to obtain the
consent of some of our lenders.
We cannot be certain that we will succeed in executing any of these
measures.
WE CANNOT BE CERTAIN THAT WE WILL BE SUCCESSFUL IN INTEGRATING ACQUIRED
BUSINESSES INTO OUR OPERATIONS, OR THAT WE WILL REALIZE THE BENEFITS WE
ANTICIPATE FROM ANY ACQUISITION
We will continue to consider strategic acquisitions and combinations that
involve operators or owners of licenses to operate cable, telephone, television
or telecommunications systems or services and related businesses. If
consummated, some of these transactions would significantly alter our holdings
and might require us to incur substantial indebtedness. We cannot assure you
that, with respect to our recent acquisitions, as well as any future
acquisitions, if they occur, we:
- will realize any anticipated benefits,
- will successfully integrate the businesses with our operations, or
- will manage that integration without adversely affecting NTL.
WE HAVE HISTORICALLY INCURRED LOSSES AND GENERATED NEGATIVE CASH FLOWS AND WE
CANNOT ASSURE YOU THAT WE WILL BE PROFITABLE IN THE FUTURE
Construction and operating expenditures have resulted in negative cash flow
which we expect will continue at least until we establish an adequate customer
base. We also expect to incur substantial additional losses. We cannot be
certain that we will achieve or sustain profitability in the future. Failure to
achieve profitability could diminish our ability to sustain operations and
obtain additional required funds. In addition, a failure to achieve or sustain
profitability could adversely affect our ability to meet our obligations,
including the obligations associated with the convertible notes.
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For the six months ended June 30, 2000, NTL (Delaware), Inc.'s net loss was
$951 million. For the following years ended December 31, NTL (Delaware), Inc.
had the following net losses:
- 1999: $736 million
- 1998: $535 million
- 1997: $333 million
- 1996: $254 million
- 1995: $91 million
As of June 30, 2000, NTL (Delaware), Inc.'s accumulated deficit was $2.9
billion.
For the six months ended June 30, 2000, NTL Incorporated's net loss was
$1.0 billion. For the following years ended December 31, NTL Incorporated had
the following net losses:
- 1999: $736 million
- 1998: $535 million
- 1997: $333 million
- 1996: $254 million
- 1995: $91 million
As of June 30, 2000, NTL Incorporated's accumulated deficit was $3.0
billion.
WE HAVE HISTORICALLY HAD A DEFICIENCY OF EARNINGS TO FIXED CHARGES AND TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS -- OUR EARNINGS IN THE
FUTURE MAY NOT BE SUFFICIENT TO COVER THOSE FIXED CHARGES, INCLUDING OUR
OBLIGATIONS ASSOCIATED WITH THE CONVERTIBLE NOTES
For the years ended December 31, 1999, 1998, 1997, 1996 and 1995, NTL
(Delaware), Inc.'s earnings were insufficient to cover fixed charges by
approximately $809.8 million, $535.0 million, $350.9 million, $268.9 million and
$112.4 million, respectively. For the six months ended June 30, 2000, earnings
for NTL (Delaware), Inc. were insufficient to cover fixed charges by
approximately $1.0 billion. NTL (Delaware), Inc.'s earnings for the years ended
December 31, 1999, 1998 and 1997 were insufficient to cover combined fixed
charges and preferred stock dividends by $883.5 million, $553.7 million and
$362.9 million, respectively. For the six months ended June 30, 2000, earnings
for NTL (Delaware), Inc. were insufficient to cover combined fixed charges and
preferred stock dividends by approximately $1.0 billion.
For the years ended December 31, 1999, 1998, 1997, 1996 and 1995, NTL
Incorporated's earnings were insufficient to cover fixed charges by
approximately $809.8 million, $535.0 million, $350.9 million, $268.9 million and
$112.4 million, respectively. For the six months ended June 30, 2000, earnings
for NTL Incorporated were insufficient to cover fixed charges by approximately
$1.1 billion. NTL Incorporated's earnings for the years ended December 31, 1999,
1998 and 1997 were insufficient to cover combined fixed charges and preferred
stock dividends by $883.5 million, $553.7 million and $362.9 million,
respectively. For the six months ended June 30, 2000, earnings for NTL
Incorporated were insufficient to cover combined fixed charges and preferred
stock dividends by approximately $1.1 billion.
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Fixed charges consist of interest expense, including capitalized interest,
amortization of fees related to debt financing and rent expense deemed to be
interest. Our earnings in the future may not be sufficient to cover those fixed
charges, including our obligations associated with the convertible notes.
WE ARE SUBJECT TO SIGNIFICANT COMPETITION IN EACH OF OUR BUSINESS AREAS AND WE
EXPECT THE COMPETITION WILL INTENSIFY -- IF WE ARE UNABLE TO COMPETE
SUCCESSFULLY OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE
ADVERSELY AFFECTED
We face significant competition from established and new competitors in
each of our businesses. As existing technology develops and new technologies
emerge, we believe that competition will intensify in each of our business
areas, particularly business telecommunications and the internet. Some of our
competitors have substantially greater financial and technical resources than we
do. If we are unable to compete successfully, our financial condition and
results of operations could be adversely affected.
OUR PRINCIPAL BUSINESSES ARE SUBJECT TO GOVERNMENT REGULATION, INCLUDING PRICING
REGULATION, AND CHANGES IN CURRENT REGULATIONS MAY ADVERSELY AFFECT US
Our principal business activities in the UK are regulated and supervised by
various governmental bodies. Changes in laws, regulations or governmental policy
or the interpretations of those laws or regulations affecting our activities and
those of our competitors, such as licensing requirements, changes in price
regulation and deregulation of interconnection arrangements, could have a
material adverse effect on us.
In addition, we are also subject to regulatory initiatives of the European
Commission. Changes in EU Directives may reduce the range of programing and
increase the costs of purchasing television programing or require us to provide
access to our cable network infrastructure to other service providers, which
could have a material adverse effect on us.
OUR UK BROADCAST SERVICES BUSINESS IS DEPENDENT UPON SITE SHARING ARRANGEMENTS
WITH OUR PRINCIPAL COMPETITOR
As a result of, among other factors, a natural shortage of potential
transmission sites and the difficulties in obtaining planning permission for
erection of further masts, Crown Castle International Corp. and NTL have made
arrangements to share a large number of tower sites. We cannot assure you that
the site sharing arrangements will not be terminated. Termination of the site
sharing arrangements would have a material adverse effect on us.
Under the present arrangements, one of the parties is the owner, lessor or
licensor of each site and the other party is entitled to request a license to
use specified facilities at that site. Each site license granted pursuant to the
site sharing agreement is for an initial period expiring on December 31, 2005,
subject to title to the site and to the continuation in force of the site
sharing agreement. Each site sharing agreement provides that, if requested by
the sharing party, it will be extended for further periods. Either party may
terminate the agreement by 5 years' written notice until December 31, 2005 or at
any date which is a date 10 years or a multiple of 10 years after December 31,
2005.
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OUR UK BROADCAST SERVICES BUSINESS IS DEPENDENT UPON ITV AND OTHER CONTRACTS
Our UK broadcast services business is substantially dependent upon
contracts with the ITV contractors, Channel 4/Welsh Fourth Channel and Vodafone,
for the provision of transmission services. The prices that we may charge these
companies for transmission services are subject to regulation by OFTEL. The
contracts with the ITV contractors and Channel 4/Welsh Fourth Channel terminate
on December 31, 2002. Historically, the ITV contractors and Channel 4/Welsh
Fourth Channel have renewed their contracts with us, but we cannot assure you
that they will renew upon expiration, that they will negotiate terms for the
contracts that are as favorable as the original terms, or that they will not
obtain a portion of the transmission services from third parties. The loss of
any one of these contracts could have a material adverse effect on us.
FAILURE TO MANAGE OUR GROWTH AND EXPANSION COULD HAVE A MATERIAL ADVERSE EFFECT
ON US
We have experienced rapid growth and development in a relatively short
period, and to meet our strategic objectives will require a continuation of that
growth. Management of that growth will require, among other things:
- stringent control of construction and other costs,
- continued development of our financial and management controls,
- increased marketing activities, and
- the training of new personnel.
Failure to manage our rapid growth and development successfully could have
a material adverse effect on us.
WE ARE DEPENDENT UPON A SMALL NUMBER OF KEY PERSONNEL
A small number of key executive officers manage our businesses, and the
loss of one or more of these executive officers could have a material adverse
effect on us. We believe that our future success will depend in large part on
our continued ability to attract and retain highly skilled and qualified
personnel. We have not entered into written employment contracts or non-compete
agreements with, nor have we obtained life insurance policies covering those key
executive officers. Some of our senior managers also serve as members of senior
management of other companies in the telecommunications business.
THE TELECOMMUNICATIONS INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGES AND WE
CANNOT PREDICT THE EFFECT OF ANY CHANGES ON OUR BUSINESSES
The telecommunications industry is subject to rapid and significant changes
in technology and the effect of technological changes on our businesses cannot
be predicted. However, the cost of implementation for emerging and future
technologies could be significant, and our ability to fund such implementation
may depend on our ability to obtain additional financing.
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WE ARE SUBJECT TO CURRENCY RISK BECAUSE WE OBTAIN A SUBSTANTIAL AMOUNT OF
FINANCING IN US DOLLARS BUT GENERALLY GENERATE REVENUES AND INCUR EXPENSES IN
OTHER CURRENCIES
We will encounter currency exchange rate risks because we generate revenues
and incur construction and operating expenses in other currencies, primarily in
British pounds sterling, while we pay interest and principal obligations with
respect to most of our existing indebtedness in US dollars. We cannot assure you
that any hedging transaction we might enter into will be successful and that
shifts in the currency exchange rates will not have a material adverse effect on
us.
WE DO NOT INSURE THE UNDERGROUND PORTION OF OUR NETWORK
We obtain insurance of the type and in the amounts that we believe are
customary for similar companies. Consistent with this practice, we do not insure
the underground portion of our cable network. Substantially all of our cable
network is constructed underground. Any catastrophe that affects a significant
portion of a system's underground cable network could result in substantial
uninsured losses.
ANTI-TAKEOVER MATTERS -- VARIOUS PROVISIONS OF THE INDENTURES GOVERNING THE
INDEBTEDNESS OF NTL AND ITS SUBSIDIARIES AND THE CERTIFICATE OF INCORPORATION OF
NTL INCORPORATED MAY HAVE THE EFFECT OF DELAYING, PREVENTING OR MAKING A CHANGE
OF CONTROL OF NTL MORE DIFFICULT
Some provisions of the indenture that governs the convertible notes and the
indentures governing the outstanding indebtedness of NTL and its subsidiaries
may have the effect of delaying or preventing transactions involving a change of
control of NTL, including transactions in which stockholders of NTL Incorporated
might otherwise receive a possible substantial premium for their shares over
then current market prices, and may limit the ability of stockholders of NTL
Incorporated to approve transactions that they may deem to be in their best
interest.
A change of control may require NTL and its subsidiaries to offer to
repurchase indebtedness under existing or future agreements governing that
indebtedness. As a consequence, a change of control might require NTL to
refinance substantial amounts of its indebtedness and could impose other
significant obligations on us. Our inability or the inability of one of our
subsidiaries to purchase all or some of the notes tendered for purchase, would
also constitute an event of default under the applicable indenture which would
have a material adverse effect on us.
Our certificate of incorporation contains provisions which may have the
effect of
- preventing or making more difficult a hostile takeover,
- making it more difficult to remove or change the composition of our
incumbent board of directors and our officers,
- being adverse to stockholders who desire to participate in a tender
offer and
- depriving stockholders of possible opportunities to sell their shares
at temporarily higher prices.
In particular, the rights issuable under the stockholder rights plan of NTL
Incorporated have anti-takeover effects that will cause substantial dilution to
a person or
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group that acquires a substantial interest in NTL Incorporated without the prior
approval of the board of directors of NTL Incorporated. As a result of the
provisions of the certificate of incorporation and the ownership of NTL
Incorporated, no change of control requiring stockholder approval is possible
without the consent of the owners of the preferred stock to which the
stockholder rights plan relates.
THE AGREEMENTS GOVERNING SOME OF OUR SUBSIDIARIES MAY INDIRECTLY LIMIT NTL
INCORPORATED'S ABILITY TO PAY DIVIDENDS
The indentures governing NTL Communication Corp.'s senior notes impose
limitations on NTL's Incorporated's ability to pay dividends and, because NTL
Incorporated is a holding company with no independent operations, consequently
restrict its ability to pay dividends on its common stock.
Additionally, the bridge facility to finance NTL (Delaware), Inc.'s
acquisition of Cablecom prohibits NTL Incorporated from paying dividends,
subject to some limited exceptions.
NTL Incorporated has never paid cash dividends on its common stock. In
addition, the payment of any dividends by NTL Incorporated in the future will be
at the discretion of its board of directors and will depend upon, among other
things, future earnings, operations, capital requirements, its general financial
condition and the general financial condition of its subsidiaries.
