<PAGE> 1
FORM 10-K/A NO. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from June 1, 1995 through December 31, 1995
Commission file number: 1-9953
JONES INTERCABLE, INC.
----------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0613514
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(State of Organization) (IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
- --------------------------------------------- --------------
(Address of principal executive office and Zip Code) (Registrant's telephone no.
including area code)
Securities registered pursuant to Section 12(g) of the Act:
-----------------------------------------------------------
Common Stock, $.01 par value
Class A Common Stock, $.01 par value
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
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Aggregate market value as of March 1, 1996 of the voting stock held by
non-affiliates:
Common Stock $29,799,088 Class A Common Stock $185,738,121
Shares outstanding of each of the registrant's classes of common stock as of
March 1, 1996:
Common Stock: 5,113,021 Class A Common Stock: 26,263,523
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company's Articles of Incorporation provide that, with respect to
the election of Directors, the holders of Class A Common Stock, voting as a
separate class, are entitled to elect that number of Directors constituting 25%
of the total membership of the Board of Directors. If such 25% is not a whole
number, holders of Class A Common Stock are entitled to elect the nearest
higher whole number of Directors constituting 25% of the membership of the
Board of Directors. Holders of Common Stock, voting as a separate class, are
entitled to elect the remaining Directors.
Pursuant to the terms of the Shareholders Agreement dated as of
December 20, 1994 among Glenn R. Jones, Jones International, Ltd., Bell Canada
International Inc. ("BCI") and the Company (the "Shareholders Agreement"), the
Company's Board of Directors consists of 13 directors. William E. Frenzel,
Donald L. Jacobs, John A. MacDonald and Robert B. Zoellick are serving as the
Class A Directors and Glenn R. Jones, Derek H. Burney, Robert E. Cole, James J.
Krejci, James B. O'Brien, Raphael M. Solot, Daniel E. Somers, Howard O. Thrall
and Raymond L. Vigil are serving as the Common Directors.
The parties to the Shareholders Agreement have agreed that of the four
Class A Directors, BCI will be entitled, but not required, to designate one
Director and the remaining three directors, which shall be Independent
Directors (as such term is defined in the Shareholders Agreement), will be
jointly designated by Glenn R. Jones and BCI. The parties to the Shareholders
Agreement also have agreed that Mr. Jones will be entitled, but not required,
to designate seven of the nine Common Directors and that BCI will be entitled,
but not required, to designate two of the nine Common Directors.
The Company has agreed that in the event that Mr. Jones or BCI chooses
to designate one or more nominees to the Board of Directors pursuant to the
terms of the Shareholders Agreement, the Company will use its reasonable
efforts to include each such nominee in the group of nominees proposed by
management of the Company for election to the Board, recommend to the
shareholders of the Company each such nominee's election to the Board and
solicit proxies for each such nominee from all holders of voting securities
entitled to vote thereon. In addition, each of BCI and Mr. Jones have agreed
to vote or cause to be voted all of the shares of the Company owned or
controlled by them at any meeting of shareholders of the Company, or in any
written consent executed in lieu of such a meeting of shareholders, in favor of
their mutual nominees to the Board of Directors.
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Certain additional information concerning the executive officers and
directors of the Company is set forth below.
Glenn R. Jones 66 Chairman of the Board and Chief Executive Officer
Derek H. Burney 56 Vice Chairman of the Board
James B. O'Brien 46 President and Director
Ruth E. Warren 46 Group Vice President/Operations
Kevin P. Coyle 44 Group Vice President/Finance
Christopher J. Bowick 40 Group Vice President/Technology
George H. Newton 61 Group Vice President/Telecommunications
Timothy J. Burke 45 Group Vice President/Taxation/Administration
Raymond L. Vigil 49 Group Vice President/Human Resources and Director
Cynthia A. Winning 45 Group Vice President/Marketing
Elizabeth M. Steele 44 Vice President and Secretary
Larry W. Kaschinske 36 Controller
Robert E. Cole 63 Director
William E. Frenzel 67 Director
Donald L. Jacobs 58 Director
James J. Krejci 54 Director
John A. MacDonald 42 Director
Raphael M. Solot 62 Director
Daniel E. Somers 48 Director
Howard O. Thrall 48 Director
Robert B. Zoellick 42 Director
Mr. Glenn R. Jones has served as Chairman of the Board of Directors
and Chief Executive Officer of the Company since its formation in 1970, and he
was President from June 1984 until April 1988. Mr. Jones is the sole
shareholder, President and Chairman of the Board of Directors of Jones
International, Ltd. He is also Chairman of the Board of Directors of the
subsidiaries of the Company and of certain other affiliates of the Company.
