<PAGE> 1
[NTL LOGO]
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
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PROXY STATEMENT AND
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 31, 2000
------------------------------
The Annual Meeting of Stockholders of NTL Incorporated (the "Company") will
be held at 10:00 a.m., local time, on Wednesday, May 31, 2000, at the Essex
House, Hyde Park Suite, located at 160 Central Park South, New York, New York
10019, for the following purposes:
1. To elect three directors to the Board of Directors;
2. To ratify the appointment by the Board of Directors of Ernst & Young LLP
as independent auditors for the year ending December 31, 2000; and
3. To transact any other business that may properly be brought before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 14, 2000 as
the record date for the determination of the stockholders entitled to notice of
and to vote at the meeting. Accordingly, only stockholders of record at the
close of business on that date will be entitled to vote at the meeting. The
transfer books will not be closed. A list of the stockholders entitled to vote
at the meeting will be located at the Company's principal executive offices, 110
East 59th Street, New York, New York 10022, at least ten days prior to the
meeting and will also be available for inspection at the meeting.
A copy of the Annual Report for 1999 is being mailed together with this
proxy material.
It is important that your shares be represented at the meeting. Regardless
of whether you plan to attend the meeting, please execute the enclosed proxy and
return it promptly in the accompanying postage-paid envelope. Submitting this
executed proxy will not preclude your right to revoke it and to vote in person
at the meeting.
By order of the Board of Directors,
/s/ Richard J. Lubasch
RICHARD J. LUBASCH
Secretary
New York, New York
April 28, 2000
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NTL INCORPORATED
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
-------------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 31, 2000
-------------------------
PROXY STATEMENT
This proxy statement sets forth certain information with respect to the
accompanying proxy proposed to be used at the Annual Meeting of Stockholders of
NTL Incorporated (the "Company" or "NTL"), to be held at 10:00 a.m., local time,
on Wednesday, May 31, 2000 at the Essex House, Hyde Park Suite, located at 160
Central Park South, New York, New York 10019, or at any adjournment or
postponement thereof (the "Annual Meeting"), for the purposes set forth in the
accompanying Notice of 2000 Annual Meeting of Stockholders. The Board of
Directors of the Company solicits this proxy and urges you to sign the proxy,
fill in the date, and return it immediately to the Secretary of the Company. The
prompt cooperation of stockholders is necessary in order to ensure a quorum and
to avoid expenses and delay.
Holders of record of the Company's common stock, par value $.01 per share
(the "Common Stock"), at the close of business on April 14, 2000, will be
entitled to vote at the Annual Meeting. At the close of business on April 14,
2000, 142,294,360 shares of Common Stock were outstanding and entitled to vote
at the Annual Meeting. Each share of Common Stock is entitled to one vote.
The accompanying proxy is revocable on written instructions, including a
subsequently received proxy, signed in the same manner as the proxy, and
received by the Secretary of the Company at any time at or before the balloting
on the matter with respect to which such proxy is to be exercised. If you attend
the Annual Meeting you may, if you wish, revoke your proxy by voting in person.
This proxy statement and the accompanying proxy materials are first being mailed
to stockholders on or about April 28, 2000.
All expenses of soliciting proxies, including clerical work, printing and
postage, will be paid by the Company. Proxies may be solicited personally, or by
mail, telephone or facsimile, by current and former directors, officers and
other employees of the Company, but the Company will not pay any compensation
for such solicitations. In addition, the Company has agreed to pay D.F. King &
Co., Inc. a fee of $7,500, plus reasonable expenses, for proxy solicitation
services. The Company will also reimburse brokers and other persons holding
shares in their names or in the names of nominees for their expenses for sending
material to principals and obtaining their proxies.
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SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock, as of April 18, 2000, by (i) each executive
officer and director of the Company, (ii) all directors and executive officers
as a group and (iii) stockholders holding 5% or more of the Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
---------------------------------------------------------------
PRESENTLY
EXERCISABLE OPTIONS
WARRANTS, CONVERTIBLE
BONDS AND
EXECUTIVE OFFICERS, DIRECTORS COMMON EXCHANGEABLE
AND PRINCIPAL STOCKHOLDERS STOCK PREFERRED(1) TOTAL PERCENT(2)
----------------------------- ---------- --------------------- ---------- ----------
<S> <C> <C> <C> <C>
Barclay Knapp.......................... 224,428 3,057,509 3,281,937 2.26%
George S. Blumenthal(3)................ 113,217 2,647,221 2,760,438 1.90%
Richard J. Lubasch(4).................. 61,249 502,289 563,538 *
John F. Gregg(5)....................... 1,250 437,450 438,700 *
Leigh Costikyan Wood................... 1,086 548,264 549,350 *
Gregg N. Gorelick...................... 85,154 97,752 182,906 *
Steven L. Wagner....................... 0 293,753 293,753 *
Robert T. Goad(6)...................... 854,950 0 854,950 *