THE MARKET PRICE OF NTL INCORPORATED'S COMMON STOCK AND THE CONVERTIBLE NOTES IS
SUBJECT TO VOLATILITY
The market price of NTL Incorporated's common stock has been subject to
volatility and, in the future, the market price of NTL Incorporated's common
stock and the convertible notes could be subject to wide fluctuations in
response to numerous factors, many of which are beyond our control. These
factors include, among other things, actual or anticipated variations in our
operating results, our earnings releases and our competitors' earnings releases,
announcements of technological innovations, changes in financial estimates by
securities analysts, market conditions in the industry and the general state of
the securities markets, governmental legislation or regulation, currency and
exchange rate fluctuations, as well as general economic and market conditions,
such as recessions.
LACK OF PUBLIC MARKET FOR THE CONVERTIBLE NOTES
There has been no public market for the convertible notes. The registration
rights agreement does not obligate us to keep the registration statement of
which this prospectus forms a part effective beyond December 22, 2001 except in
limited circumstances. Although the initial purchasers of the convertible notes
have advised us that they currently intend to continue to make a market in the
convertible notes, they are not obligated to do so and any such market making
may be discontinued at any time without notice. Accordingly, there can be no
assurance as to the ongoing development or liquidity of any market that may
develop for the convertible notes.
11
<PAGE> 15
YOU SHOULD BE AWARE THAT ACTUAL RESULTS MAY TURN OUT TO BE MATERIALLY DIFFERENT
FROM ANY FORWARD-LOOKING STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS
This prospectus includes or incorporates by reference projections of
broadcast transmission revenues, build-out results and other forward-looking
statements, including those using words such as "believe," "anticipate,"
"should," "intend," "plan," "will," "expects," "estimates," "projects,"
"positioned," "strategy," and similar expressions. In reviewing information
included or incorporated by reference in this offering memorandum, keep in mind
that actual results may differ materially from those expressed or implied in
those projections and forward-looking statements. Important assumptions and
factors that could cause actual results to differ materially from those
contemplated or projected, forecast, estimated or budgeted in or expressed or
implied by those projections and forward-looking statements include those
specified in this Risk Factors section, as well as:
- industry trends,
- our ability to
-- continue to design network routes and install facilities,
-- obtain and maintain any required government licenses or
approvals, and
-- finance construction and development,
all in a timely manner, at reasonable costs and on satisfactory terms and
conditions,
- assumptions about
-- customer acceptance,
-- churn rates,
-- overall market penetration and competition from providers of
alternative services and
-- availability, terms and deployment of capital.
We assume no obligation to update projections or other forward-looking
statements to reflect actual funding requirements, capital expenditures and
results, changes in assumptions or in the factors affecting these projections or
other forward-looking statements. We cannot assure you that:
- any financings will be obtained when required, on acceptable terms or at
all,
- actual amounts required to complete our planned build out will not exceed
the amount we estimate (see "-- The anticipated construction costs of our
network will increase as a result of our recent acquisitions and will
require substantial amounts of additional funding") or that additional
financing substantially in excess of that amount will not be required,
- we will not acquire franchises, licenses or other new businesses that
would require additional capital,
- operating cash flow will meet expectations or that we will be able to
access such cash from our subsidiaries' operations to meet any unfunded
portion of our capital requirements when required or to satisfy the terms
of the notes, or our other debt instruments and agreements for the
incurrence of additional debt financing (see "-- NTL Incorporated and NTL
(Delaware), Inc. are holding companies that are
12
<PAGE> 16
dependent upon cash flow from their subsidiaries to meet their
obligations -- their ability to access that cash flow may be limited in
some circumstances"),
- we will not incur losses from our exposure to exchange rate fluctuations
or be adversely affected by interest rate fluctuations (see "-- We are
subject to currency risk because we obtain a substantial amount of
financing in US dollars but generally generate revenues and incur
expenses in other currencies"),
- there will not be adverse changes in applicable United States, United
Kingdom, Australian, Irish, French, Swiss or Bermuda tax laws, or
- the future effects of monetary union in Europe will not be materially
adverse to us.
All forward-looking statements included or incorporated by reference in this
prospectus are expressly qualified by the considerations described above.
13
<PAGE> 17
USE OF PROCEEDS
The selling securityholders will receive all of the proceeds from the sale
of the securities sold using this prospectus. Neither NTL (Delaware), Inc. nor
NTL Incorporated will receive any of the proceeds from sales by the selling
securityholders of the offered securities.
14
<PAGE> 18
DESCRIPTION OF THE CONVERTIBLE NOTES
In this "Description of the Convertible Notes" section, the terms "NTL
Incorporated" and "NTL (Delaware), Inc." refer to NTL Incorporated and NTL
(Delaware), Inc., as the case may be, only and not to any of their respective
subsidiaries.
GENERAL
The convertible notes were issued pursuant to an indenture dated as of
December 22, 1999, between NTL (Delaware), Inc. and The Chase Manhattan Bank, as
trustee, as supplemented by the first supplemental indenture dated as of May 17,
2000, between NTL (Delaware), Inc., NTL Incorporated and The Chase Manhattan
Bank, as trustee. The first supplemental indenture and the registration rights
agreement are filed as exhibits to the registration statement of which this
prospectus forms a part. The indenture is incorporated by reference to the
registration statement of which this prospectus forms a part from NTL
(Delaware), Inc.'s Annual Report on Form 10-K for the year ended December 31,
1999. The following summary of selected provisions of the convertible notes, the
indenture, as supplemented, and the registration rights agreement is qualified
in its entirety by reference to the provisions of those documents. The
definitions of selected terms used in the following summary are set forth below
under "-- Definitions."
The convertible notes are general unsecured obligations of NTL Incorporated
and NTL (Delaware), Inc., subordinated in right of payment to all existing and
future Senior Debt of NTL Incorporated and NTL (Delaware), Inc. as described
under "-- Subordination of Convertible Notes" and convertible into common stock
of NTL Incorporated as described under "-- Conversion." The indenture does not
contain any financial covenants or restrictions on the payment of dividends, the
incurrence of Senior Debt or issuance or repurchase of securities of NTL
Incorporated and NTL (Delaware), Inc. The indenture contains no covenants or
other provisions to afford protection to holders of the convertible notes in the
event of a highly leveraged transaction or a change in control of NTL
Incorporated and NTL (Delaware), Inc. except to the extent described under
"-- Repurchase at the Option of Holders."
The operations of NTL Incorporated and NTL (Delaware), Inc. are conducted
through their subsidiaries, partnerships and joint ventures and, as a result,
NTL Incorporated and NTL (Delaware), Inc. are dependent upon the cash flow of
their subsidiaries, partnerships and affiliated joint ventures to meet their
obligations, including their obligations under the convertible notes. As a
result, the convertible notes are effectively subordinated to all existing and
future liabilities of NTL Incorporated's and NTL (Delaware), Inc.'s
subsidiaries, partnerships and affiliated joint ventures, including trade
payables.
Application will be made to list the convertible notes on the Luxembourg
Stock Exchange.
15
<PAGE> 19
PRINCIPAL, MATURITY AND INTEREST
The convertible notes are limited to $1,200,000,000 aggregate principal
amount. The convertible notes bear interest from December 22, 1999 at the rate
of 5 3/4% per annum and mature on December 15, 2009.
Interest on the convertible notes is payable semiannually on June 15 and
December 15 of each year (each an "Interest Payment Date"), commencing on June
15, 2000, to holders of record at the close of business on June 1 or December 1
(each a "Regular Record Date") immediately preceding such Interest Payment Date.
Interest is computed on the basis of a 360-day year comprised of twelve 30-day
months.
Interest on the convertible notes accrues from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
original issuance.
The convertible notes are payable as to principal, interest and Liquidated
Damages, if any, at the office or agency of NTL (Delaware), Inc. maintained for
that purpose within the City and State of New York or, at the option of NTL
(Delaware), Inc. payment of interest may be made by check mailed to the holders
of the convertible notes at their respective addresses set forth in the register
of holders of convertible notes. A holder of convertible notes with an aggregate
principal amount of convertible notes in excess of $5,000,000 will be paid by
wire transfer in immediately available funds at the election of the holder if
the holder previously specified in writing to NTL (Delaware), Inc. and the
paying agent wire transfer instructions. Until otherwise designated by NTL
(Delaware), Inc., NTL (Delaware), Inc.'s office or agency in New York will be
the office of the trustee maintained for such purpose. In addition, as described
under the caption "Listing," if and so long as the convertible notes are listed
on the Luxembourg Stock Exchange, an agent for making payments on, and transfers
of, convertible notes will be maintained in Luxembourg. The convertible notes
were issued in registered form, without coupons, and in denominations of $1,000
and integral multiples of $1,000.
OPTIONAL REDEMPTION
Provisional Redemption
At any time on or prior to December 18, 2002 (the "Provisional Redemption
Date"), NTL (Delaware), Inc. may redeem the convertible notes, in whole or in
part (the "Provisional Redemption"), at the following redemption prices if the
"Daily Market Price" (as defined below) of the common stock equals or exceeds
the following trigger percentages of the prevailing conversion price (as
described below) then in effect for at least 20 trading days in any consecutive
30-day trading period ending on the trading day prior to the date of mailing of
the notice of Provisional Redemption (the "Notice
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<PAGE> 20
Date"), if called for redemption in the 12-month period ending on December 15 in
the case of 2000 or 2001 and December 18 in the case of 2002:
<TABLE>
<CAPTION>
TRIGGER REDEMPTION
YEAR PERCENTAGE PRICE
---- ---------- ----------
<S> <C> <C>
2000.......................................... 170% 105.750%
2001.......................................... 160% 105.175%
2002.......................................... 150% 104.600%
</TABLE>
Upon any provisional redemption, we will make an additional payment in cash
(the "make-whole payment") with respect to the convertible notes converted into
common stock between the Notice Date and the Provisional Redemption Date. The
make-whole payment will be equal to the sum of the aggregate amount of interest
payments that would otherwise have accrued from the Provisional Redemption Date
through December 18, 2002 (the "make-whole period").
Subsequent Optional Redemption
Except as referred to in this prospectus under "-- Optional Tax
Redemption," the convertible notes are redeemable, in whole or from time to time
in part in any integral multiple of $1,000, at the option of NTL (Delaware),
Inc. at any time after December 18, 2002, at the following redemption prices
which are expressed as percentages of the principal amount set forth below, upon
not less than 30 nor more than 60 days' prior notice, if redeemed during the
12-month period beginning December 15 of the years indicated (or December 18 in
the case of 2002):
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2002...................................................... 104.025%
2003...................................................... 103.450%
2004...................................................... 102.875%
2005...................................................... 102.300%
2006...................................................... 101.725%
2007...................................................... 101.150%
2008...................................................... 100.575%
2009 and after............................................ 100.000%
</TABLE>
In the case of a redemption of any convertible notes referred to under
"-- Optional Tax Redemption," redemption of such convertible notes shall be made
at the principal amount of these convertible notes together with accrued and
unpaid interest and liquidated damages, if any, to the applicable redemption
date.
OPTIONAL TAX REDEMPTION
The convertible notes may be redeemed at the option of NTL (Delaware),
Inc., in whole but not in part, upon not less than 30 nor more than 60 days'
prior notice, at any time at a redemption price equal to the principal amount of
the convertible notes together with accrued and unpaid interest to the date
fixed for redemption if after the date on which the provisions described under
"-- Additional Amounts" become applicable (the "Relevant Date") there has
occurred any change in or amendment to
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<PAGE> 21
the laws (or any regulations or official rulings promulgated thereunder) of the
United Kingdom, the Netherlands, Netherlands Antilles, Bermuda or the Cayman
Islands, (or any political subdivision or taxing authority thereof or therein),
or any change in or amendment to the official application or interpretation of
such laws, regulations or rulings (a "Change in Tax Law") which becomes
effective after the Relevant Date, as a result of which the Company is or would
be so required on the next succeeding Interest Payment Date to pay Additional
Amounts with respect to the Convertible Notes with respect to withholding taxes
imposed by the United Kingdom, the Netherlands, Netherlands Antilles, Bermuda or
the Cayman Islands, (or any political subdivision or taxing authority thereof or
therein)(a "Withholding Tax") and such Withholding Tax is imposed at a rate that
exceeds the rate (if any) at which Withholding Tax was imposed on the Relevant
Date; provided, however, that
(1) this paragraph shall not apply to the extent that, at the Relevant
Date it was known or would have been known had professional advice
of a nationally recognized accounting firm in the United Kingdom,
the Netherlands, Netherlands Antilles, Bermuda or the Cayman
Islands, as the case may be, been sought, that a Change in Tax Law
in the United Kingdom, the Netherlands, Netherlands Antilles,
Bermuda or the Cayman Islands, was to occur after the Relevant
Date,
(2) no such notice of redemption may be given earlier than 90 days
prior to the earliest date on which NTL (Delaware), Inc. would be
obliged to pay such Additional Amounts were a payment in respect of
the convertible notes then due,
(3) at the time such notice of redemption is given, such obligation to
pay such Additional Amounts remains in effect and
(4) the payment of such Additional Amounts cannot be avoided by the use
of any reasonable measures available to NTL (Delaware), Inc.