Mr. Jones has been involved in the cable television business in various
capacities since 1961, is a past and present member of the Board of Directors
and the Executive Committee of the National Cable Television Association. He
also is on the Executive Committee of Cable in the Classroom, an organization
dedicated to education via cable. Additionally, in March 1991, Mr. Jones was
appointed to the Board of Governors for the American Society for Training and
Development, and in November 1992 to the Board of Education Council of the
National Alliance of Business. Mr. Jones is also a founding member of the
James Madison Council of the Library of Congress. Mr. Jones is a past director
and member of the Executive Committee of C-Span. Mr. Jones has been the
recipient of several awards including the Grand Tam Award in 1989, the highest
award from the Cable Television Administration and Marketing Society; the
Chairman's Award from the Investment Partnership Association, which is an
association of sponsors of public syndications; the cable television industry's
Public Affairs Association President's Award in 1990, the Donald G. McGannon
award for the advancement
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of minorities and women in cable; the STAR Award from American Women in Radio
and Television, Inc. for exhibition of a commitment to the issues and concerns
of women in television and radio; the Women in Cable Accolade in 1990 in
recognition of support of this organization; the Most Outstanding Corporate
Individual Achievement award from the International Distance Learning
Conference; the Golden Plate Award from the American Academy of Achievement for
his advances in distance education; the Man of the Year named by the Denver
chapter of the Achievement Rewards for College Scientists; and in 1994 Mr.
Jones was inducted into Broadcasting and Cable's Hall of Fame.
Mr. Derek H. Burney was appointed a director of the Company on
December 20, 1994 and Vice Chairman of the Board of Directors on January 31,
1995. Mr. Burney joined BCE Inc., Canada's largest telecommunications company,
in January 1993 as Executive Vice President, International. He has been the
Chairman of Bell Canada International Inc., a subsidiary of BCE, since January
1993 and, in addition, has been Chief Executive Officer of BCI since July 1993.
Prior to joining BCE, Mr. Burney served as Canada's ambassador to the United
States from 1989 to 1992. Mr. Burney also served as chief of staff to the
Prime Minister of Canada from March 1987 to January 1989 where he was directly
involved with the negotiation of the U.S. - Canada Free Trade Agreement. In
July 1993, he was named an Officer of the Order of Canada. Mr. Burney is
chairman of Bell Cablemedia plc. He is a director of Mercury Communications
Limited, Videotron Holdings plc, Tele-Direct (Publications) Inc., Teleglobe
Inc., Bimcor Inc., Maritime Telegraph and Telephone Company, Limited, Moore
Corporation Limited and Northbridge Programming Inc.
Mr. James B. O'Brien, the Company's President, joined the Company in
January 1982. Prior to being elected President and a director of the Company
in December 1989, Mr. O'Brien served as a Division Manager, Director of
Operations Planning/Assistant to the CEO, Fund Vice President and Group Vice
President/Operations. Mr. O'Brien was appointed to the Company's Executive
Committee in August 1993. As President, he is responsible for the day-to-day
operations of the cable television systems managed and owned by the Company.
Mr. O'Brien is a board member of Cable Labs, Inc., the research arm of the U.S.
cable television industry. He also serves as a director of the Cable
Television Administration and Marketing Association and as a director of the
Walter Kaitz Foundation, a foundation that places people of ethnic minority
groups in positions with cable television systems, networks and vendor
companies.
Ms. Ruth E. Warren joined the Company in August 1980 and has served in
various operational capacities, including system manager and Fund Vice
President, since then. Ms. Warren was elected Group Vice President/Operations
of the Company in September 1990.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the Company in
August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990.