Sidney R. Knafel(7).................... 1,679,268 608,638 2,287,906 1.60%
Ted H. McCourtney(8)................... 179,879 124,365 304,244 *
Del Mintz(9)........................... 911,995 130,743 1,042,738 *
Alan J. Patricof(10)................... 10,872 124,365 135,237 *
Warren Potash(11)...................... 2,170 126,916 129,086 *
Jean-Louis Vinciguerra................. 0 0 0 *
Michael S. Willner(12)................. 694,201 580,602 1,274,803 *
All directors and officers as a group
(15 in number)....................... 4,819,719 9,279,867 14,099,586 9.30%
France Telecom S.A.(13)................ 8,451,023 11,813,058 20,264,081 13.15%
AXA Assurances I.A.R.D. Mutuelle(14)... 13,471,917 1,397,172 14,869,089 10.35%
Janus Capital Corporation(15).......... 11,707,370 3,018,651 14,726,021 10.13%
Microsoft Corporation(16).............. 8,229,200 1,875,000 10,104,200 7.01%
The Goldman Sachs Group, Inc.(17)...... 9,316,215 30,740 9,346,955 6.57%
Prudential Insurance Company of
America(18).......................... 9,229,854 0 9,229,854 6.49%
Prime 66 Partners, L.P.(19)............ 6,851,360 1,275,513 8,126,873 6.23%
Composite 66, L.P.(19)................. 344,429 0 344,429 *
H&S Partners I, L.P.(19)............... 0 510,205 510,205 *
</TABLE>
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* Represents less than one percent
(1) Includes shares of NTL common stock purchased upon the exercise of options
which are exercisable or become so in the next 60 days ("Presently
Exercisable Options"), shares of NTL common stock purchased upon the
conversion of the 7% Convertible Subordinated Notes due 2008 or 5.75%
Convertible Subordinated Notes due 2009 (the "Convertible Bonds") and
shares of Common Stock purchased upon the exchange of the Senior Redeemable
Exchangeable Preferred Stock which are exchangeable or become so in the
next 60 days (the "Exchangeable Preferred"). Of the options, warrants,
convertible bonds and exchangeable preferred shown in the table above:
(a) 610,309 options were assumed by NTL in 1993, having a weighted average
exercise price of $1.08 per share;
2
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(b) 12,163,088 options are employee and non-employee director options that
have been issued by NTL under the 1993 Employee Stock Option Plan, the
1993 Non-Employee Director Stock Option Plan, the 1998 Non-Qualified
Stock Option Plan or certain other stock option agreements, having a
weighted average exercise price of $16.82 per share; and
(c) 968,546 are NTL seven-year warrants that were issued pursuant to
certain non-competition agreements having an exercise price of $3.568
per share.
(2) Includes Common Stock, Presently Exercisable Options, warrants, Convertible
Bonds and Exchangeable Preferred.
(3) Includes 3,299 shares of Common Stock owned by trusts for the benefit of
Mr. Blumenthal's children. Also includes 711,118 options held in Grantor
Retained Annuity Trusts.
(4) Includes 174 shares of Common Stock owned by Mr. Lubasch as custodian for
his child, as to which shares Mr. Lubasch disclaims beneficial ownership.
(5) Mr. Gregg owns $100,000 of the 7% Convertible Bonds, convertible into 2,551
shares of common stock.
(6) Includes 824,701 shares of Common Stock owned by Columbia Management, Inc.,
Mr. Goad's wholly-owned Investment Company. Columbia Management, Inc., of
which Mr. Goad is the sole shareholder, is a limited partner in European
Cable Capital Partners, L.P. ("ECCP"). Columbia Management, Inc. owns or
has options to acquire, in each case as a limited partner, an aggregate of
206,086 units of partnership interests in ECCP ("ECCP Units"), which
constitute 9.20% of all ECCP Units on a fully-diluted basis. ECCP owns
8,765,286 shares of the Company. Neither Mr. Goad nor Columbia Management,
Inc. has a right to control or direct ECCP on the disposition of shares of
the Company, which it owns, and they therefore disclaim any beneficial
ownership of the shares of the Company owned by ECCP.
(7) Includes 25,958 shares of Common Stock owned by Insight Communications UK,
Inc., Mr. Knafel's wholly-owned Investment Company. Also includes 73,363
shares of Common Stock owned by a foundation of which Mr. Knafel is
President, as to which shares Mr. Knafel disclaims beneficial ownership.
(8) Includes 162,616 shares of Common Stock held by limited partnerships of
which Mr. McCourtney is a general partner as to which shares Mr. McCourtney
disclaims beneficial ownership except to the extent of his pro-rata
interest. An additional 2,572 shares of Common Stock are held by trusts for
the benefit of Mr. McCourtney's children, as to which shares Mr. McCourtney
disclaims beneficial ownership.
(9) Includes 39 shares owned by Mr. Mintz's wife, as to which shares Mr. Mintz
disclaims beneficial ownership. Mr. Mintz owns $250,000 of the 7%
Convertible Bonds, convertible into 6,378 shares of Common Stock.
(10) Includes 108 shares of Common Stock owned by Mr. Patricof's wife, as to
which shares Mr. Patricof disclaims beneficial ownership.
(11) Mr. Potash owns $100,000 of the 7% Convertible Bonds, convertible into
2,551 shares of Common Stock.
(12) Includes 138,579 shares of Common Stock held by trust accounts for the
benefit of Mr. Willner's children as to which shares Mr. Willner disclaims
beneficial ownership.
(13) Based solely upon Schedule 13-D (Amendment No. 4), dated April 7, 2000,
filed by France Telecom S.A. and Compagnie Generale des Communications
(COGECOM) S.A. with the Securities and Exchange Commission (the "SEC").
(14) Based solely upon Schedule 13-G, dated February 14, 2000, filed by AXA
Assurances I.A.R.D. Mutuelle, AXA, Assurances Vie Mutuelle, AXA Conseil Vie
Assurance Mutuelle, AXA Courtage Assurance Mutuelle, AXA and AXA Financial,
Inc. with the SEC.