The convertible notes may also be redeemed, in whole but not in part, at
any time at a redemption price equal to the principal amount of the convertible
notes plus accrued and unpaid interest and liquidated damages, if any, to the
date fixed for redemption if the person formed after the Relevant Date by a
consolidation, amalgamation, reorganization or reconstruction or other similar
arrangement of NTL (Delaware), Inc. or the person into which NTL (Delaware),
Inc. is merged after the Relevant Date or to which NTL (Delaware), Inc. conveys,
transfers or leases its properties and assets after the Relevant Date
substantially as an entirety (collectively, a "Subsequent Consolidation") is
required, as a consequence of such Subsequent Consolidation and as a consequence
of a Change in Tax Law in the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands occurring after the date of such
Subsequent Consolidation to pay Additional Amounts with respect to Withholding
Tax on the convertible notes and such Withholding Tax is imposed at a rate that
exceeds the rate (if any) at which Withholding Tax was or would have been
imposed on the date of such Subsequent Consolidation; provided, however, that
this paragraph shall not apply to the extent that, at the date of such
Subsequent Consolidation it was known or would
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<PAGE> 22
have been known had professional advice of a nationally recognized accounting
firm in the United Kingdom been sought, that a Change in Tax Law in the United
Kingdom, the Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands was to occur after such date. NTL (Delaware), Inc. will also pay, or
make available for payment, to holders on the redemption date any Additional
Amounts (as described, but subject to the exceptions referred to, under
"Additional Amounts") resulting from the payment of such redemption price.
MANDATORY REDEMPTION
Except as set forth below under "Repurchase at the Option of Holders," NTL
(Delaware), Inc. is not required to make mandatory redemption or sinking fund
payments with respect to the convertible notes.
REPURCHASE AT THE OPTION OF HOLDERS
Upon the occurrence of a Change of Control, each holder of convertible
notes shall have the right to require NTL Incorporated and (Delaware), Inc. to
repurchase all or any part, equal to $1,000 or an integral multiple of $1,000,
of such holder's convertible notes pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price equal to 101% of the principal
amount thereof, plus accrued and unpaid interest if any, on those convertible
notes to the Change of Control Payment Date (the "Change of Control Payment").
Within 40 days following any Change of Control, NTL (Delaware), Inc. shall mail
a notice to each holder stating:
(1) that the Change of Control Offer is being made pursuant to the
covenant entitled "Change of Control" and that all convertible
notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no earlier
than 30 days nor later than 40 days from the date such notice is
mailed (the "Change of Control Payment Date");
(3) that any convertible notes not tendered will continue to accrue
interest;
(4) that, unless NTL Incorporated and NTL (Delaware), Inc. default in
the payment of the Change of Control Payment, all convertible notes
accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that holders electing to have any convertible notes purchased
pursuant to a Change of Control Offer will be required to surrender
the convertible notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the convertible notes completed,
to the paying agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that holders will be entitled to withdraw their election if the
paying agent receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex,
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<PAGE> 23
facsimile transmission or letter setting forth the name of the
holder, the principal amount of convertible notes delivered for
purchase, and a statement that such holder is withdrawing his
election to have such convertible notes purchased; and
(7) that holders whose convertible notes are being purchased only in
part will be issued new convertible notes equal in principal amount
to the unpurchased portion of the convertible notes surrendered,
which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple of $1,000.
NTL Incorporated and NTL (Delaware), Inc. will comply with the requirements
of Rules 13e-4 and 14e-1 under the Exchange Act, and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the convertible notes in
connection with a Change of Control.
On the Change of Control Payment Date, NTL Incorporated and NTL (Delaware),
Inc. will, to the extent lawful,
(1) accept for payment convertible notes or portions thereof tendered
pursuant to the Change of Control Offer,
(2) deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all convertible notes or portions
thereof so tendered and
(3) deliver or cause to be delivered to the trustee the convertible
notes so accepted together with an Officers' Certificate stating
the convertible notes or portions thereof tendered to NTL
(Delaware), Inc. The paying agent shall promptly mail to each
holder of convertible notes so accepted for payment (or, if such
holder of convertible notes holds an aggregate principal amount in
excess of $5,000,000 will be paid by wire transfer in immediately
available funds at the election of such holder if such holder
previously specified in writing to NTL and the paying agent) an
amount equal to the purchase price for such convertible notes, and,
if the convertible notes are in certificated form, payment may be
made at the office of the paying agent in Luxembourg. The trustee
shall promptly authenticate and mail to each holder a new
convertible note equal in principal amount to any unpurchased
portion of the convertible notes surrendered, if any; provided that
each such new convertible note shall be in a principal amount of
$1,000 or an integral multiple of $1,000. NTL (Delaware), Inc. will
publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
Except as described above with respect to a Change of Control, the
indenture does not contain any other provisions that permit the holders of the
convertible notes to require that NTL (Delaware), Inc. repurchase or redeem the
convertible notes in the
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<PAGE> 24
event of a takeover, recapitalization or similar restructuring. Although the
indenture contains several covenants, including the provision described under
"-- Merger, Consolidation or Sale of Assets" below, the provisions of the
indenture may not necessarily afford holders of the convertible notes protection
in the event of a highly leveraged transaction, reorganization, restructuring,
merger or similar transaction involving NTL Incorporated or NTL (Delaware), Inc.
that may adversely affect the holders of the convertible notes.
The Change of Control Offer requirement of the convertible notes may in
some circumstances make more difficult or discourage a takeover of NTL
(Delaware), Inc., and, as a result, the removal of incumbent management. The
Change of Control Offer requirement, however, is not the result of management's
knowledge of any specific effort to accumulate NTL Incorporated stock or to
obtain control of NTL (Delaware), Inc. by means of a merger, tender offer,
solicitation or otherwise, or part of a plan by management to adopt a series of
antitakeover provisions. Instead, the Change of Control Offer requirement is a
result of negotiations between NTL (Delaware), Inc. and the initial purchasers.
Management has no present intention to engage in a transaction involving a
Change of Control, although it is possible that NTL Incorporated or NTL
(Delaware), Inc. would decide to do so in the future. Subject to the limitations
discussed below, NTL Incorporated or NTL (Delaware), Inc. could, in the future,
enter into transactions, including acquisitions, refinancings or other
recapitalizations, that would not constitute a Change of Control under the
indenture, but that could increase the amount of indebtedness outstanding at
such time or otherwise affect NTL Incorporated's or NTL (Delaware), Inc.'s
capital structure or credit ratings.
Change of control provisions are contained in each of the indentures for
NTL Communications' notes, NTL Incorporated and NTL (Delaware), Inc.'s
convertible notes. The Partners 11.20% Debentures also contain change of control
provisions.
NTL Incorporated's and NTL (Delaware), Inc.'s ability to pay cash to the
holders of convertible notes pursuant to a Change of Control Offer may be
limited by NTL Incorporated's and NTL (Delaware), Inc.'s then existing financial
resources. Future credit agreements or other agreements relating to indebtedness
of NTL Incorporated and NTL (Delaware), Inc. may contain prohibitions or
restrictions on NTL Incorporated's and NTL (Delaware), Inc.'s ability to effect
a Change of Control Payment. In the event a Change of Control occurs at a time
when such prohibitions or restrictions are in effect, NTL Incorporated and NTL
(Delaware), Inc. could seek the consent of its lenders to the purchase of the
convertible notes and other indebtedness containing change of control provisions
or could attempt to refinance the borrowings that contain such prohibition. If
NTL Incorporated and NTL (Delaware), Inc. do not obtain such a consent or repay
such borrowings, NTL Incorporated and NTL (Delaware), Inc. will be effectively
prohibited from purchasing the convertible notes. In such case, NTL
Incorporated's and NTL (Delaware), Inc.'s failure to purchase tendered
convertible notes would constitute an Event of Default under the indenture.
Moreover, the events that constitute a Change of Control under the indenture
constitute events of default under future debt instruments or credit agreements
of NTL Incorporated and NTL
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<PAGE> 25
(Delaware), Inc. or their subsidiaries. Such events of default may permit the
lenders under such debt instruments or credit agreements to accelerate the debt
and, if such debt is not paid or repurchased, to enforce their security
interests in what may be all or substantially all of the assets of NTL
Incorporated's and NTL (Delaware), Inc.'s subsidiaries. Any such enforcement may
limit NTL Incorporated's and NTL (Delaware), Inc.'s ability to raise cash to
repay or repurchase the convertible notes.
For the reasons described in the three immediately preceding paragraphs,
there can be no assurance that NTL Incorporated and NTL (Delaware), Inc. will be
able to repurchase the convertible notes upon a Change of Control.
The board of directors of NTL Incorporated and NTL (Delaware), Inc. may
not, by itself, waive or modify the Change of Control provisions of the
indenture. All the provisions of the indenture, including the Change of Control
provision, may only be waived or modified pursuant to the provisions described
under "-- Amendment, Supplement and Waiver" below.
SELECTION AND NOTICE
If less than all of the convertible notes are to be redeemed at any time,
selection of convertible notes for redemption will be made by the trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the convertible notes are listed, or, if the convertible notes
are not so listed, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate, provided that no convertible notes of $1,000 or
less shall be redeemed in part. Notice of redemption shall be mailed by first
class mail at least 30 but not more than 60 days, prior to the redemption date
to each holder of convertible notes to be redeemed at its registered address,
and, if and so long as the convertible notes are listed on the Luxembourg Stock
Exchange, publish a notice in a leading newspaper with circulation in
Luxembourg. If any convertible note is to be redeemed in part only, the notice
of redemption that relates to such convertible note shall state the portion of
the principal amount thereof to be redeemed. A new convertible note in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
holder thereof upon cancellation of the original convertible note. On and after
the redemption date, interest ceases to accrue on convertible notes or portions
of them called for redemption.
CONVERSION
The holder of any convertible note will have the right, exercisable at any
time after 90 days following the date of original issuance of that convertible
note and prior to maturity, to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $1,000) into shares of NTL
Incorporated common stock at a conversion price of $108.184 per share of common
stock, subject to adjustment as described below (the "Conversion Price"), except
that if a convertible note is called for redemption, the conversion right will
terminate at the close of business on the business day immediately preceding the
date fixed for redemption. Upon conversion, no adjustment or payment will be
made for interest, but if any holder surrenders a
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<PAGE> 26
convertible note for conversion after the close of business on the record date
for the payment of an installment of interest and prior to the opening of
business on the next interest payment date, then, notwithstanding such
conversion, the interest payable on such interest payment date will be paid to
the registered holder of such convertible note on such record date. In such
event, such convertible note, when surrendered for conversion, need not be
accompanied by payment of an amount equal to the interest payable on such
interest payment date on the portion so converted. No fractional shares will be
issued upon conversion but a cash adjustment will be made for any fractional
interest.
The Conversion Price is subject to adjustment upon the occurrence of
certain events, including:
(1) the issuance of shares of common stock as a dividend or
distribution on the common stock;
(2) the subdivision or combination of the outstanding common stock;
(3) the issuance to substantially all holders of common stock of rights
or warrants to subscribe for or purchase common stock (or
securities convertible into common stock) at a price per share less
than the then current market price per share, as defined;
(4) the distribution of shares of capital stock of NTL Incorporated
(other than common stock), evidences of indebtedness or other
assets (excluding dividends in cash, except as described in clause
(5) below) to all holders of common stock;
(5) the distribution, by dividend or otherwise, of cash to all holders
of common stock in an aggregate amount that, together with the
aggregate of any other distributions of cash that did not trigger a
Conversion Price adjustment to all holders of its common stock
within the 12 months preceding the date fixed for determining the
stockholders entitled to such distribution and all Excess Payments
in respect of each tender offer or other negotiated transaction by
NTL Incorporated or any of its Subsidiaries for common stock
concluded within the preceding 12 months not triggering a
conversion price adjustment, exceeds 10% of the product of the
current market price per share (determined as set forth below) on
the date fixed for the determination of stockholders entitled to
receive such distribution times the number of shares of common
stock outstanding on such date;
(6) payment of an Excess Payment in respect of a tender offer or other
negotiated transaction by NTL Incorporated or any of its
subsidiaries for common stock, if the aggregate amount of such
Excess Payment, together with the aggregate amount of cash
distributions made within the preceding 12 months not triggering a
conversion price adjustment and all Excess Payments in respect of
each tender offer or other negotiated transaction by NTL
Incorporated or any of its subsidiaries for common stock concluded
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<PAGE> 27
within the preceding 12 months not triggering a conversion price
adjustment, exceeds 10% of the product of the current market price
per share on the expiration of such tender offer times the number
of shares of common stock outstanding on such date; and
(7) the distribution to substantially all holders of common stock of
rights or warrants to subscribe for securities (other than those
referred to in clause (3) above).