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Mr. Christopher J. Bowick joined the Company in September 1991 as
Group Vice President/Technology and Chief Technical Officer. Previous to
joining the Company, Mr. Bowick worked for Scientific Atlanta's Transmission
Systems Business Division in various technical management capacities since
1981, and as Vice President of Engineering since 1989.
Mr. George H. Newton joined the Company in January 1996 as Group Vice
President/Telecommunications. Prior to joining the Company, Mr. Newton was
President of his own consulting business, Clear Solutions, and since 1994 Mr.
Newton has served as a Senior Advisor to Bell Canada International. From 1990
to 1993, Mr. Newton served as the founding Chief Executive Officer and Managing
Director of Clear Communications, New Zealand, where he established an
alternative telephone company in New Zealand. From 1964 to 1990, Mr. Newton
held a wide variety of operational and business assignments with Bell Canada
International.
Mr. Timothy J. Burke joined the Company in August 1982 as corporate
tax manager, was elected Vice President/Taxation in November 1986 and Group
Vice President/Taxation/Administration in October 1990.
Mr. Raymond L. Vigil joined the Company in June 1993 as Group Vice
President/Human Resources. Previous to joining the Company, Mr. Vigil served
as Executive Director of Learning with USWest. Prior to USWest, Mr. Vigil
worked in various human resources posts over a 14-year term with the IBM
Corporation.
Ms. Cynthia A. Winning joined the Company as Group Vice
President/Marketing in December 1994. Previous to joining the Company, Ms.
Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a
sports and event marketing company. From 1979 to 1981 and from 1986 to 1994,
Ms. Winning served as the Vice President and Director of Marketing for Citicorp
Retail Services, Inc., a provider of private-label credit cards for ten
national retail department store chains. From 1981 to 1986, Ms. Winning was
the Director of Marketing Services for Daniels & Associates cable television
operations, as well as the Western Division Marketing Director for Capital
Cities Cable. Ms. Winning also serves as a board member of Cities in Schools,
a dropout intervention/prevention program.
Ms. Elizabeth M. Steele joined the Company in August 1987 as Vice
President, General Counsel and Secretary. From August 1980 until joining the
Company, Ms. Steele was an associate and then a partner at the Denver law firm
of Davis, Graham & Stubbs, which serves as counsel to the Company.
Mr. Larry Kaschinske joined the Company in 1984 as a staff accountant
in the Company's former Wisconsin Division, was promoted to Assistant
Controller in 1990 and named Controller in August 1994.
Mr. Robert E. Cole was appointed a director of the Company in March
1996. Mr. Cole is currently self-employed as a partner of First Variable
Insurance Marketing and is responsible for marketing to National Association of
Securities Dealers, Inc. firms in northern
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California, Oregon, Washington and Alaska. From 1993 to 1995, Mr. Cole was the
Director of Marketing for Lamar Life Insurance Company; from 1992 to 1993, Mr.
Cole was Senior Vice President of PMI Inc., a third party lender serving the
special needs of Corporate Owned Life Insurance (COLI) and from 1988 to 1992,
Mr. Cole was the principal and co-founder of a specialty investment banking
firm that provided services to finance the ownership and growth of emerging
companies, productive assets and real property. Mr. Cole is a Certified
Financial Planner and a former United States Naval Aviator.
Mr. William E. Frenzel was appointed a director of the Company on
April 11, 1995. Mr. Frenzel has been a Guest Scholar since 1991 with the
Brookings Institution, a research organization located in Washington D. C.
Until his retirement in January 1991, Mr. Frenzel served for twenty years in
the United States House of Representatives, representing the State of
Minnesota, where he was a member of the House Ways and Means Committee and its
Trade Subcommittee, the Congressional Representative to the General Agreement
on Tariffs and Trade (GATT), the Ranking Minority Member on the House Budget
Committee and a member of the National Economic Commission. Mr. Frenzel also
served in the Minnesota Legislature for eight years. He is a Distinguished
Fellow of the Tax Foundation, Vice Chairman of the Eurasia Foundation, a Board
Member of the U.S.-Japan Foundation, the Close-Up Foundation, Sit Mutual Funds
and Chairman of the Japan-America Society of Washington.