(15) Based solely upon Schedule 13-G (Amendment No. 1), dated February 14, 2000,
filed by Janus Capital Corporation and Thomas H. Bailey with the SEC.
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(16) Based upon Schedule 13-G, dated February 8, 1999, filed by Microsoft
Corporation with the SEC and the conversion of 527,555.90 shares of the
Company's 5 1/4% Convertible Preferred Stock into 8,229,200 shares of
Common Stock on February 7, 2000.
(17) Based upon Form 13-G (Amendment No. 1), dated February 14, 2000, filed by
The Goldman Sachs Group, Inc., Goldman Sachs & Co., European Cable
Partners, L.P., European Cable Capital Partners Holding, Inc., Stone Street
Fund 1996, L.P., Bridge Street Fund 1996, L.P., Stone Street Empire Corp.,
GS Capital Partners, L.P. and GS Advisors, L.P. with the SEC and $1,205,000
of the 7% Convertible Bonds, convertible into 30,740 shares of Common
Stock.
(18) Based upon Schedule 13-G, dated February 7, 2000, filed by The Prudential
Insurance Company of America and Schedule 13-G dated February 10, 2000,
filed by Jennison Associates LLC with the SEC. Jennison Associates LLC, a
wholly-owned subsidiary of The Prudential Insurance Company of America,
holds 9,185,406 shares of Common Stock.
(19) Based solely upon Schedule 13-G (Amendment No. 3), dated February 11, 2000,
filed by Prime 66 Partners, L.P. Composite 66, L.P. and H&S Partners I,
L.P. with the SEC.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the Company's directors and executive officers,
and persons who own more than 10% of a registered class of the Company's equity
securities file with the SEC, and with each exchange on which the Common Stock
trades, initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than 10% beneficial owners are required by the SEC's regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with, except in the following
cases. The Goldman, Sachs Group, Inc., did not report on a timely basis its
transactions for the month of April. Gregg N. Gorelick, did not report on a
timely basis his transactions for the month of May.
4
<PAGE> 6
ELECTION OF DIRECTORS
(PROPOSAL 1)
Pursuant to the Company's Restated Certificate of Incorporation, which
provides for a classified Board of Directors, the Board of Directors consists of
three classes of directors with overlapping three-year terms. One class of
directors is to be elected each year with terms expiring on the third succeeding
annual meeting after such election. The terms of three directors expire this
year. Accordingly, at the Annual Meeting, three directors will be elected to
serve for a three-year term and until their successors shall have been elected
and qualified. Unless otherwise indicated on any proxy, the proxy holders intend
to vote the shares it represents for each of the nominees whose biographical
sketches appear in the section immediately following. Each of the nominees are
now serving as directors of the Company and were previously elected by the
stockholders of the Company except that Mr. Goad was elected by the Board of
Directors in March 1999. The proxies cannot be voted for a greater number of
persons than the number of nominees named.
The election to the Board of Directors of each of the nominees identified
in this proxy statement will require the affirmative vote of the holders of a
plurality of the shares of Common Stock present in person or represented by
proxy at the Annual Meeting and entitled to vote. In tabulating the vote,
abstentions from voting and broker non-votes will be disregarded and have no
effect on the outcome of the vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE ELECTION TO THE BOARD OF DIRECTORS OF EACH OF THE
NOMINEES IDENTIFIED FOR REELECTION
The votes applicable to the shares represented by proxies in the
accompanying form will be cast in favor of the three nominees below. While it is
not anticipated that any of the nominees will be unable to serve, if any should
be unable to serve, the proxy holders reserve the right to substitute any other
person.
The directors of the Company were elected by the Company's stockholders in
1997, 1998 and 1999, as applicable, except as set forth below. The continuing
directors will serve for the terms indicated and until their successors are duly
elected and qualified.
PRESENT DIRECTORS WHO ARE NOMINEES FOR REELECTION
<TABLE>
<CAPTION>
POSITION
NAME AGE (PROPOSED TERM AS DIRECTOR)
---- --- ---------------------------
<S> <C> <C>
Alan J. Patricof............................................ 65 Director (2003)
Warren Potash............................................... 68 Director (2003)
Robert T. Goad.............................................. 45 Director (2003)
</TABLE>
CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING
<TABLE>
<CAPTION>
POSITION
NAME AGE (PROPOSED TERM AS DIRECTOR)
---- --- ---------------------------
<S> <C> <C>
Sidney R. Knafel.................... 69 Director (2001)
Ted H. McCourtney................... 61 Director (2001)
Del Mintz........................... 72 Director (2001)
George S. Blumenthal................ 56 Director, Chairman of the Board and Treasurer (2002)
Barclay Knapp....................... 43 Director, President and Chief Executive Officer (2002)
Michael S. Willner.................. 48 Director (2002)
Jean-Louis Vinciguerra.............. 56 Director (2000)*
</TABLE>
- ---------------
* Jean-Louis Vinciguerra has been elected by France Telecom, S.A. to the Board
of Directors pursuant to the terms of an agreement with France Telecom. It is
anticipated that he will be re-elected to the Board by France Telecom on May
31, 2000.
5
<PAGE> 7
Additional information as of April 14, 2000 regarding the three nominees
for election as directors and the continuing directors and information regarding
executive officers of the Company is as follows:
Alan J. Patricof, a director of the Company since its formation, is
Chairman of Patricof & Co. Ventures, Inc., a venture capital firm he founded in
1969. Mr. Patricof also serves as a director of CoreComm Limited ("CoreComm"),
Boston Properties, Inc. and other privately owned companies.