In the event of a distribution to substantially all holders of common stock
of rights to subscribe for additional shares of NTL Incorporated's capital stock
(other than those referred to in clause (3) above), NTL Incorporated may,
instead of making any adjustment in the Conversion Price, make proper provision
so that each holder of a convertible note who converts such convertible note
after the record date for such distribution and prior to the expiration or
redemption of such rights shall be entitled to receive upon such conversion, in
addition to shares of common stock, an appropriate number of such rights. No
adjustment of the Conversion Price will be made until cumulative adjustments
amount to one percent or more of the Conversion Price as last adjusted.
If NTL Incorporated reclassifies or changes its outstanding common stock,
or consolidates with or merges into or transfers or leases all or substantially
all of its assets to any person, or is a party to a merger that reclassifies or
changes its outstanding common stock, the convertible notes will become
convertible into the kind and amount of securities, cash or other assets which
the holders of the convertible notes would have owned immediately after the
transaction if the holders had converted the convertible notes immediately
before the effective date of the transaction.
The indenture also provides that if rights, warrants or options expire
unexercised the Conversion Price shall be readjusted to take into account the
actual number of such warrants, rights or options which were exercised.
In the indenture, the "current market price" per share of common stock on
any date shall be deemed to be the average of the Daily Market Prices for the
shorter of
(1) 30 consecutive business days ending on the last full trading day on
the exchange or market referred to in determining such Daily Market
Prices prior to the time of determination (as defined in the
indenture) or
(2) the period commencing on the date next succeeding the first public
announcement of the issuance of such rights or warrants or such
distribution through such last full trading day prior to the time
of determination.
NTL Incorporated is permitted to make such reductions in the Conversion
Price as it, in its discretion, determines to be advisable in order that any
stock dividend, subdivision of shares, distribution or rights to purchase stock
or securities or distribution of securities convertible into or exchangeable for
stock made by NTL Incorporated to its stockholders will not be taxable to the
recipients.
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SUBORDINATION OF CONVERTIBLE NOTES
The convertible notes are subordinate in right of payment to all existing
and future Senior Debt. The indenture does not restrict the amount of Senior
Debt or other Indebtedness of NTL Incorporated and NTL (Delaware), Inc. or any
Subsidiary of NTL Incorporated or NTL (Delaware), Inc.
The payment of the principal of, interest on or any other amounts due on
the convertible notes is subordinated in right of payment to the prior payment
in full of all Senior Debt of NTL Incorporated or NTL (Delaware), Inc. No
payment on account of principal of, redemption of, interest on or any other
amounts due on the convertible notes, including, without limitation, any
payments on the Change of Control Offer, and no redemption, purchase or other
acquisition of the convertible notes may be made unless
(1) full payment of amounts then due on all Senior Debt have been made
or duly provided for pursuant to the terms of the instrument
governing such Senior Debt, and
(2) at the time for, or immediately after giving effect to, any such
payment, redemption, purchase or other acquisition, there shall not
exist under any Senior Debt or any agreement pursuant to which any
Senior Debt has been issued, any default which shall not have been
cured or waived and which shall have resulted in the full amount of
such Senior Debt being declared due and payable.
In addition, the indenture provides that if any of the holders of any issue
of Senior Debt notify (the "Payment Blockage Notice") NTL (Delaware), Inc. and
the trustee that a default has occurred giving the holders of such Senior Debt
the right to accelerate the maturity thereof, no payment on account of
principal, redemption, interest, liquidated damages, if any, or any other
amounts due on the convertible notes and no purchase, redemption or other
acquisition of the convertible notes will be made for the period (the "Payment
Blockage Period") commencing on the date notice is received and ending on the
earlier of
(A) the date on which such event of default shall have been cured or
waived or
(B) 180 days from the date notice is received.
Notwithstanding the foregoing, only one Payment Blockage Notice with
respect to the same event of default or any other events of default existing and
known to the person giving such notice at the time of such notice on the same
issue of Senior Debt may be given during any period of 360 consecutive days
unless such event of default or such other events of default have been cured or
waived for a period of not less than 90 consecutive days. No new Payment
Blockage Period may be commenced by the holders of Senior Debt during any period
of 360 consecutive days unless all events of default which triggered the
preceding Payment Blockage Period have been cured or waived.
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Upon any distribution of its assets in connection with any dissolution,
winding-up, liquidation or reorganization of NTL Incorporated or NTL (Delaware),
Inc. or acceleration of the principal amount due on the convertible notes
because of an Event of Default, all Senior Debt must be paid in full before the
holders of the convertible notes are entitled to any payments whatsoever.
As a result of these subordination provisions, in the event of NTL
Incorporated's or NTL (Delaware), Inc.'s insolvency, holders of the convertible
notes may recover ratably less than general creditors of NTL Incorporated or NTL
(Delaware), Inc.
If payment of the convertible notes is accelerated because of an Event of
Default, NTL (Delaware), Inc. or the trustee shall promptly notify the holders
of Senior Debt or the trustee(s) for such Senior Debt of the acceleration. NTL
Incorporated or NTL (Delaware), Inc. may not pay the convertible notes until
five days after such holders or trustee(s) of Senior Debt receive notice of such
acceleration and, thereafter, may pay the convertible notes only if the
subordination provisions of the Indenture otherwise permit payment at that time.
The convertible notes are obligations exclusively of NTL Incorporated and
NTL (Delaware), Inc. Since the operations of NTL Incorporated and NTL
(Delaware), Inc. are conducted through their Subsidiaries, the cash flow and the
consequent ability to service debt, including the convertible notes, of NTL
Incorporated and NTL (Delaware), Inc., are, in part, dependent upon the earnings
of their Subsidiaries and the distribution of those earnings to, or upon loans
or other payments of funds by those Subsidiaries to, NTL Incorporated and NTL
(Delaware), Inc.. The payment of dividends and the making of loans and advances
to NTL Incorporated and NTL (Delaware), Inc. by their Subsidiaries may be
subject to statutory or contractual restrictions, are dependent upon the
earnings of those Subsidiaries and are subject to various business
considerations.
Any right of NTL Incorporated or NTL (Delaware), Inc. to receive assets of
any of its Subsidiaries upon their liquidation or reorganization (and the
consequent right of the holders of the convertible notes to participate in those
assets) will be effectively subordinated to the claims of that Subsidiary's
creditors (including trade creditors), except to the extent that NTL
Incorporated or NTL (Delaware), Inc. is itself recognized as a creditor of such
Subsidiary, in which case the claims of NTL Incorporated or NTL (Delaware), Inc.
would still be subordinate to any security interests in the assets of such
Subsidiary and any indebtedness of such Subsidiary senior to that held by NTL
Incorporated or NTL (Delaware), Inc.
The indenture will not limit the amount of additional indebtedness,
including Senior Debt, which NTL Incorporated or NTL (Delaware), Inc. can
create, incur, assume or guarantee, nor will the indenture limit the amount of
indebtedness and other liabilities which any Subsidiary of NTL Incorporated or
NTL (Delaware), Inc. can create, incur, assume or guarantee.
In the event that, notwithstanding the foregoing, the trustee or any holder
of convertible notes receives any payment or distribution of assets of NTL
Incorporated or
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NTL (Delaware), Inc. of any kind in contravention of any of the terms of the
indenture, whether in cash, property or securities, including, without
limitation by way of set-off or otherwise, in respect of the convertible notes
before all Senior Debt is paid in full, then such payment or distribution will
be held by the recipient in trust for the benefit of holders of Senior Debt, and
will be immediately paid over or delivered to the holders of Senior Debt or
their representative or representatives to the extent necessary to make payment
in full of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution, or provision therefor, to or for the holders
of Senior Debt.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The indenture provides that NTL (Delaware), Inc. may not consolidate or
merge with or into (whether or not NTL (Delaware), Inc. is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets in one or more related
transactions to another corporation, person or entity unless
(1) NTL (Delaware), Inc. is the surviving corporation or the entity or
the person formed by or surviving any such consolidation or merger
(if other than NTL (Delaware), Inc.) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall
have been made is a corporation organized or existing under the
laws of the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda, the Cayman Islands or of the United States, any
state thereof or the District of Columbia;
(2) the entity or person formed by or surviving any such consolidation
or merger (if other than NTL (Delaware), Inc.) or the entity or
person to which such sale, assignment, transfer, lease, conveyance
or other disposition will have been made assumes all the
Obligations (including the due and punctual payment of Additional
Amounts if the surviving corporation is a corporation organized or
existing under the laws of the United Kingdom, the Netherlands, the
Netherlands Antilles, Bermuda or the Cayman Islands) of NTL
(Delaware), Inc. under the convertible notes and the indenture,
pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists;
(4) NTL (Delaware), Inc. or any entity or person formed by or surviving
any such consolidation or merger or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been
made will have a ratio of Indebtedness to Annualized Pro Forma
EBITDA equal to or less than the ratio of Indebtedness to
Annualized Pro Forma EBITDA of NTL (Delaware), Inc. immediately
preceding the transaction; provided, however, that, if the ratio of
Indebtedness to Annualized Pro Forma EBITDA of NTL (Delaware), Inc.
immediately preceding such transaction is 6:1 or less, then the
ratio of Indebtedness to Annualized Pro Forma EBITDA of NTL
(Delaware), Inc. may be 0.5 greater than such ratio immediately
preceding such transaction; and
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(5) such transaction would not result in the loss of any material
authorization or Material License of NTL (Delaware), Inc. or its
Subsidiaries.
For all purposes of the indenture, the assignment of NTL (Delaware), Inc.'s
rights under the Transaction Agreement relating to the acquisition of CWC
ConsumerCo to a holding company of NTL (Delaware), Inc. shall be deemed not to
be a disposition of substantially all of the assets of NTL (Delaware), Inc.
ADDITIONAL AMOUNTS
The following provisions of this paragraph will apply only in the event
that NTL (Delaware), Inc. becomes, or a successor to NTL (Delaware), Inc. is, a
corporation organized or existing under the laws of the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands. All
payments made by NTL (Delaware), Inc. on the convertible notes will be made
without deduction or withholding, for or on account of, any and all present or
future taxes, duties, assessments, or governmental charges of whatever nature
unless the deduction or withholding of such taxes, duties, assessments or
governmental charges is then required by law. If any deduction or withholding
for or on account of any present or future taxes, assessments or other
governmental charges of the United Kingdom, the Netherlands, the Netherlands
Antilles, Bermuda or the Cayman Islands (or any political subdivision or taxing
authority thereof or therein) shall at any time be required in respect of any
amounts to be paid by NTL (Delaware), Inc. under the convertible notes, NTL
(Delaware), Inc. will pay or cause to be paid such additional amounts
("Additional Amounts") as may be necessary in order that the net amounts
received by a holder of a convertible note after such deduction or withholding
shall be not less than the amounts specified in such convertible note to which
such holder is entitled; provided, however, that NTL (Delaware), Inc. shall not
be required to make any payment of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge to the extent such
tax, assessment or other governmental charge would not have been
imposed but for
(1) the existence of any present or former connection between
such holder (or between a fiduciary, settlor, beneficiary,
member or shareholder of, or possessor of a power over, such
holder, if such holder is an estate, nominee, trust,
partnership or corporation), other than the holding of a
convertible note or the receipt of amounts payable in respect
of a convertible note and the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman
Islands or any political subdivision or taxing authority
thereof or therein, including, without limitation, such
holder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) being or having been a citizen or
resident thereof or being or having been present or engaged
in trade or business therein or having or having had a
permanent establishment therein or
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(2) the presentation of a convertible note (where presentation is
required) for payment on a date more than 30 days after the
date on which such payment became due and payable or the date
on which payment thereof is duly provided for, whichever
occurs later, except to the extent that the holder would have
been entitled to Additional Amounts had the convertible note
been presented on the last day of such period of 30 days;
(b) any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure to comply by the holder of a
convertible note, or, if different, the beneficial owner of the
interest payable on a convertible note, with a timely request of
NTL (Delaware), Inc. addressed to such holder or beneficial owner
to provide information, documents or other evidence concerning the
nationality, residence, identity or connection with the taxing
jurisdiction of such holder or beneficial owner which is required
or imposed by a statute, regulation or administrative practice of
the taxing jurisdiction a precondition to exemption from all or
part of such tax, assessment or governmental charge;
(c) any estate, inheritance, gift, sales, transfer, personal property
or similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental charge which is
collectible otherwise than by withholding from payments of
principal amount at maturity, redemption amount, Change of Control
Payment, interest with respect to a convertible note or withholding
from the proceeds of a sale or exchange of a convertible note;
(e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal amount
at maturity, redemption amount, Change of Control Payment or
interest with respect to a convertible note, if such payment can be
made, and is in fact made, without such withholding by any other
paying agent located inside the United States;
(f) any tax, assessment or other governmental charge imposed on a
holder that is not the beneficial owner of a convertible note to
the extent that the beneficial owner would not have been entitled
to the payment of any such Additional Amounts had the beneficial
owner directly held such convertible note; or
(g) any combination of items (a), (b), (c), (d), (e) and (f) above;
nor shall Additional Amounts be paid with respect to any payment of the
principal of, or any interest on, any convertible note to any holder who is a
fiduciary or partnership or other than the sole beneficial owner of such payment
to the extent that a beneficiary or settlor would not have been entitled to any
Additional Amounts had such beneficiary or settlor been the holder of such
convertible note. All references to interest on the
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<PAGE> 33
convertible notes in the indenture or the convertible notes shall include any
Additional Amounts payable by NTL (Delaware), Inc. pursuant to this paragraph.