Mr. Donald L. Jacobs was appointed a director of the Company on April
11, 1995. Mr. Jacobs is a retired executive officer of TRW. Prior to his
retirement, he was Vice President and Deputy Manager of the Space and Defense
Sector; prior to that appointment, he was the Vice President and General
Manager of the Defense Systems Group and prior to his appointment as Group
General Manager, he was President of ESL, Inc., a wholly owned subsidiary of
TRW. During his career, Mr. Jacobs served on several corporate, professional
and civic boards.
Mr. James J. Krejci was President of the International Division of
International Gaming Technology, International headquartered in Reno, Nevada,
until March 1995. Prior to joining IGT in May 1994, Mr. Krejci was Group Vice
President of Jones International, Ltd. and was Group Vice President of the
Company. He also served as an officer of Jones Futurex, Inc., a subsidiary of
the Company engaged in manufacturing and marketing data encryption devices,
Jones Interactive, Inc., a subsidiary of Jones International, Ltd. providing
computer data and billing processing facilities and Jones Lightwave, Ltd., a
company owned by Jones International, Ltd. and Mr. Jones, and several of its
subsidiaries engaged in the provision of telecommunications services until
leaving the Company in May 1994. Mr. Krejci has been a director of the Company
since August 1987.
Mr. John A. MacDonald was appointed a director of the Company on
November 8, 1995. Mr. MacDonald is Executive Vice President of Business
Development and Chief Technology Officer of Bell Canada International Inc.
Prior to joining Bell Canada in November 1994, Mr. MacDonald was President and
Chief Executive Officer of The New Brunswick Telephone Company, Limited, a post
he had held since March of that year. Prior
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to March 1994, Mr. MacDonald was with NBTel for 17 years serving in various
capacities, including Market Planning Manager, Corporate Planning Manager,
Manager of Systems Planning and Development and General Manager, Chief Engineer
and General Manager of Engineering and Information Systems and Vice President
of Planning. Mr. MacDonald was the former Chairman of the New Brunswick
section of the Institute of Electrical and Electronic Engineers and also served
on the Federal Government's Information Highway Advisory Council. Mr.
MacDonald is Chairman of MediaLinx Interactive Inc. and Stentor Canadian
Network Management and is presently a Governor of the Montreal Exchange. He
also serves on the Board of Directors of Tele-Direct (Publications) Inc.,
Bell-Northern Research, Ltd., SRCI, Bell Sygma, Canarie Inc., and is a member
of the University of New Brunswick Venture Campaign Cabinet.
Mr. Raphael M. Solot was appointed a director of the Company in March
1996. Mr. Solot is an attorney licensed to practice law in the State of
Colorado. Mr. Solot has practiced law in the State of Colorado as a sole
practitioner since obtaining his Juris Doctor degree from the University of
Colorado in 1964.
Mr. Daniel E. Somers was initially appointed a director of the Company
on December 20, 1994. Mr. Somers resigned as a director on December 31, 1995,
at the time he was elected Chief Executive Officer of Bell Cablemedia. Mr.
Somers was reinstated as a director of the Company on February 2, 1996. From
January 1992 to January 1995, Mr. Somers worked as senior Vice President and
Chief Financial Officer of Bell Canada International Inc. and was appointed
Executive Vice President and Chief Financial Officer on February 1, 1995. He
is also a director of certain of its affiliates. Mr. Somers currently serves
as Chief Executive Officer of Bell Cablemedia. Prior to joining Bell Canada
International Inc. and since January 1989, Mr. Somers was a President and Chief
Executive Officer of Radio Atlantic Holdings Limited. Mr. Somers is a member
of the North American Society of Corporate Planning, the Financial Executives
Institution and the Financial Analysts Federation.
Mr. Howard O. Thrall was appointed a director of the Company on March
6, 1996. Mr. Thrall had previously served as a director of the Company from
December 1988 to December 1994. Since September 1993, Mr. Thrall has served as
Vice President of Sales, Asian Region, for World Airways, Inc. headquartered at
the Washington Dulles International Airport. From 1984 until August 1993, Mr.