Warren Potash has been a director of the Company since its formation. Mr.
Potash retired in 1991 as President and Chief Executive Officer of the Radio
Advertising Bureau, a trade association, a position he held since February 1989.
Prior to that time and beginning in 1986, he was President of New Age
Communications, Inc., a communications consultancy firm. Until his retirement in
1986, Mr. Potash was a Vice President of Capital Cities/ABC Broadcasting, Inc.,
a position he held since 1970. Mr. Potash is also a director of CoreComm.
Robert T. Goad has been a director of the Company since March 1999. Mr.
Goad was a director and the Chief Executive Officer of Diamond Cable
Communications Plc from May 1994 to March 8, 1999, and served as Chief Financial
Officer from May 1994 until July 1995. Mr. Goad is a founder of and principal in
ECE Management International, LLC and has been President of Columbia Management,
Inc. since 1984. Mr. Goad is also a director of Apollo Communications
Corporation, B/G Communications, LLC, B/G Enterprises, LLC, B/G Properties, LLC
and Grupo Clarin, S.A.
CONTINUING DIRECTORS
Sidney R. Knafel, a director of the Company since its formation, has been
Managing Partner of SRK Management Company, a private investment company, since
1981. In addition, Mr. Knafel is Chairman of Insight Communications, Inc. and
BioReliance Corporation. Mr. Knafel is also a director of General American
Investors Company, Inc., IGENE Biotechnology, Inc., Source Media, Inc., CoreComm
and some privately owned companies.
Ted H. McCourtney, a director of the Company since its formation, is a
General Partner of Venrock Associates, a venture capital investment partnership,
a position he has held since 1970. Mr. McCourtney also serves as a director of
CareMark RX, Inc., Visual Networks, Inc., CoreComm and several privately owned
companies.
Del Mintz, a director of the Company since its formation, is President of
Cleveland Mobile Tele Trak, Inc., Cleveland Mobile Radio Sales, Inc. and Ohio
Mobile Tele Trak, Inc., companies providing telephone answering and radio
communications services in Cleveland and Columbus, respectively. Mr. Mintz has
held similar positions with the predecessor of these companies since 1967. Mr.
Mintz is President of several other companies, and was President and a principal
stockholder of Cleveland Mobile Cellular Telephone, Inc. before that company was
acquired through a merger with CCI's predecessor in 1985. Mr. Mintz is also a
director of CoreComm and several privately owned companies.
George S. Blumenthal has been Chairman, Treasurer and a director of the
Company since its formation. Mr. Blumenthal was also Chief Executive Officer of
the Company until October 1996. Mr. Blumenthal was President of Blumenthal
Securities, Inc. (and its predecessors), a member firm of The New York Stock
Exchange, from 1967 until 1992. Mr. Blumenthal was Chairman, Treasurer and a
director of Cellular Communications, Inc. ("CCI"), which positions he held since
CCI's founding in 1981 until its merger in August 1996 into a subsidiary of
AirTouch Communications, Inc. (the "CCI Merger"). Mr. Blumenthal is also
Chairman and a director of CoreComm, and was a director of Andover Togs, Inc.
Barclay Knapp is President, Chief Executive Officer and a director of the
Company and has held these positions since its formation with the exception that
Mr. Knapp was Chief Operating Officer until October 1996 when he was appointed
Chief Executive Officer. In addition, Mr. Knapp was also Executive Vice
President, Chief Operating Officer, Chief Financial Officer and a director of
CCI, until the CCI Merger, and was Executive Vice President and Chief Operating
Officer of Cellular Communications International, Inc. ("CCII") until June 1998.
Mr. Knapp was also President, Chief Executive Officer and a director of Cellular
Communications of Puerto Rico, Inc. ("CCPR"), until its sale in August 1999 and
is President, Chief
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<PAGE> 8
Executive Officer, Chief Financial Officer and a director of CoreComm. Mr. Knapp
is also a director of Bredbandsbolaget, a Swedish company in which NTL holds a
25% interest.
Michael S. Willner, a director of the Company since October 1993, has
served as President and Chief Operating Officer of Insight Communications
Company, L.P. since 1985. Mr. Willner is currently President of Insight
Communications, Inc., a position he has held since 1985. Mr. Willner is also a
director of Source Media, Inc., C-Span and the National Cable Television
Association, where he chairs the Local and State Government Committee.
Jean-Louis Vinciguerra has been a director of the Company since August
1999. Mr. Vinciguerra was an executive officer of BZW from 1995 until 1996 and
served as the representative to Asia for Credit Agricole Indosuez from 1997
until 1998. He has been Senior Executive Vice President and Chief Financial
Officer of France Telecom since 1998.
EXECUTIVE OFFICERS OTHER THAN DIRECTORS
Richard J. Lubasch, 53, is the Company's Executive Vice
President -- General Counsel and Secretary, and has been the Company's Senior
Vice President -- General Counsel and Secretary since its formation. Mr. Lubasch
was Vice President-General Counsel and Secretary of CCI from July 1987 until the
CCI Merger. Mr. Lubasch was also Senior Vice President -- General Counsel and
Secretary of CCPR prior to its sale in August 1999 and currently holds these
titles at CoreComm. Mr. Lubasch also held these titles, as well as Treasurer, at
CCII prior to its sale in March 1999.