REPORTS
Whether or not required by the rules and regulations of the Commission, so
long as any convertible notes are outstanding, NTL (Delaware), Inc. will file
with the Commission and furnish to the holders of the convertible notes all
quarterly and annual financial information required to be contained in a filing
with the Commission on Forms 10-Q and 10-K (or the equivalent thereof under the
Exchange Act for foreign private issuers in the event NTL (Delaware), Inc.
becomes a corporation organized under the laws of the United Kingdom, the
Netherlands, the Netherlands Antilles, Bermuda or the Cayman Islands), including
a "Management's Discussion and Analysis of Results of Operations and Financial
Condition" and with respect to the annual information only, a report thereon by
NTL (Delaware), Inc.'s certified independent accountants, in each case, as
required by the rules and regulations of the Commission as in effect on the
Issuance Date. NTL (Delaware), Inc. does not publish unconsolidated financial
reports.
EVENTS OF DEFAULT AND REMEDIES
The indenture provides that each of the following constitutes an Event of
Default:
(1) default for 30 days in the payment when due of interest (and
Additional Amounts, if applicable) on the convertible notes;
(2) default in payment when due of principal on the convertible notes;
(3) failure by NTL Incorporated or NTL (Delaware), Inc. to comply with
the provisions described under "-- Repurchase at the Option of the
Holders";
(4) failure by NTL (Delaware), Inc. and, as applicable, NTL
Incorporated, following 60 days after notice, to comply with
certain other covenants and agreements contained in the indenture
or the convertible notes;
(5) default (other than any default with respect to (a) any bank
facility at completion and (b) the sterling or US dollar
denominated bonds of Cable & Wireless Communications plc, in each
case, acquired in the acquisition by NTL Incorporated of CWC
ConsumerCo) under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by NTL (Delaware), Inc. or any
of its Restricted Subsidiaries (or the payment of which is
guaranteed by NTL (Delaware), Inc. or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists,
or is created after the Issuance Date, which default
(a) is caused by a failure to pay when due principal or interest
on such Indebtedness within the grace period provided in such
Indebtedness (which failure continues beyond any applicable
grace period) (a "Payment Default") or
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(b) results in the acceleration of such Indebtedness prior to its
express maturity and in each case, the principal amount of
any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so
accelerated, aggregates $10 million or more;
(6) failure by NTL (Delaware), Inc. or any Restricted Subsidiary of NTL
(Delaware), Inc. to pay final judgements (other than any judgment
as to which a reputable insurance company has accepted full
liability) aggregating in excess of $5 million, which judgments are
not stayed within 60 days after their entry;
(7) certain events of bankruptcy or insolvency with respect to the
Company or any of its Material Subsidiaries; and
(8) the revocation of a Material License.
If any Event of Default occurs and is continuing, the trustee or the
holders of at least 25% in principal amount of the then outstanding convertible
notes may declare all the convertible notes to be due and payable immediately,
subject to the provisions limiting payment described in "-- Subordination of
Convertible Notes." Notwithstanding the above, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with respect to
NTL (Delaware), Inc. or any Material Subsidiary, all outstanding convertible
notes will become due and payable without further action or notice. Holders of
the convertible notes may not enforce the indenture or the convertible notes
except as provided in the indenture. Subject to some limitations, holders of a
majority in principal amount of the then outstanding convertible notes may
direct the Trustee in its exercise of any trust or power. The trustee may
withhold from holders of the convertible notes notice of any continuing Default
or Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or liquidated damages, if any) if it determines
that withholding notice is in their interest.
The holders of a majority in aggregate principal amount of the convertible
notes then outstanding by notice to the trustee may on behalf of the holders of
all of the convertible notes waive any existing Default or Event of Default and
its consequences under the indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the convertible
notes.
NTL (Delaware), Inc. is required to deliver to the trustee annually a
statement regarding compliance with the indenture, and NTL (Delaware), Inc. is
required, upon becoming aware of any Default or Event of Default, to deliver to
the trustee a statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS
No director, officer, employee, incorporator or shareholder of NTL
Incorporated or NTL (Delaware), Inc., in their respective capacities, shall have
any liability for any Obligations of NTL Incorporated or NTL (Delaware), Inc.
under the convertible notes
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or the indenture or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each holder of the convertible notes by accepting
a convertible note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the convertible notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
BOOK-ENTRY, DELIVERY AND FORM
The convertible notes were originally issued in the form of one or more
Global Notes (the "Global Notes"). The Global Notes were deposited with or on
behalf of, DTC and registered in the name of DTC or its nominee (the "Global
Note Holder"). Except as set forth below, the Global Notes may be transferred,
in whole and not in part, only to DTC or another nominee of DTC. Investors may
hold their beneficial interests in the Global Notes directly through DTC if they
are Participants in such system or indirectly through organizations that are
Participants in such system such as Euroclear and Clearstream Banking, societe
anonyme ("Clearstream").
DTC is a limited purpose trust company that was created to hold securities
for its participating organizations (collectively, the "Participants" or "DTC's
Participants") and to facilitate the clearance and settlement of transactions in
such securities between Participants through electronic book-entry changes in
accounts of its Participants. DTC's Participants include securities brokers and
dealers (including the initial purchasers), banks and trust companies, clearing
corporations and certain other organizations. Access to the Depositary's system
is also available to other entities such as banks, brokers, dealers and trust
companies (collectively, the "Indirect Participants" or "DTC's Indirect
Participants") that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly. Persons who are not Participants may
beneficially own securities held by or on behalf of DTC only through DTC's
Participants or DTC's Indirect Participants.
We expect that pursuant to procedures established by DTC ownership of the
convertible notes evidenced by the Global Notes will be shown on, and the
transfer of ownership thereof will be effected only through, records maintained
by DTC (with respect to the interests of the Depositary's Participants), DTC's
Participants and DTC's Indirect Participants. Prospective purchasers are advised
that the laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer convertible notes evidenced by the Global Notes will be limited to that
extent.
Persons who beneficially own securities held by or on behalf of DTC through
Euroclear or Clearstream, Luxembourg will be subject to the procedures of such
Participant. We understand as follows with respect to Euroclear and Clearstream,
Luxembourg: Euroclear and Clearstream, Luxembourg each hold securities for their
account holders and facilitate the clearance and settlement of securities
transactions by electronic book-entry transfer between their respective account
holders. Euroclear and Clearstream, Luxembourg also deal with domestic
securities markets in several countries
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through established deposits and custodial relationships. Clearstream,
Luxembourg and Euroclear have established an electronic bridge between their two
systems across which their respective participants may settle trades with each
other. Euroclear and Clearstream, Luxembourg customers are world-wide financial
institutions including underwriters securities brokers and dealers, banks, trust
companies and clearing corporations. An account holder's overall contractual
relations with Euroclear and Clearstream, Luxembourg are governed by the
respective rules and operating procedures of Euroclear and Clearstream,
Luxembourg and any applicable laws. Euroclear and Clearstream, Luxembourg act
under such rules and operating procedures only on behalf of its account holders
and has no record of or relationship with any persons who are not direct account
holders.
Investors who hold accounts with Euroclear may acquire, hold and transfer
security entitlements with respect to Global Notes against Euroclear and its
respective property by book-entry to accounts with Euroclear, which has an
account with DTC and subject at all times to the procedures and requirements of
Euroclear. Investors who hold accounts with Clearstream, Luxembourg may acquire,
hold and transfer security entitlements with respect to Global Notes against
Clearstream, Luxembourg and its respective property by book-entry to accounts
with Clearstream, Luxembourg, which has an account with DTC and subject at all
times to the procedures and requirements of Clearstream, Luxembourg. "Security
entitlement" means the rights and property interests of an account holder
against its securities intermediary under applicable law in or with respect to a
security, including any ownership, co-ownership contractual or other rights.
So long as the Global Note Holder is the registered owner of any
convertible notes, the Global Note Holder will be considered the sole holder
under the indenture of any convertible notes evidenced by the Global Notes.
Beneficial owners of convertible notes evidenced by the Global Notes will not be
considered the owners or holders thereof under the indenture for any purpose
including with respect to the giving of any directions, instructions or
approvals to the Trustee thereunder. Neither we nor the trustee will have any
responsibility or liability for any aspect of the records of DTC or for
maintaining, supervising or reviewing any records of DTC relating to the
convertible notes.
Payments in respect of the principal of, interest and liquidated damages,
if any, on any convertible notes registered in the name of the Global Note
Holder on the applicable record date will be payable by the trustee to or at the
direction of the Global Note Holder in its capacity as the registered holder
under the indenture. Under the terms of the indenture, we and the trustee may
treat the persons in whose names convertible notes, including the Global Notes
are registered as the owners thereof for the purpose of receiving such payments.
Consequently, neither we nor the trustee has or will have any responsibility or
liability for the payment of such amounts to beneficial owners of convertible
notes (including principal, interest and liquidated damages, if any). We
believe, however, that it is currently the policy of DTC to immediately credit
the accounts of the relevant Participants with such payments, in amounts
proportionate to
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their respective holdings of beneficial interests in the relevant security as
shown on the records of DTC. Payments by DTC's Participants and DTC's Indirect
Participants to the beneficial owners of convertible notes will be governed by
standing instructions and customary practice and will be the responsibility of
DTC's Participants or DTC's Indirect Participants.
TRANSFER AND EXCHANGE
A holder may transfer or exchange convertible notes in accordance with the
indenture. The registrar and the trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and NTL
(Delaware), Inc. may require a holder to pay any taxes and fees required by law
or permitted by the indenture. NTL (Delaware), Inc. is not required to transfer
or exchange any convertible note selected for redemption. Also, NTL (Delaware),
Inc. is not required to transfer or exchange any convertible note for a period
of 15 days before a selection of convertible notes to be redeemed. All transfers
or exchanges of certificated convertible notes may be effected at the offices of
the transfer agent in Luxembourg.
The registered holder of a convertible note will be treated as the owner of
it for all purposes.
UNCLAIMED MONEY, PRESCRIPTION
If money deposited with the trustee or paying agent for the payment of
principal or interest remains unclaimed for two years, the trustee and the
paying agent shall pay the money back to NTL (Delaware), Inc. at its written
request. After that, holders of convertible notes entitled to the money must
look to NTL (Delaware), Inc. for payment unless an abandoned property law
designates another person and all liability of the trustee and such paying agent
shall cease. Other than as set forth in this paragraph, the indenture does not
provide for any prescription period for the payment of interest and principal on
the convertible notes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the indenture or
the convertible notes may be amended or supplemented with the consent of the
holders of at least a majority in principal amount of the then outstanding
convertible notes (including consents obtained in connection with a tender offer
or exchange offer for convertible notes), and any existing default or compliance
with any provision of the indenture or the convertible notes may be waived with
the consent of the holders of a majority in principal amount of the then
outstanding convertible notes (including consents obtained in connection with a
tender offer or exchange offer for convertible notes).
Without the consent of each holder affected, an amendment or waiver may not
(with respect to any convertible notes held by a nonconsenting holder of
convertible notes)
(1) reduce the principal amount of convertible notes whose holders must
consent to an amendment, supplement or wavier,
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(2) reduce the principal of or change the fixed maturity of any
convertible note or alter the provisions with respect to the
redemption of the convertible notes,
(3) reduce the rate of or change the time for payment of interest on
any convertible note,
(4) waive a default in the payment of principal of or interest on any
convertible notes (except a rescission of acceleration of the
convertible notes by the holders of at least a majority in
aggregate principal amount of the convertible notes and a waiver of
the payment default that resulted from such acceleration),
(5) make any convertible note payable in money other than that stated
in the convertible notes,
(6) make any change in the provisions of the indenture relating to
waivers of past Defaults or the rights of holders of convertible
notes to receive payments of principal of or interest on the
convertible notes,
(7) waive a redemption payment with respect to any convertible note,
(8) impair the right to convert the convertible notes into common
stock,
(9) modify the conversion or subordination provisions of the indenture
in a manner adverse to the holders of the convertible notes or
(10) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any holder of
convertible notes, NTL Incorporated, NTL (Delaware), Inc. and the trustee may
amend or supplement the indenture or the convertible notes to cure any
ambiguity, defect or inconsistency, to provide for uncertificated convertible
notes in addition to or in place of certificated convertible notes, to provide
for the assumption of NTL's (Delaware), Inc. obligations to holders of the
convertible notes in the case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the holders of the
convertible notes or that does not adversely affect the legal rights under the
indenture of any such holder, or to comply with requirements of the Commission
in order to maintain the qualification of the indenture under the Trust
Indenture Act.