Thrall was with the McDonnell Douglas Corporation, where he concluded as a
Regional Vice President, Commercial Marketing with the Douglas Aircraft Company
subsidiary. Mr. Thrall is also an active management and international
marketing consultant, having completed assignments with First National Net,
Inc., Cheong Kang Associated (Korea), Aero Investment Alliance, Inc. and
Western Real Estate Partners, among others.
Mr. Robert B. Zoellick was appointed a director of the Company on
April 11, 1995. Mr. Zoellick is Executive Vice President, General Counsel and
Corporate Secretary of Fannie Mae, a federally chartered and stockholder-owned
corporation that is the largest housing finance investor in the United States.
From August 1992 to January 1993, Mr. Zoellick
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served as Deputy Chief of Staff of the White House and Assistant to the
President. From May 1991 to August 1992, Mr. Zoellick served concurrently as
the Under Secretary of State for Economic and Agricultural Affairs and as
Counselor of the Department of State, a post he assumed in March 1989. From
1985 to 1988, Mr. Zoellick served at the Department of Treasury in a number of
capacities, including Counselor to the Secretary. Mr. Zoellick received the
Alexander Hamilton and Distinguished Service Awards, highest honors of the
Departments of Treasury and State, respectively. The German Government awarded
him the Knight Commanders Cross for his work on Germany unification. Mr.
Zoellick currently serves on the boards of the Council on Foreign Relations,
the Congressional Institute, the German Marshall Fund of the U.S., the European
Institute, the National Bureau of Asian Research, the American Council on
Germany and the Overseas Development Council.
Derek H. Burney, John A. MacDonald and Daniel E. Somers are directors
of the Company. Certain reports by these persons with respect to the ownership
of stock in the Company, required by Section 16(a) of the Securities Exchange
Act of 1934, as amended, were not filed within the required time. Messrs.
Burney, MacDonald and Somers failed to timely file an initial report of
ownership of stock in the Company. As disclosed in Item 12, Security Ownership
of Certain Beneficial Owners, Directors and Management, Mr. Burney owns 350
shares of the Class A Common Stock of the Company, and Mr. Somers owns 100
shares of the Class A Common Stock of the Company. Mr. MacDonald does not own
any shares of stock in the Company.
ITEM 11. EXECUTIVE COMPENSATION
Compensation Summary
The following table sets forth certain information relating to the
compensation paid by the Company during the Company's past three fiscal years
ended May 31, 1995, 1994 and 1993 and for the twelve months ended December 31,
1995 to those persons who were, at December 31, 1995, the Chief Executive
Officer and the other four most highly compensated executive officers of the
Company.
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<TABLE>
<CAPTION>
LONG TERM
---------
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------- ------
NAME AND
-------- ALL OTHER
PRINCIPAL POSITION YEAR (1) SALARY BONUS OPTIONS COMPENSATION(2)
------------------ -------- ------ ----- ------- ---------------
<S> <C> <C> <C> <C> <C>
Glenn R. Jones (3) 1/1/95-12/31/95 $ 2,500,067 $ -0- 125,937(8) $ 150,006
Chairman of the Board FYE 5/31/95 1,401,846 900,000 122,269(8) 135,623
and Chief Executive FYE 5/31/94 530,420 630,000 418,708(8) 136,226
Officer FYE 5/31/93 684,651 600,000 230,000(9) 13,540
James B. O'Brien (4) 1/1/95-12/31/95 $ 230,866 $ 139,870 17,000(8) $ 19,852
President FYE 5/31/95 224,961 250,000 14,387(8) 28,498
FYE 5/31/94 196,568 52,500 12,307(8) 19,404
FYE 5/31/93 196,568 85,000 6,300(8) 5,740
Kevin P. Coyle (5) 1/1/95-12/31/95 $ 177,160 $ 53,007 8,085(8) $ 11,998
Group Vice President of FYE 5/31/95 173,616 74,895 7,762(8) 15,811
Finance FYE 5/31/94 168,559 45,000 5,008(8) 12,814
FYE 5/31/93 157,530 40,000 0 6,618
Ruth E. Warren (6) 1/1/95-12/31/95 $ 163,314 $ 49,056 7,860(8) $ 9,644
Group Vice President/ FYE 5/31/95 149,854 50,126 7,418(8) 7,888
Operations FYE 5/31/94 139,052 40,500 8,000(8) 3,414
FYE 5/31/93 131,180 48,534 4,500(8) 3,414
Elizabeth M. Steele (7) 1/1/95-12/31/95 $ 164,302 $ 52,650 6,000(8) $ 11,864
Vice President and FYE 5/31/95 192,823 117,000 6,000(8) 20,655
Secretary FYE 5/31/94 187,207 30,000 0 16,080
FYE 5/31/93 187,207 36,000 0 5,480
</TABLE>
_________________
(1) The Company has changed its fiscal year from a year ending May 31 to a
calendar year ending December 31.