Leigh Costikyan Wood, 42, has been the Company's Senior Vice President
since October 1996 and is the Chief Operating Officer of the Company's U.K.
operations. From April 1993 until the CCI Merger, Ms. Wood had been the Chief
Executive Officer of a Joint Venture between CCI and AirTouch. From 1982 until
1984, she was Deputy Chief Financial Officer of General Atlantic Corp., a
private investment firm. Previously, she was employed by Peat Marwick Mitchell &
Co. Ms. Wood was Vice President -- Operations of CCI from 1984 until the CCI
Merger.
Gregg N. Gorelick, 41, has been the Company's Vice President -- Controller
since its formation. From 1981 to 1986 he was employed by Ernst & Whinney (now
known as Ernst & Young LLP). Mr. Gorelick is a certified public accountant and
was Vice President -- Controller of CCI from 1986 until the CCI Merger. He also
holds that position at CoreComm (where he is also Treasurer), and was Vice
President -- Controller at CCII prior to its sale in March 1999 and at CCPR
prior to its sale in August 1999.
John F. Gregg, 36, has been the Company's Chief Financial Officer since
June 1999 and Vice President of Corporate Development since August of 1996. Mr.
Gregg joined the Company in 1994 as Managing Director of Corporate Development.
He is Vice Chairman and a director of Virgin Net, a joint venture between the
Company and Virgin Communications Group and a director of Bredbandsbolaget, a
Swedish company in which NTL holds a 25% interest. Prior to his employment by
the Company, Mr. Gregg was employed by Golder, Thoma & Cressey, a venture
capital firm.
Steven L. Wagner, 48, is the Company's Vice President -- Consumer Services
and is Group Managing Director of the National Media Services division in the
Company's U.K. operations. Mr. Wagner joined the Company in February 1994 as
Group Director of Consumer Services of the Company's U.K. operations and was
appointed Vice President -- Consumer Services of NTL in June 1994. Mr. Wagner
has spent the past fifteen years in consumer and business related activities.
Most recently, Mr. Wagner served as Vice President, Eastern Region for the Walt
Disney Company's premium television service, the Disney Channel.
Executive officers of the Company are elected annually by the Board of
Directors and serve until their successors are duly elected and qualified.
7
<PAGE> 9
INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
During calendar 1999, fifteen meetings (including regularly scheduled and
special meetings) of the Board of Directors of the Company were held. The Board
of Directors has a Compensation and Option Committee (the "Compensation
Committee") and an Audit Committee. Messrs. Knafel, McCourtney and Mintz serve
as members of the Compensation Committee and Messrs. Mintz, Patricof and Potash
serve as members of the Audit Committee. The Compensation Committee reviews and
makes recommendations regarding annual compensation for Company officers, and
the Audit Committee oversees the Company's financial reporting process on behalf
of the Company's Board of Directors. During calendar year 1999, the Compensation
Committee held one meeting and the Audit Committee held one meeting. No director
during 1999 attended fewer than 80% of the meetings of the Board of Directors of
the Company and committee meetings of the Board of which he was a member other
than Mr. Patricof who attended 73% of the meetings and Mr. McCourtney who
attended 67% of the meetings. Directors are reimbursed for out-of-pocket
expenses incurred in attending meetings of the Board of Directors and the
committees. In addition, as of December 31, 1999, Messrs. Knafel, McCourtney,
Mintz, Patricof and Potash have each been granted options to purchase an
aggregate of 217,360 shares of Common Stock at a weighted average price of
$15.41 per share and Mr. Willner has been granted options to purchase an
aggregate of 189,324 shares of common stock at a weighted average price of
$19.85 share. Directors who are not officers are paid a fee of $500 for each
Board meeting and committee meeting that they attend.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
POLICY
The Compensation Committee of the Board of Directors has the responsibility
for the design and implementation of the Company's executive compensation
program. The Compensation Committee is composed entirely of non-employee
directors.
The Company's executive compensation program is designed to be closely
linked to corporate performance and return to stockholders. To this end, the
Company has developed an overall compensation strategy and specific compensation
plans that tie a very significant portion of an executive's aggregate
compensation to the appreciation in the Company's stock price. In addition,
executive bonuses are linked to the achievement of operational goals and
therefore relate to stockholder return. The overall objective of this strategy
is to attract and retain the best possible executive talent, to motivate these
executives to achieve the goals inherent in the Company's business strategy and
to link executive and stockholder interests through equity-based compensation,
thereby seeking to enhance the Company's profitability and stockholder value.
Each year the Compensation Committee conducts a review of the Company's
executive compensation program to determine the appropriate level and forms of
compensation. Such review permits an annual evaluation of the link between the
Company's performance and its executive compensation.
In assessing compensation levels for the named executives, the Compensation
Committee recognizes the fact that certain executives have participated in the
development of the Company (and its predecessors) from its earliest stages, and
have produced significant long-term value for stockholders over the course of
the Company's existence. In determining the annual compensation for the Chief
Executive Officer, the Compensation Committee uses the same criteria as it does
for the other named executives.
BASE SALARY AND BONUS
In furtherance of the Company's incentive-oriented compensation goals set
forth above, cash compensation (annual base salary and bonus) is generally set
below levels paid by comparable sized telecommunications companies and is
supplemented by equity-based option grants. With respect to 1999, the aggregate
annual base salary for the named executive officers increased in the aggregate
by approximately $46,000 from 1998 levels. The 1999 base salary for the Chief
Executive Officer increased $3,333 to $273,333.