NOTICES
Any notice or communication to a holder of convertible notes shall be
mailed by first-class mail to such holder's address as shown in the register
kept by the registrar. If a notice or communication is mailed in the manner
provided in the preceding sentence within the time period prescribed, it is duly
given, whether or not the addressee receives it. If the convertible notes are
listed on the Luxembourg Stock Exchange, NTL (Delaware), Inc. will publish a
notice in a daily newspaper with general circulation in Luxembourg.
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CONCERNING THE TRUSTEE
The indenture contains certain limitations on the rights of the trustee,
should it become a creditor of NTL (Delaware), Inc., to obtain payment of claims
in certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The trustee will be permitted to engage in
other transactions; however, if it acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue or resign.
The indenture will provide that the holders of a majority in principal
amount of the then outstanding convertible notes will have the right to direct
the time, method and place of conducting any proceeding for exercising any
remedy available to the trustee, subject to certain exceptions. The indenture
provides that, in case an Event of Default shall occur (which shall not have
been cured), the trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own affairs. The
indenture will provide that subject to such provisions, the trustee will be
under no obligation to exercise any of its rights or powers under the indenture
at the request of any holder of convertible notes, unless such holder shall have
offered to the trustee security and indemnity satisfactory to it against any
loss, liability or expense.
LISTING
Application will be made to list the convertible notes on the Luxembourg
Stock Exchange. The legal notice relating to the issue of the convertible notes
and the certificate of incorporation of NTL (Delaware), Inc. will be registered
prior to the listing with the Registrar of the District Court in Luxembourg,
where such documents are available for inspection and where copies thereof can
be obtained upon request. In addition, if and as long as the convertible notes
are listed on the Luxembourg Stock Exchange, an agent for making payments on,
and transfers of, convertible notes will be maintained in Luxembourg. NTL
(Delaware), Inc. has initially designated Chase Manhattan Bank Luxembourg S.A.
as its agent for such purposes.
ADDITIONAL INFORMATION
Anyone who receives this prospectus may obtain a copy of the indenture and
the registration rights agreement without charge by writing to NTL Incorporated,
110 East 59th Street, New York, New York 10022, Attention: Richard J. Lubasch,
Esq., Executive-Vice President, General Counsel and Secretary.
DEFINITIONS
Set forth below are selected defined terms used in the indenture. Reference
is made to the indenture and the registration rights agreement for a full
disclosure of all such terms, as well as any other capitalized terms used in
this section of the prospectus for which no definition is provided.
"Annualized Pro Forma EBITDA" means, with respect to any person, such
person's Pro Forma EBITDA for the latest fiscal quarter multiplied by four.
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<PAGE> 40
"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock, including, without
limitation, partnership interests.
"Change of Control" means
(1) the sale, lease or transfer of all or substantially all of the
assets of NTL (Delaware), Inc. to any "Person" or "group" (within
the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act
or any successor provision to either of the foregoing, including
any group acting for the purpose of acquiring, holding or disposing
of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act) (other than any Permitted Holder),
(2) the approval by the requisite stockholders of NTL (Delaware), Inc.
of a plan of liquidation or dissolution of NTL, (Delaware), Inc.
(3) any "Person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act), other than any Permitted
Holder, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of more than 50% of the total voting power
of all classes of the voting stock of NTL (Delaware), Inc. and/or
warrants or options to acquire such voting stock, calculated on a
fully diluted basis, unless, as a result of such transaction, the
ultimate direct or indirect ownership of NTL (Delaware), Inc. is
substantially the same immediately after such transaction as it was
immediately prior to such transaction, or
(4) during any period of two consecutive years, individuals who at the
beginning of such period constituted NTL (Delaware), Inc.'s board
of directors (together with any new directors whose election or
appointment by such board or whose nomination for election by the
shareholders of NTL (Delaware), Inc. was approved by a vote of a
majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of NTL (Delaware), Inc.'s Board of
Directors then in office.
"Consolidated Interest Expense" means, for any person, for any period, the
amount of interest in respect of Indebtedness (including amortization of
original issue discount, amortization of debt issuance costs, and noncash
interest payments on any Indebtedness and the interest portion of any deferred
payment obligation and after taking into account the effect of elections made
under any Interest Rate Agreement, however denominated, with respect to such
Indebtedness), the amount of Redeemable Dividends, Restricted Subsidiary
Preferred Stock Dividends and the interest component of rentals in respect of
any capital lease obligation paid, in each case whether accrued or scheduled to
be paid
37
<PAGE> 41
or accrued by such person and its Subsidiaries (other than Non-Restricted
Subsidiaries) during such period to the extent such amounts were deducted in
computing Consolidated Net Income, determined on a consolidated basis in
accordance with GAAP. For purposes of this definition, interest on a capital
lease obligation shall be deemed to accrue at an interest rate reasonably
determined by such person to be the rate of interest implicit in such capital
lease obligation in accordance with GAAP consistently applied.
"Consolidated Net Income" means, with respect to any person for any period,
the aggregate of the Net Income of such person and its Subsidiaries (other than
Non-Restricted Subsidiaries) for such period, on a consolidated basis,
determined in accordance with GAAP; provided that
(1) the Net Income of any person that is not a Subsidiary or that is
accounted for by the equity method of accounting shall be included
only to the extent of the amount of dividends or distributions paid
to the referent person or a Wholly Owned Subsidiary,
(2) the Net Income of any person that is a Subsidiary (other than a
Subsidiary of which at least 80% of the Capital Stock having
ordinary voting power for the election of directors or other
governing body of such Subsidiary is owned by the referent person
directly or indirectly through one or more Subsidiaries) shall be
included only to the extent of the amount of dividends or
distributions paid to the referent person or a Wholly Owned
Subsidiary,
(3) the Net Income of any person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition
shall be excluded and
(4) the cumulative effect of a change in accounting principles shall be
excluded.
"Default" means any event that is or, with the passage of time or the
giving of notice or both, would be an Event of Default.
"Disqualified Stock" means any Capital Stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the convertible notes mature.
"EBITDA" means, for any person, for any period, an amount equal to
(a) the sum of
(1) Consolidated Net Income for such period (exclusive of any
gain or loss realized in such period upon an Asset Sale),
plus
(2) the provision for taxes for such period based on income or
profits to the extent such income or profits were included in
computing Consolidated Net Income and any provision for taxes
utilized in computing net loss under clause (1) hereof, plus
(3) Consolidated Interest Expense for such period, plus
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<PAGE> 42
(4) depreciation for such period on a consolidated basis, plus
(5) amortization of intangibles for such period on a consolidated
basis, plus
(6) any other noncash item reducing Consolidated Net Income for
such period, minus
(b) all noncash items increasing Consolidated Net Income for such
period, all for such person and its Subsidiaries determined in
accordance with GAAP consistently applied.
"Excess Payment" means the excess of
(1) the aggregate of the cash and value of other consideration paid by
NTL Incorporated or any of its Subsidiaries with respect to shares
acquired in a tender offer or other negotiated transaction over
(2) the market value of such acquired shares after giving effect to the
completion of a tender offer or other negotiated transaction.
"Exchange Rate Contract" means, with respect to any person, any currency
swap agreements, forward exchange rate agreements, foreign currency futures or
options, exchange rate collar agreements, exchange rate insurance and other
agreements or arrangements, or combination thereof, designed to provide
protection against fluctuations in currency exchange rates. An Exchange Rate
Contract may also include an Interest Rate Agreement.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are in effect on the Issuance Date.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Indebtedness" means, with respect to any person, any indebtedness of such
person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or representing the balance
deferred and unpaid of the purchase price of any property (including pursuant to
capital leases and sale-and-leaseback transactions) or representing any hedging
obligations under an Exchange Rate Contract or an Interest Rate Agreement,
except any such balance that constitutes an accrued expense or trade payable if
and to the extent any of the foregoing indebtedness (other than obligations
under an Exchange Rate Contract or an Interest Rate Agreement) would appear as a
liability upon a balance sheet of such person prepared in accordance with GAAP,
and
39
<PAGE> 43
also include to the extent not otherwise included, the Guarantee of items which
would be included within this definition.
"Interest Rate Agreement" means, for any person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"Issuance Date" means the date on which the convertible notes are first
authenticated and issued.
"Material License" means a license to operate a cable or telephone system
held by the Company or any its Subsidiaries which system at the time of
determination covers a number of Net Households which equals exceeds 5% of the
aggregate number of Net Households covered by all of the licenses to operate
cable telephone systems held by NTL and its Subsidiaries at such time.
"Material Subsidiary" means
(1) NTL UK Group, Inc. (formerly known as OCOM Sub II, Inc.), NTL Group
Limited, CableTel Surrey, CableTel Cardiff Limited, CableTel
Glasgow, CableTel Newport and CableTel Kirklees and
(2) any other Subsidiary of NTL (Delaware), Inc. which is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation
S-X under the Securities Act and the Exchange Act (as such
Regulation is in effect on the date of the indenture).
"Net Income" means, with respect to any person for a specific period, the
net income (loss) of such person during such period, determined in accordance
with GAAP, excluding, however, any gain (but not loss) during such period,
together with any related provision for taxes on such gain (but not loss),
realized during such period in connection with any Asset Sale (as defined in the
indenture) (including, without limitation, dispositions pursuant to
sale-and-leaseback transactions), and excluding any extraordinary gain (but not
loss) during such period, together with any related provision for taxes on such
extraordinary gain (but not loss).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Designee" means
(1) a spouse or a child of a Permitted Holder,
(2) trusts for the benefit of a Permitted Holder or a spouse or child
of a Permitted Holder,
(3) in the event of the death or incompetence of a Permitted Holder,
his estate, heirs, executor, administrator, committee or other
personal representative or
40
<PAGE> 44
(4) any person so long as a Permitted Holder owns at least 50% of the
voting power of all classes of the voting stock of such person.
"Permitted Holders" means George S. Blumenthal, J. Barclay Knapp and their
Permitted Designees.
"Pro Forma EBITDA" means for any Person, for any period, the EBITDA of such
Person as determined on a consolidated basis in accordance with GAAP
consistently applied after giving effect to the following:
(1) if, during or after such period, such Person or any of its
Subsidiaries shall have made any Asset Sale (as defined in the
indenture), Pro Forma EBITDA of such Person and its Subsidiaries
for such period shall be reduced by an amount equal to the Pro
Forma EBITDA (if positive) directly attributable to the assets
which are the subject of such Asset Sale for the period or
increased by an amount equal to the Pro Forma EBITDA (if negative)
directly attributable thereto for such period and
(2) if, during or after such period, such Person or any of its
Subsidiaries completes an acquisition of any Person or business
which immediately after such acquisition is a Subsidiary of such
Person or whose assets are held directly by such Person or a
Subsidiary of such Person, Pro Forma EBITDA shall be computed so as
to give pro forma effect to the acquisition of such Person or
business;
and provided further that, with respect to NTL (Delaware), Inc., all of the
foregoing references to "Subsidiary" or "Subsidiaries" shall be deemed to refer
only to a "Restricted Subsidiary" or "Restricted Subsidiaries" of NTL
(Delaware), Inc.
"Redeemable Dividend" means, for any dividend with regard to Disqualified
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such Disqualified Stock.
"Restricted Subsidiary" means any Subsidiary of the Company which is not a
Non-Restricted Subsidiary.
"Restricted Subsidiary Preferred Stock Dividend" means, for any dividend
with regard to preferred stock of a Restricted Subsidiary, the quotient of the
dividend divided by the difference between one and the maximum statutory federal
income tax rate (expressed as a decimal number between 1 and 0) then applicable
to the issuer of such preferred stock.
"Senior Debt" means the principal of, interest on and other amounts due on
(1) Indebtedness of NTL, whether outstanding on the date of the
indenture or thereafter created, incurred, assumed or guaranteed by
NTL, for money borrowed from banks or other financial institutions;
(2) Indebtedness of NTL, whether outstanding on the date of the
indenture or thereafter created, incurred, assumed or guaranteed by
NTL; and
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<PAGE> 45
(3) Indebtedness of NTL under interest rate swaps, caps or similar
hedging agreements and foreign exchange contracts, currency swaps
or similar agreements:
unless, in the instrument creating or evidencing or pursuant to which
Indebtedness under (1) or (2) is outstanding, it is expressly provided that
such Indebtedness is not senior in right of payment to the convertible
notes. Senior Debt includes, with respect to the obligations described in
clauses (1) and (2) above, interest accruing, pursuant to the terms of such
Senior Debt, on or after the filing of any petition in bankruptcy or for
reorganization relating to NTL, whether or not post-filing interest is
allowed in such proceeding, at the rate specified in the instrument
governing the relevant obligation. Notwithstanding anything to the contrary
in the foregoing, Senior Debt shall not include:
(a) Indebtedness of or amounts owed by NTL for compensation to
employees, or for goods or materials purchased in the ordinary
course of business, or for services; or
(b) Indebtedness of NTL to a Subsidiary of NTL.