(2) The Company's employees are entitled to participate in a 401(k) profit
sharing plan. Certain senior employees of the Company are also
eligible to participate in a deferred compensation plan. The amounts
shown in the column reflect the Company's contributions pursuant to
these plans for the benefit of the named person's account.
(3) Mr. Jones' salary, bonus, options and all other compensation for the
transition period 6/1/95 through 12/31/95 were $1,458,391, $0, 125,937
and $87,504, respectively.
(4) Mr. O'Brien's salary, bonus, options and all other compensation for
the transition period 6/1/95 through 12/31/95 were $137,133, $139,870,
17,000 and $8,228, respectively.
(5) Mr. Coyle's salary, bonus, options and all other compensation for the
transition period 6/1/95 through 12/31/95 were $104,820, $53,007,
8,085 and $6,289, respectively.
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(6) Ms. Warren's salary, bonus, options and all other compensation for the
transition period 6/1/95 through 12/31/95 were $97,007, $49,056, 7,860
and $5,236, respectively.
(7) Ms. Steele's salary, bonus, options and all other compensation for the
transition period 6/1/95 through 12/31/95 were $83,959, $52,650, 6,000
and $6,508, respectively.
(8) Represents the number of shares of the Company's Class A Common Stock
underlying the options granted.
(9) Represents 200,000 shares of the Company's Common Stock and 30,000
shares of the Company's Class A Common Stock underlying the options
granted.
The following table sets forth information with respect to grants of
stock options during January 1, 1995 through December 31, 1995 for the
Executive Officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
- --------------------------------------------------------- -----------------------------------------------------
% OF TOTAL
OPTIONS
GRANTED TO
ALL EMPLOYEES EXERCISE
OPTIONS 1/1/95 TO PRICE EXPIRATION
NAME GRANTED(2) 12/31/95 ($/SHARE) DATE 0% ANNUAL 5% ANNUAL 10% ANNUAL
---- ---------- -------- --------- ---- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Glenn R. Jones 122,269 30.60% $12.56 01/03/2005 $ 0 $965,925 $2,447,825
125,937 32.55% $12.875 11/17/2005 $ 0 $1,020,090 $ 2,584,227
James B. O'Brien 14,387 3.60% $12.56 01/03/2005 $ 0 $113,657 $288,027
17,000 4.39% $12.875 11/17/2005 $ 0 $137,700 $348,840
Kevin P. Coyle 7,762 1.94% $12.56 01/03/2005 $ 0 $61,320 $155,392
8,085 2.09% $12.875 11/17/2005 $ 0 $65,488 $165,904
Ruth E. Warren 7,418 1.86% $12.56 01/03/2005 $ 0 $58,602 $148,508
7,860 2.03% $12.875 11/17/2005 $ 0 $63,666 $161,287
Elizabeth M. 6,000 1.50% $12.56 01/03/2005 $ 0 $47,400 $120,120
Steele 6,000 1.64% $12.875 11/17/2005 $ 0 $48,600 $123.120
</TABLE>
- -------------------
(1) The dollar amounts shown under these columns are the result of
calculations at 0%, 5% and 10% compound growth rates provided by the
Securities and Exchange Commission, and therefore are not intended to
forecast possible future appreciation of the Company's stock price.
In all cases, the appreciation is calculated from the award date to
the end of the option term.