8
<PAGE> 10
STOCK OPTIONS
Under the Company's stock option plan, stock options were granted to
certain Company executive officers during 1999. Information with respect to such
option grants to the named executive officers is set forth in the table entitled
"Option Grants in Last Fiscal Year."
Stock options are designed to align the interests of executives with those
of stockholders. The options generally are granted at an exercise price equal to
the market price of the Common Stock on the date of grant and vest over a period
of five years. Accordingly, the executives are provided additional incentive to
create stockholder value over the long term since the full benefit of the
options cannot be realized unless stock price appreciation occurs over a number
of years.
In determining individual option grants, the Compensation Committee takes
into consideration the number of options previously granted to that individual,
the amount of time and effort dedicated to the Company during the preceding year
and expected commitment to the Company on a forward-looking basis. The
Compensation Committee also strives to provide each option recipient with an
appropriate incentive to increase stockholder value, taking into consideration
their cash compensation levels.
In 1994, 1996, 1997 and 1999, Mr. Knapp did not receive an option grant,
and in 1995, Mr. Knapp received an option to purchase 416,668 shares of Common
Stock with an exercise price of $14.64 (the fair market value of the Common
Stock on the date of grant adjusted to reflect the Stock Splits). In 1998, Mr.
Knapp received an option to purchase 1,484,375 shares of Common Stock with an
exercise price of $23.36. Mr. Knapp now owns 224,428 shares of Common Stock and
holds options to purchase an additional 4,170,790 shares. The Compensation
Committee believes that the equity interests in the Company held by the named
executive officers, including Mr. Knapp, represent a significant incentive to
increase overall stockholder value.
COMPENSATION DEDUCTION CAP POLICY
In 1996, the Company's stockholders approved an amendment to the Company's
1993 Employee Stock Option Plan (the "1993 Plan") to, among other things, comply
with the requirements regarding non-deductibility of compensation in excess of
$1 million under sec.162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"). Any compensation realized from the exercise of such stock options
granted pursuant to the 1993 Plan at fair market value as of the date of grant
thus generally would be exempt from the deduction limitations under sec.162(m)
of the Code. Compensation realized from the exercise of stock options not
granted pursuant to a plan or granted pursuant to the Company's 1998
Non-Qualified Stock Option Plan would not be exempt from the deduction
limitation under sec.162(m) of the Code. Other annual compensation, such as
salary and bonus, is not expected to exceed $1 million per executive.
THE COMPENSATION AND OPTION COMMITTEE
Sidney R. Knafel
Ted H. McCourtney
Del Mintz
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the members of the Compensation Committee were Sidney R.
Knafel, Ted H. McCourtney and Del Mintz.
The Company had entered into a non-competition agreement with Mr. Knafel
which prohibited Mr. Knafel from entering into a competitive business in the
United Kingdom for a period which expired in October 1998. Under the terms of
such agreement, the Company was entitled to an injunction against any violation
or threatened violation of the agreement. Mr. Knafel received warrants to
purchase 484,273 shares of Common Stock which are currently exercisable in
consideration of his agreement not to compete.
9
<PAGE> 11
GENERAL
The following table discloses compensation received by the Company's Chief
Executive Officer and the four other most highly paid executive officers for the
three years ended December 31, 1999.
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------- ------------
COMMON
OTHER ANNUAL STOCK ALL OTHER
SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(3) OPTIONS(#) ($)(4)
--------------------------- ---- ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Barclay Knapp..................... 1999 273,333 175,000(2) -- -- 16,000
President and Chief Executive 1998 270,000 350,000 -- 1,484,375 14,667
Officer 1997 270,000 -- -- -- 12,734
George S. Blumenthal.............. 1999 273,333 175,000(2) -- -- 16,000
Chairman and Treasurer 1998 270,000 350,000 -- 1,484,375 14,667
1997 270,000 -- -- -- 12,734
Leigh C. Wood..................... 1999 243,750 128,751 159,845(a) 156,250 --
Senior Vice President and 1998 225,000 186,300 162,000(b) 625,000 --
Chief Operating Officer of 1997 225,000 149,500 331,800(c) 117,188 --
U.K. Operations
Richard J. Lubasch................ 1999 235,083 125,000(2) -- 117,188 16,000
Executive Vice President -- 1998 227,000 250,000 -- 312,500 14,667
General Counsel and Secretary 1997 227,000 165,000 -- 39,064 12,734
Steven L. Wagner.................. 1999 216,044 85,071 170,727(d) -- --
Vice President -- 1998 204,000 127,900 169,600(e) 312,500 --
Marketing 1997 195,700 100,100 216,200(f) 54,689 2,500
</TABLE>
- ---------------
(1) In 1997, the Company charged CCII and CCPR $871,000 and $1,492,000,
respectively, for direct costs where identifiable and a fixed percentage of
its corporate overhead. In 1998, the Company charged CCII, CCPR and CoreComm
(which was formed in 1998) $982,000, $1,148,000 and $313,000, respectively.
In 1999, the Company charged CCII, CCPR and CoreComm $439,000, $741,000 and
$2,268,000, respectively. In the opinion of management of the Company, the
above allocations are reasonable.
(2) Does not include fourth quarter bonus information for Messrs. Knapp,
Blumenthal and Lubasch.
(3) Other annual compensation reflects perquisites, such as relocation expenses
and housing, travel, professional fee and car and fuel allowances,
including:
(a) housing allowance of $96,000
(b) housing allowance of $121,900.
(c) housing allowance of $162,900 and relocation expense of $122,300.