In this definition of "Senior Debt," "NTL" means NTL (Delaware), Inc. and
NTL Incorporated.
"Subsidiary" means any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any person or one or more of the other
Subsidiaries of that person or a combination thereof.
"Wholly Owned Subsidiary" means, at any time, a Restricted Subsidiary all
of the Capital Stock of which (except directors' qualifying shares) is at the
time owned directly or indirectly by NTL (Delaware), Inc.
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<PAGE> 46
REGISTRATION RIGHTS
The following summary of selected provisions of the registration rights
agreement is subject to, and is qualified in its entirety by reference to, all
the provisions of the registration rights agreement, which is incorporated by
reference into the registration statement of which this prospectus forms a part.
NTL (Delaware), Inc. entered into the registration rights agreement
pursuant to which it agreed, at its expense, for the benefit of the holders of
the offered securities to file with the Commission the registration statement
covering resale of the offered securities, by May 5, 2000. NTL (Delaware), Inc.
will use its best efforts to cause the registration statement to become
effective as promptly as is practicable, but in any event by September 2, 2000,
and to keep the registration statement effective until the earlier of
(1) the sale pursuant to the registration statement of all the offered
securities registered thereunder and
(2) the expiration of the holding period applicable to such offered
securities held by persons that are not affiliates of NTL (Delaware), Inc.
under Rule 144(k) under the Securities Act, or any successor provision,
subject to certain permitted exceptions.
NTL (Delaware), Inc. will be permitted to suspend the use of this
prospectus under some circumstances relating to pending corporate developments,
public filings with the Commission and similar events. NTL (Delaware), Inc.
agreed to pay predetermined liquidated damages as described below ("Liquidated
Damages") to holders of offered securities if the Registration Statement is not
timely filed or made effective or if this prospectus is unavailable for periods
in excess of those permitted above. Such Liquidated Damages shall accrue to each
holder of convertible notes until such failure to file or become effective or
unavailability is cured at a rate per annum equal to $0.05 per $1,000 aggregate
principal amount of the convertible notes held by such holder for the first 90
day period after the occurrence of such event. The amount of the liquidated
damages will increase by an additional $0.05 per week per $1,000 aggregate
principal amount of the convertible notes held by each holder with respect to
each subsequent 90-day period until all registration defaults have been cured,
up to a maximum amount of liquidated damages of $0.50 per week per $1,000
aggregate principal amount of the convertible notes held by each holder.
Selling securityholders must complete and deliver to us a notice and
questionnaire the form of which was sent to all holders of record known to us,
at least three business days prior to any intended distribution of offered
securities pursuant to the registration statement. Holders of offered securities
are required to complete and deliver the questionnaire prior to the
effectiveness of the registration statement so that such holders may be named as
selling securityholders in this prospectus at the time of effectiveness. Upon
receipt of such a completed questionnaire, together with such other information
as may be reasonably requested by us, from a selling securityholder following
the effectiveness of the registration statement, we will, as promptly as
practicable but in any event within five business days of such receipt, file any
amendments to the registration statement or supplements to this prospectus as
are necessary to permit such selling securityholder to deliver this prospectus,
including any supplements, to purchasers of offered securities, subject to our
right to suspend the use of this prospectus as described above.
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<PAGE> 47
UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a discussion of selected anticipated U.S. federal income
tax consequences of the purchase, ownership and disposition of the convertible
notes as of the date of this prospectus. It deals only with convertible notes
held as capital assets by initial holders, and does not deal with special
situations including those that may apply to a particular holder such as exempt
organizations, dealers in securities, financial institutions, insurance
companies, persons who are not U.S. holders, and holders whose "functional
currency" is not the U.S. dollar, or special rules with respect to straddle or
"hedging transactions." The federal income tax considerations set forth below
are based upon the Internal Revenue Code of 1986, as amended and regulations,
rulings and judicial decisions thereunder as of the date hereof, and such
authorities may be repealed, revoked or modified (possibly retroactively) so as
to result in federal income tax consequences different from those discussed
below. As used herein, the term "U.S. holder" means a beneficial owner of a
convertible note that is for United States federal income tax purposes
(1) a citizen or resident of the United States,
(2) a corporation, partnership or other entity created or organized in
or under the laws of the United States or of any political subdivision
thereof,
(3) an estate or trust, described in Section 7701(a)(30) of the
Internal Revenue Code, or
(4) a person whose worldwide income or gain is otherwise subject to
United States federal income taxation on a net income basis.
Prospective investors are urged to consult their tax advisors regarding the
particular tax consequences of purchasing, holding and disposing of the
convertible notes or our common stock, including the tax consequences arising
under any state, local or foreign laws.
Payments of interest on convertible notes generally will be taxable to U.S.
Holders as ordinary interest income at the time such payments are accrued or
received (in accordance with the U.S. holder's method of accounting for federal
income tax purposes).
A U.S. holder will not recognize gain or loss upon conversion of the
convertible notes solely into NTL Incorporated common stock (except with respect
to cash received in lieu of fractional shares, or any amounts attributable to
accrued and unpaid interest on the convertible notes, which will be treated as
interest for federal income tax purposes). The U.S. holder's basis in the common
stock received on conversion will be the same as such holder's adjusted tax
basis in the convertible notes at the time of conversion, and the holding period
for the common stock received on conversion will include the holding period of
the convertible notes that were converted.
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<PAGE> 48
A U.S. holder will recognize gain or loss upon the sale, redemption or
other taxable disposition of the convertible notes in an amount equal to the
difference between such holder's adjusted tax basis in the convertible note and
the amount received therefor (other than amounts attributable to accrued and
unpaid interest on the convertible notes, which will be treated as interest for
federal income tax purposes). Such gain or loss generally will be long-term
capital gain or loss if the convertible notes were held for more than one year.
The conversion price of the convertible notes is subject to adjustment
under certain circumstances. Under Section 305 of the Internal Revenue Code and
the Treasury Regulations issued thereunder, adjustments or the failure to make
such adjustments to the conversion price of the convertible notes may result in
a taxable constructive distribution to U.S. holders of convertible notes,
resulting in ordinary income (subject to a possible dividends received deduction
in the case of corporate holders) to the extent of our current and accumulated
earnings and profits if, and to the extent that, certain adjustments in the
conversion price that may occur in limited circumstances (particularly an
adjustment to reflect a taxable dividend to holders of our common stock)
increase the proportionate interest of a U.S. holder of a convertible note
convertible into fully diluted common stock, whether or not the holders ever
convert the convertible notes. Generally, a U.S. holder's tax basis in a
convertible note will be increased by the amount of any such constructive
dividend.
We intend to take the position that the likelihood of paying Liquidated
Damages described under "Description of Convertible Notes -- Registration
Rights" is remote and that Liquidated Damages, if paid, would be taxable to a
U.S. holder of convertible notes as ordinary interest income in accordance with
such holder's method of accounting for income tax purposes. The Internal Revenue
Service may take a different position, however, which could affect the timing to
the U.S. holder's income with respect to Liquidated Damages.
The preceding discussion of certain United States federal income tax
consequences is for general information only and is not tax advice. Accordingly,
each investor should consult its own tax adviser as to particular tax
consequences to it of purchasing, holding, and disposing of the convertible
notes and our common stock, including the applicability and effect of any state,
local or foreign tax laws, and of any proposed changes in applicable laws.
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<PAGE> 49
SELLING SECURITYHOLDERS
The following table sets forth, as of August 30, 2000, the respective
principal amount of convertible notes beneficially owned and offered hereby by
each selling securityholder, the common stock owned by each selling
securityholder and the common stock issuable upon conversion of such convertible
notes, which may be sold from time to time by such selling securityholder
pursuant to this prospectus. Such information has been obtained from the selling
securityholders.
The shares of common stock to be registered by this prospectus are
calculated on an "as converted" basis using the conversion rate in effect on the
date of this prospectus of 9.2435 shares of common stock per $1,000 principal
amount of convertible notes.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
CONVERTIBLE NOTES PERCENT OF TOTAL COMMON STOCK
BENEFICIALLY PRINCIPAL AMOUNT OF COMMON STOCK TO BE REGISTERED BY
OWNED AND OFFERED OUTSTANDING OWNED PRIOR TO THIS PROSPECTUS
SELLING SECURITY HOLDERS BY THIS PROSPECTUS CONVERTIBLE NOTES ORIGINAL OFFERING (1)
------------------------ ------------------- ------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
AIG SoundShore Opportunity
Holding Fund Ltd. ............ 2,750,000 * -- 25,419.63
AIG SoundShore Strategic Holding
Fund Ltd. .................... 2,500,000 * -- 23,108.75
AIM Balanced Fund............... 11,700,000 * -- 108,148.95
AIM Constellation Fund.......... 55,000,000 4.58 -- 508,392.50
AIM Global Infrastructure
Fund.......................... 420,000 * -- 3,882.27
AIM Global Utilities Fund....... 3,000,000 * -- 27,730.50
AIM VI Balanced Fund............ 200,000 * -- 1,848.70
AIM VI Global Utilities Fund.... 310,000 * -- 2,865.49
Allstate Insurance Company...... 1,000,000 * -- 9,243.50
Argent Classic Convertible
Arbitrage Fund (Bermuda)
L.P........................... 1,500,000 * -- 13,865.25
Aristeia Trading, LLC .......... 1,761,000 * 16,277.80
Aristeia International, Ltd. ... 3,239,000 * 29,939.70
AST AIM Balanced Fund........... 1,900,000 * -- 17,562.65
Bancroft Convertible Fund,
Inc........................... 1,000,000 * -- 9,243.50
Bank Austria Cayman Island,
Ltd........................... 1,000,000 * -- 9,243.50
BNP Arbitrage SNC............... 7,500,000 * -- 69,326.25
BT Equity Opportunities......... 1,000,000 * -- 9,243.50
BT Equity Strategies............ 1,000,000 * -- 9,243.50
Chrysler Corporation Master
Retirement Trust.............. 4,080,000 * -- 37,713.48
CIBC World Markets.............. 3,270,000 * -- 30,226.25
CIBC World Markets International
Arbitrage Corp................ 4,500,000 * -- 41,595.75
Cova Bond Debenture Fund........ 1,000,000 * 9,243.50
Deephaven Domestic Convertible
Trading Ltd................... 10,000,000 * -- 92,435.00
Delta Air Lines Master Trust.... 1,665,000 * -- 15,390.43
Donaldson, Lufkin & Jenrette
Securities Corporation........ 49,561,000 4.13 -- 458,117.10
ECT Investments, Inc............ 2,900,000 * 26,806.15
Ellsworth Convertible Growth and
Income Fund, Inc. ............ 1,000,000 * -- 9,243.50
Fidelity Financial Trust........ 12,000,000 1.00 110,922.00
Fidelity Advisor Series II...... 344,000 * 3,179.76
Fidelity Management Trust
Company....................... 340,000 * 3,142.79
</TABLE>
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<PAGE> 50
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
CONVERTIBLE NOTES PERCENT OF TOTAL COMMON STOCK
BENEFICIALLY PRINCIPAL AMOUNT OF COMMON STOCK TO BE REGISTERED BY
OWNED AND OFFERED OUTSTANDING OWNED PRIOR TO THIS PROSPECTUS
SELLING SECURITY HOLDERS BY THIS PROSPECTUS CONVERTIBLE NOTES ORIGINAL OFFERING (1)
------------------------ ------------------- ------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Fidelity School Street Trust.... 66,000 * 610.07
Goldman Sachs and Company....... 32,000 * 295.79
HBK MasterFund L.P. ............ 50,500,000 4.21 466,796.75
JMG Capital Partners, LP........ 29,588,000 2.47 -- 273,496.68
JMG Triton Offshore Fund,
Ltd........................... 29,587,000 2.47 273,487.43
Lord Abbett Bond Debenture...... 12,000,000 1.00 110,922.00
Lehman Brothers Inc. ........... 4,540,000 * 41,965.49
Morgan Stanley Dean Witter...... 25,000,000 2.08 -- 231,087.50
Motion Picture Industry Health
Plan - Active Member Fund..... 480,000 * -- 4,436.88
Motion Picture Industry Health
Plan - Retiree Member Fund.... 240,000 * -- 2,218.44
OCM Convertible Trust........... 1,680,000 * -- 15,529.08
Partner Reinsurance Company
Ltd........................... 1,155,000 * -- 10,676.24
PrimeMarket Neutral Limited..... 500,000 * 4,621.75
Sage Capital.................... 2,900,000 * -- 26,806.15
Salomon Brothers Asset
Management, Inc. ............. 53,800,000 4.48 497,300.30
Salomon Smith Barney Inc........ 2,526,000 * -- 23,349.08
State Employees' Retirement Fund
of the State of Delaware...... 2,715,000 * -- 25,096.10
The Northwestern Mutual Life
Insurance Company............. 2,500,000 * 23,108.75
TQA Master Plus Fund............ 2,000,000 * -- 18,487.00
UBKAM Arbitrage Fund............ 1,650,000 * 15,251.78
Vanguard Convertible Notes
Fund, Inc. ................... 5,895,000 * -- 54,490.43
Variable Insurance Products Fund
III........................... 150,000 * 1,386.53
Wasserstein Perella Securities,
Inc. ......................... 6,800,000 * -- 62,855.80
William Fertig 200,000.00 * 1,848.70
</TABLE>
---------------
* Less than one percent.