(2) Represents the number of shares of the Company's Class A Common Stock
underlying the options granted.
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No options were exercised during the period January 1, 1995 through
December 31, 1995 by any of the Executive Officers named in the Summary
Compensation Table.
Compensation of Directors
Directors of the Company who are not full-time employees of the
Company or any of its affiliates receive $5,000 per fiscal quarter for their
services as director, with an additional $1,250 to be paid to each such
director for each regularly scheduled quarterly meeting of the Board of
Directors attended in person. No additional compensation for director service
is paid to directors who are full-time employees of the Company or any of its
affiliates. In addition, Donald L. Jacobs, a director of the Company, and
Philip R. Ladouceur, a former director of the Company, each were compensated
$5,000 during 1995 for their services to the Board of Directors in connection
with their comprehensive review of a customer management and billing system.
Employment Agreement
On December 20, 1994, the Company entered into an Employment Agreement
with Glenn R. Jones (the "Employment Agreement") pursuant to which the Company
agreed to employ Mr. Jones as Chief Executive Officer of the Company for a
period of up to eight years. Under the terms of the Employment Agreement, Mr.
Jones is to receive a base compensation of $2,500,000 in fiscal year 1995
(which approximates his fiscal year 1994 combined compensation from the Company
and Spacelink), with an annual cost of living index based adjustment. In
addition, Mr. Jones is entitled to participate in the Company's bonus, stock
option and other employee plans at a level generally commensurate with his
previous participation. No other employee of the Company has an employment
agreement with the Company.
Compensation Committee Interlocks and Insider Participation
A compensation committee was established in January 1995. Glenn R.
Jones, Donald L. Jacobs and Philip R. Ladouceur were the initial members of
the compensation committee. Mr. Ladouceur resigned as a director and as a
member of the compensation committee on September 21, 1995. Glenn R. Jones,
Derek H. Burney and Donald L. Jacobs are the current members of the
compensation committee. Mr. Jones is an executive officer and director of the
Company, and Messrs. Burney and Jacobs are directors of the Company. Mr. Jones
also serves as a director of Bell Canada International Inc., and Mr. Burney is
an executive officer of Bell Canada International Inc. Glenn R. Jones, James
B. O'Brien, Timothy J. Burke and Elizabeth M. Steele, executive officers of
the Company, serve as directors of certain of the Company's affiliates. As
individuals, these executive officers had no transactions with the Company.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information as of April 1,
1996, regarding ownership of the Company's Common Stock or Class A Common Stock
by persons (including any group) known to the Company to be beneficial owners
of more than 5% of either class of stock, the individual directors of the
Company, each of the executive officers named in the Summary Compensation Table
of the Company's Annual Report on Form 10-K, and the executive officers and
directors of the Company as a group. Under the rules of the Securities and
Exchange Commission, a person (or group of persons) is deemed to be a
"beneficial owner" of a security if he or she, directly or indirectly, has or
shares the power to vote or to direct the voting of such security, or the power
to dispose of or to direct the disposition of such security. Accordingly, more
than one person may be deemed to be a beneficial owner of the same security. A
person is also deemed to be a beneficial owner of any security which that
person has the right to acquire within 60 days.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL
BENEFICIAL OWNER (1) TITLE OF CLASS OWNERSHIP (2) PERCENT OF CLASS
-------------------- -------------- ------------- ----------------
<S> <C> <C> <C>
Jones International, Ltd. Common Stock 2,441,751(3)(4) 47.76
9697 East Mineral Avenue