(d) housing allowance of $96,000.
(e) housing allowance of $127,500.
(f) housing allowance of $120,800.
(4) All other compensation reflects the Company's match of employee
contributions to a 401(k) plan.
10
<PAGE> 12
OPTION GRANTS TABLE
The following table provides information on stock option grants during 1999
to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATE OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED APPRECIATION FOR
UNDERLYING TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES OR BASE -----------------------
GRANTED IN FISCAL PRICE EXPIRATION 5%($) 10%($)
NAME (#)(1) YEAR ($/SHARE) DATE $81.84 $130.32
- ---- ---------- ----------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Leigh C. Wood................. 156,250 2.39% 50.24 03/18/09 4,937,500 12,512,500
Richard J. Lubasch............ 117,188 1.79% 50.24 03/18/09 3,703,141 9,384,415
</TABLE>
- ---------------
(1) All options were granted on March 19, 1999 at an exercise price equal to the
closing price of the Common Stock on The Nasdaq Stock Market's National
Market (the "NASDAQ") on such date; 20% were exercisable upon issuance, 20%
became exercisable on January 1, 2000 and an additional 20% will become
exercisable on each of January 1, 2001, 2002 and 2003. Upon a change of
control of the Company, all unvested options become fully vested and
exercisable.
(2) The amounts shown in these columns are the potential realizable value of
options granted at assumed rates of stock price appreciation (5% and 10%)
specified by the SEC, and have not been discounted to reflect the present
value of such amounts. The assumed rates of stock price appreciation are not
intended to forecast the future appreciation of the Common Stock.
11
<PAGE> 13
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table provides information on stock option exercises during
1999 by the named executive officers and the value at December 31, 1999 of
unexercised in-the-money options held by each of the named executive officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR-END AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FY-END(#) FY-END($)*
ACQUIRED ON VALUE EXERCISABLE(E)/ EXERCISABLE(E)/
EXERCISE(#) REALIZED($) UNEXERCISABLE(U) UNEXERCISABLE(U)
----------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C>
Barclay Knapp...................... 31,471 2,517,765 2,834,853(E) 261,527,967(E)
1,335,937(U) 102,114,849(U)
George S. Blumenthal............... 463,390 22,307,233 2,424,565(E) 222,662,671(E)
1,335,937(U) 102,114,849(U)
Leigh C. Wood...................... -- -- 360,764(E) 29,199,784(E)
773,438(U) 56,379,810(U)
Richard J. Lubasch................. 25,000 2,276,500 416,351(E) 36,689,371(E)
398,439(U) 28,117,318(U)
Steven L. Wagner................... -- -- 220,315(E) 18,534,716(E)
318,751(U) 24,656,088(U)
</TABLE>
- ---------------
* Based on the closing price on the NASDAQ on December 31, 1999 of $99.80.
12
<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the cumulative return on the Common Stock with
The Nasdaq Stock Market (U.S.) Index (the "Nasdaq (U.S.) Index"), the Center for
Research in Security Prices Index of Nasdaq Telecommunications Stocks (the "CRSP
Index") and the Peer Group Index. In the Company's view, the Peer Group Index,
which includes British Telecom plc, Cable and Wireless plc and Telewest
Communications plc, provides a better representation of the performance of
telecommunications companies over the required period than the broader based
CRSP Index.
The graph assumes that $100 was invested on December 31, 1994.
COMPARISON OF NTL INCORPORATED, THE PEER GROUP INDEX,
THE CRSP INDEX AND THE NASDAQ (U.S.) INDEX
<TABLE>
<CAPTION>
NASDAQ (U.S.)
NTL INCORPORATED CRSP INDEX INDEX THE PEER GROUP INDEX
---------------- ---------- ------------- --------------------
<S> <C> <C> <C> <C>
12/30/94 100 100 100 100
12/29/95 117.72 134.17 139.92 105.01
12/31/96 121.32 139.04 171.69 109.11
12/31/97 133.93 197.44 208.83 118.27
12/31/98 271.17 322.56 291.6 199.13
12/31/99 749.25 653.87 541.16 381.42
</TABLE>
- ---------------
NOTE: Stock price performance shown above for the Common Stock is historical and
not necessarily indicative of future price performance.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 2)
Subject to ratification by the stockholders, the Board of Directors has
reappointed Ernst & Young LLP as independent auditors to audit the financial
statements of the Company for the year ending December 31, 2000.
Representatives of the firm of Ernst & Young LLP are expected to be present
at the Annual Meeting and will have an opportunity to make a statement if they
so desire and will be available to respond to appropriate questions.
The ratification of the selection of Ernst & Young LLP as the Company's
independent auditors for fiscal year 2000 will require the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock present at
the Annual Meeting, in person or represented by proxy, and entitled to vote. In
determining
13
<PAGE> 15
whether the proposal has received the requisite number of affirmative votes,
abstentions will be counted and will have the same effect as a vote against the
proposal; broker non-votes will be disregarded and will have no effect on the
outcome of the vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR SUCH RATIFICATION
TRANSACTIONS WITH RELATED PARTIES
Pursuant to a Purchase Agreement with France Telecom, S.A. entered into in
July 1999, Jean-Louis Vinciguerra was elected by France Telecom to the Board of
Directors subject to the terms of that agreement.