None of the selling securityholders listed above has, or within the past
three years has had, any position, office or other material relationship with us
or any of our predecessors or affiliates. Because the selling securityholders
may offer all or some portion of the above referenced securities pursuant to
this prospectus or otherwise, no estimate can be given as to the amount or
percentage of such securities that will be held by the selling securityholders
upon termination of any such sale. In addition, the selling securityholders
identified above may have sold, transferred or otherwise disposed of all or a
portion of such securities since August 30, 2000 in transactions exempt from the
registration requirements of the Securities Act. The selling securityholders may
sell all, part or none of the securities listed above.
Generally, only selling securityholders identified in the foregoing table
who beneficially own the offered securities set forth opposite their respective
names may sell such offered securities pursuant to the registration statement,
of which this prospectus forms a part. We may from time to time include
additional selling securityholders in supplements to this prospectus.
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<PAGE> 51
PLAN OF DISTRIBUTION
The offered securities are being registered to permit public secondary
trading of such securities by the holders thereof from time to time after the
date of this prospectus. Neither NTL Incorporated nor NTL (Delaware), Inc. will
receive any of the proceeds from the sale by the selling securityholders of the
offered securities. NTL (Delaware), Inc. will bear all fees and expenses
incident to its obligation to register the offered securities.
The selling securityholders may sell all or a portion of the offered
securities beneficially owned by them and offered hereby from time to time
directly through one or more underwriters, broker-dealers or agents. If the
offered securities are sold through underwriters or broker-dealers, the selling
securityholder will be responsible for underwriting discounts or commissions or
agent's commissions. Such offered securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
Such sales may be effected in transactions (which may involve crosses or block
transactions)
(1) on any national securities exchange or quotation service on which
the offered securities may be listed or quoted at the time of sale
(including the Nasdaq National Market for the common stock),
(2) in the over-the-counter market, or
(3) through the writing of options (whether such options are listed on
an options exchange or otherwise).
In connection with sales of the offered securities or otherwise, the
selling securityholder may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the offered securities in the course
of hedging in positions they assume. The selling securityholder may also sell
offered securities short and deliver offered securities to close out short
positions, or loan or pledge offered securities to broker-dealers that in turn
may sell such offered securities. If the selling securityholders effect such
transactions by selling offered securities to or through underwriters, broker-
dealers or agents, such underwriters, brokers, dealers or agents may receive
commissions in the form of discounts, concessions or commissions from the
selling securityholders or commissions from purchasers of offered securities for
whom they may act as agent or to whom they may sell as principal (which
discounts, concessions or commissions as to particular underwriters,
brokers-dealers or agents may be in excess of those customary in the types of
transactions involved).
The outstanding common stock of NTL Incorporated is listed for trading on
the Nasdaq National Market under the symbol "NTLI." We do not intend to apply
for listing of the convertible notes on any securities exchange except for the
Luxembourg Stock Exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System. Accordingly, no assurance can be
given as to the development of liquidity or any trading market for the
convertible notes. See "Risk Factors--Lack of public market for the convertible
notes."
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<PAGE> 52
The selling securityholders and any broker-dealer participating in the
distribution of the offered securities may be deemed to be "underwriters" within
the meaning of the Securities Act, and any commissions paid, or any discounts or
concessions allowed to any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act.
Under the securities laws of certain states, the offered securities may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in certain states the offered securities may not be sold unless the
offered securities have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied
with.
There can be no assurance that any selling securityholder will sell any or
all of the convertible notes or offered securities registered pursuant to the
shelf registration statement, or which this prospectus forms a part. In
addition, any securities covered by this prospectus that qualify for sale
pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule
144 or Rule 144A rather than pursuant to this prospectus.
The selling securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M of the Exchange Act, which may limit the timing of purchases and sales of any
of the offered securities by the selling securityholders and any other such
person. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of the offered securities to engage in market-making
activities with respect to the particular offered securities being distributed.
All of the foregoing may affect the marketability of the offered securities and
the ability of any person or entity to engage in market-making activities with
respect to the offered securities.
All expenses of the registration of the convertible notes and common stock
pursuant to the registration rights agreement will be paid by NTL (Delaware),
Inc., including, without limitation, Commission filing fees and expenses of
compliance with state securities or "blue sky" laws; provided, however, that the
selling securityholders will pay all underwriting discounts and selling
commissions, if any. The selling securityholders will be indemnified by NTL
(Delaware), Inc. against certain civil liabilities, including certain
liabilities under the Securities Act, or will be entitled to contribution in
connection therewith. The company will be indemnified by the selling
securityholders against certain civil liabilities, including certain liabilities
under the Securities Act, or will be entitled to contribution in connection
therewith.
Upon sale pursuant to the shelf registration statement, of which this
prospectus forms a part, the offered securities will be freely tradable in the
hands of persons other than affiliates of NTL Incorporated.
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<PAGE> 53
LEGAL MATTERS
The validity of the issuance of the convertible notes and the common stock
issuable upon conversion of the convertible notes will be passed upon for NTL by
Skadden, Arps, Slate, Meagher & Flom LLP, London, England, special counsel for
NTL Incorporated and NTL (Delaware), Inc.
EXPERTS
The consolidated financial statements and schedules of NTL (Delaware), Inc.
(formerly NTL Incorporated) appearing in NTL (Delaware), Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1999 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
The combined financial statements of CWC ConsumerCo as of March 31, 1998
and 1999 and for the three years ended March 31, 1999 incorporated by reference
in this prospectus have been audited by Arthur Andersen, Chartered Accountants,
as indicated in their report, and are incorporated by reference in this
prospectus in reliance upon the report of said firm as experts in giving said
report.
The consolidated financial statements of Cablecom Holding AG as of December
31, 1999 and 1998 and for each of the three years in the period ended December
31, 1999 incorporated by reference in this prospectus have been so included in
reliance on the report of PricewaterhouseCoopers AG, independent accountants,
given on the said authority of said firm as experts in auditing and accounting.
ENFORCEABILITY OF CIVIL LIABILITIES
A substantial majority of our assets are located outside the United States.
As a result, it may not be possible for you to realize in the United States upon
judgments of courts of the United States predicated upon the civil liability
under the federal securities laws of the United States. The United States and
England do not currently have a treaty providing for the reciprocal recognition
and enforcement of judgments, other than arbitration awards, in civil and
commercial matters. Therefore, a final judgment for the payment of a fixed debt
or sum of money rendered by any United States court based on civil liability,
whether or not predicated solely upon the United States federal securities laws,
would not automatically be enforceable in England. In order to enforce in
England a United States judgment, proceedings must be initiated by way of common
law action before a court of competent jurisdiction in England. An English court
will, subject to what is said below, normally order summary judgment on the
basis that there is no defense to the claim for payment and will not
reinvestigate the merits of the original dispute. In such an action, an English
court will treat the United States judgment as creating a valid debt upon which
the judgment creditor could bring an action for payment, as long as
(1) the United States court had jurisdiction over the original proceeding,
(2) the judgment is final and conclusive on the merits,
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<PAGE> 54
(3) the judgment does not contravene English public policy,
(4) the judgment must not be for a tax, penalty or a judgment arrived at by
doubling, trebling or otherwise multiplying a sum assessed as
compensation for the loss or damage sustained and
(5) the judgment has not been obtained by fraud or in breach of the
principles of natural justice.
Based on the foregoing, there can be no assurance that you will be able to
enforce in England judgments in civil and commercial matters obtained in any
United States court. There is doubt as to whether an English court would impose
civil liability in an original action predicated solely upon the United States
federal securities laws brought in a court of competent jurisdiction in England.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We are currently subject to the informational requirements of the
Securities Exchange Act of 1934, as amended. We file reports, proxy statements,
information statements and other information with the Commission under the
Exchange Act. You can inspect and copy any reports, proxy statements,
information statements and other information we file with the Commission at the
public reference facilities the Commission maintains at:
Room 1024, Judiciary Plaza,
450 Fifth Street, N.W.,
Washington, D.C. 20549,
and at the Commission's Regional Offices located at:
Suite 1400, Northwestern Atrium Center,
500 West Madison Street,
Chicago, Illinois 60661
and
13th Floor, Seven World Trade Center,
New York, New York 10048,
and you may also obtain copies of such material by mail from the Public
Reference Section of the Commission at:
450 Fifth Street, N.W.,
Washington, D.C. 20549,
at prescribed rates.
The Commission also maintains a site on the World Wide Web, the address of
which is http://www.sec.gov. That site also contains our reports, proxy and
information statements and other information. Reports, proxy statements and
other information concerning the Company may also be inspected at the offices of
the Nasdaq Stock Market, Reports Section, at:
1735 K Street, N.W.,
Washington, D.C. 20006.
51
<PAGE> 55
This prospectus is part of a registration statement filed by us with the
Commission. It does not contain all the information included or incorporated in
the registration statement. The full registration statement can be obtained from
the Commission as indicated above or from us.
The Commission allows us to incorporate by reference some information about
NTL that we file with the Commission. This allows us to disclose important
information to you by referencing those filed documents. Any information that we
reference this way is considered part of this prospectus.
The following documents filed by us with the Commission are incorporated by
reference into this prospectus:
(a) NTL (Delaware), Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1999, dated March 17, 2000, as amended by Form
10-K/A-1, dated August 29, 2000;
(b) NTL (Delaware), Inc.'s Quarterly Reports on Form 10-Q for the
quarter ended March 31, 2000, dated May 11, 2000 and for the
quarter ended June 30, 2000, dated August 10, 2000;
(c) NTL (Delaware), Inc.'s Current Reports on Form 8-K dated
January 6, 2000 (filed January 21, 2000),
January 25, 2000 (filed January 25, 2000),
February 4, 2000 (filed February 10, 2000),
February 15, 2000 (filed February 16, 2000),
February 17, 2000 (filed February 22, 2000),
March 16, 2000 (filed March 29, 2000),
March 16, 2000 (filed May 10, 2000),
April 27, 2000 (filed April 27, 2000),
May 4, 2000 (filed May 4, 2000),
May 10, 2000 (filed May 16, 2000),
May 18, 2000 (filed May 19, 2000),
August 3, 2000 (filed August 7, 2000), and
August 7, 2000 (filed August 10, 2000);
(d) NTL (Delaware), Inc.'s Definitive Proxy Statement on Schedule 14A
dated February 11, 2000;
(e) NTL (Delaware), Inc.'s Definitive Proxy Statement on Schedule 14A
dated April 27, 2000;
(f) NTL Incorporated's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2000, dated August 10, 2000;
(g) NTL Incorporated's Current Reports on Form 8-K dated
May 17, 2000 (filed May 30, 2000, as amended July 13, 2000, August
25, 2000 and August 30, 2000),
May 17, 2000 (filed July 13, 2000),
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<PAGE> 56
May 18, 2000 (filed May 19, 2000),
May 30, 2000 (filed May 30, 2000),
August 3, 2000 (filed August 7, 2000), and
August 4, 2000 (filed August 10, 2000); and
(h) NTL Communications' Form 8-B dated October 14, 1993 (filed on
October 18, 1993), with a description of the common stock and
associated rights.
We are incorporating by reference the documents listed above and any
current reports and proxy statements we file with the commission until the end
of the exchange offer. Any information incorporated by reference this way will
automatically be deemed to update and supersede this information.
We will provide you without charge on your request, a copy of any or all
documents which are incorporated by reference to this prospectus, except for
exhibits which are specifically incorporated by reference into those documents.
You should make your request in writing or by telephone to:
NTL Incorporated
110 East 59th Street
26th Floor
New York NY 10022
Attention: Richard J. Lubasch
Tel: (212) 906-8440
Copies of these documents will be available if and so long as any
convertible notes are listed on the Luxembourg Stock Exchange at the specified
office of the listing agent in Luxembourg.
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[NTL LOGO]
NTL (DELAWARE), INC.
5 3/4% CONVERTIBLE
SUBORDINATED NOTES
DUE 2009
NTL INCORPORATED
COMMON STOCK
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PROSPECTUS
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August 30, 2000
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