On March 8, 1999, the Company acquired Diamond Cable Communications plc
("Diamond") for Common Stock valued at approximately $971.4 million pursuant to
an acquisition agreement, dated as of June 16, 1998, as amended, between the
Company and the shareholders of Diamond. Under the terms of such agreement, each
shareholder of Diamond received .85 shares of Common Stock for each four
ordinary shares of Diamond. Pursuant to such transaction, Robert T. Goad, a
director and Chief Executive Officer of Diamond from May 1994 to March 8, 1999,
received 176,383 shares of Common Stock.
In October 1993, the Company entered into non-competition agreements with
Sidney R. Knafel, Michael S. Willner and other persons associated with Insight
U.K. The non-competition agreements prohibited Messrs. Knafel and Willner and
others from entering into a competitive business in the United Kingdom for a
period that ended in 1998. Under the terms of such agreements, the Company was
entitled to an injunction against any violation or threatened violation of the
non-competition agreements. Messrs. Knafel and Willner and others received
warrants to purchase an aggregate of 1,403,694 shares of Common Stock which are
currently exercisable in consideration of their agreements not to compete.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2001 Annual
Meeting must be received by the Company at the address set forth on the first
page of this proxy statement on or before December 29, 2000 to be considered for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
Notices of stockholder proposals submitted outside the processes of Rule
14a-8 will be considered timely, pursuant to the advance notice requirements set
forth in Article II, Section 4 of NTL's by-laws, if such notices are received
not less than 75 days nor more than 90 days prior to the annual meeting of
stockholders; provided, however, that in the event that less than 90 days'
notice or prior public disclosure of the date of the annual meeting is given or
made to stockholders, notice by the stockholder to be timely must be so received
not later than the close of business on the fifteenth day following the day on
which such notice of the date of the annual meeting was mailed or such public
disclosure was made, whichever first occurs. Such stockholder's notice shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting:
- a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting;
- the name and record address of the stockholder proposing such business;
- the class, series and number of shares of capital stock of NTL which are
beneficially owned by the stockholder; and
- any material interest of the stockholder in such business.
Any such proposal or notice should be directed to the attention of the
Secretary, NTL Incorporated, 110 East 59th Street, New York, New York 10022.
SEC rules set forth standards for the exclusion of some stockholder
proposals from a proxy statement for an annual meeting.
14
<PAGE> 16
OTHER BUSINESS
The Board of Directors is not aware of any matters other than those set
forth in this proxy statement that will be presented for action at the Annual
Meeting and does not intend to bring any other matters before the Annual
Meeting. However, if any other matters should properly come before the Annual
Meeting, or at any adjournment or postponement thereof, it is the intention of
the persons named in the accompanying proxy to vote on such matters as they, in
their discretion, may determine.
By order of the Board of Directors,
/s/ Richard J. Lubasch
RICHARD J. LUBASCH
Secretary
New York, New York
April 28, 2000
15
<PAGE> 17
PROXY NTL INCORPORATED
110 EAST 59TH STREET, NEW YORK, NEW YORK 10022
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
ON MAY 31, 2000
The undersigned hereby appoints George S. Blumenthal, Barclay Knapp and
Richard J. Lubasch, and each of them, with full power of substitution, proxies
to represent the undersigned at the Annual Meeting of Stockholders of NTL
Incorporated ("the Company") to be held at 10:00 a.m., local time, on Wednesday,
May 31, 2000, at the Essex House, Hyde Park Suite, located at 160 Central Park
South, New York, New York 10019, and at any adjournment or postponement thereof
and thereat to vote all of the shares of stock which the undersigned would be
entitled to vote, with all the powers the undersigned would possess if
personally present.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
Unless otherwise specified in the boxes provided below, this Proxy will be voted
FOR all nominees for Director, a vote FOR proposal 2 and in the discretion of
the above named persons as to any other matter that may properly come before the
Annual Meeting.
1. Election of Directors: Nominees: Alan J. Patricof, Warren Potash and Robert
T. Goad
[ ] VOTE FOR all nominees listed, except as marked to
the [ ] VOTE WITHHELD from all nominees.
contrary above. (TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
2. Ratify the appointment of Ernst & Young LLP as the independent auditors of
the Company for the fiscal year ending December 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please date and sign on reverse side and return promptly.)
<PAGE> 18
3. In the discretion of persons named above, to act upon such other business as
may properly come before the Annual Meeting or any adjournment or
postponement thereof.
THE PROXY HOLDERS WILL VOTE THE SHARES REPRESENTED BY THIS PROXY IN THE MANNER
INDICATED ON THE REVERSE SIDE HEREOF. UNLESS A CONTRARY DIRECTION IS INDICATED,
THE PROXY HOLDERS WILL VOTE SUCH SHARES "FOR"ALL NOMINEES FOR DIRECTOR AND A
VOTE "FOR" PROPOSAL 2 SET FORTH ON THE REVERSE SIDE HEREOF. IF ANY FURTHER
MATTERS PROPERLY COME BEFORE THE ANNUAL MEETING, IT IS THE INTENTION OF THE
PERSONS NAMED ABOVE TO VOTE SUCH PROXIES IN ACCORDANCE WITH THEIR BEST
JUDGEMENT.
----------------------------------
Signature
----------------------------------
Signature
Dated:
----------------------------------,
2000
In case of joint owners, each
joint owner must sign. If signing
for a corporation or partnership
or an agent, attorney or
fiduciary, indicate the capacity
in which you are signing.
PLEASE MARK, DATE AND SIGN YOUR NAME AS IT APPEARS
ON THIS CARD AND RETURN IN THE ENCLOSED ENVELOPE