Englewood, CO 80112 Class A 2,447,568(3)(5) 9.32
Common Stock
Glenn R. Jones Common Stock 2,916,151(3)(6) 57.03
9697 East Mineral Avenue
Englewood, CO 80112 Class A 2,954,382(3)(7) 11.13
Common Stock
Derek H. Burney Class A 350 less than .01
1000 rue de la Common Stock
Gauchetiere West
Montreal, Quebec,
Canada H3B 4Y8
Timothy J. Burke Common Stock 196 less than .01
9697 East Mineral Avenue
Englewood, CO 80112 Class A 4,525(8) .02
Common Stock
Kevin P. Coyle Common Stock 345(9) .01
9697 East Mineral Avenue
Englewood, CO 80112 Class A 4,513(10) .02
Common Stock
</TABLE>
12
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
William E. Frenzel Class A 400 less than .01
1775 Massachusetts Ave., N.W. Common Stock
Washington, D.C. 20036
James J. Krejci Class A 5,000 .02
1133 Race Street, 16N Common Stock
Denver, CO 80206
Christine Jones Marocco Common Stock 2,749,679(11) 53.78
25 East End Avenue, #14F
New York, NY 10288 Class A 90,757(12) .35
Common Stock
James B. O'Brien Class A 26,049(13) .10
9697 East Mineral Avenue Common Stock
Englewood, CO 80112
Daniel E. Somers Class A 100 less than .01
Bell Cablemedia House Common Stock
Upton Road
Watford
Hertfordshire WD1 7EL
Elizabeth M. Steele Class A 1,500(14) .01
9697 East Mineral Avenue Common Stock
Englewood, CO 80112
Raymond L. Vigil Common 180 less than .01
9697 East Mineral Avenue
Englewood, CO 80112 Class A 5,427(15) .02
Common Stock
Ruth E. Warren Common Stock 208 less than .01
9697 East Mineral Avenue
Englewood, CO 80112 Class A 10,918(16) .04
Common Stock
Robert B. Zoellick Class A 300 less than .01
3900 Wisconsin Avenue, N.W. Common Stock
Washington, D.C. 20016
All executive officers and Common Stock 2,955,621 57.81
directors as a group
(21 persons) Class A 3,110,873(17) 11.71
Common Stock
</TABLE>
13
<PAGE> 14
<TABLE>
<S> <C> <C> <C>
Mutuelles AXA group Class A 1,356,200(18)(23) 5.16
Vie Mutuelle Common Stock
101-100 Terrasse Boieldieu
92042 Paris La Defense France
AXA
23, Avenue Matignon
75008 Paris France
The Equitable Companies
Incorporated
787 Seventh Avenue
New York, New York
10019
Bell Canada International Common Stock 2,878,151(19)(23) 56.29
BVI VI Limited
Arawak Chamber
Road Town
Tortola, BVI
Bell Canada International Class A 9,987,500(20)(23) 38.03
BVI III Limited Common Stock
Arawak Chamber
Road Town
Tortola, BVI
The Capital Group Companies, Inc. Class A 1,462,000(21)(23) 5.57
and Common Stock
Capital Research
333 South Hope Street
Los Angeles, CA 90071
Neuberger & Berman Class A 2,185,672(22)(23) 8.32
605 Third Avenue Common Stock
New York, NY 10158
</TABLE>
(1) Directors and executive officers named in the Summary Compensation
Table who are not listed in the table do not beneficially own any of
the Company's shares. Shares shown as subject to options means that
such options are exercisable within 60 days.
(2) Unless otherwise noted, all persons indicated in the table have full
voting and investment power with respect to the share ownership
described.
(3) Glenn R. Jones, Chairman of the Board of Directors and Chief Executive
Officer of the Company, owns all of the outstanding shares of Jones
International, Ltd. ("International") and is deemed to be the
beneficial owner of all shares of the Company owned by International.
By virtue of this ownership, Mr. Jones controls approximately 41% of
the total votes to be cast by all shareholders of the Company's
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<PAGE> 15
shares on matters not requiring a class vote, because, with regard to
such matters, a share of Common Stock has one vote and a share of
Class A Common Stock has 1/10th of a vote. The holders of Class A
Common Stock, as a class, are able to elect the greater of 25% or the
next highest whole number of the Company's Board of Directors. Thus,
holders of the Class A Common Stock, as a class, are presently
entitled to elect four Directors.
(4) Includes 38,000 shares held by Jones International, Ltd.; 2,239,416
shares held by the Jones International Grantor Business Trust; 100,400
shares held by Jones Entertainment Group, Ltd.; 35,707 shares held by
Jones Space Segment, Inc.; 27,585 shares held by Jones Global Group,
Inc.; and 643 shares held by Jones Interdigital, Inc. International
may be deemed to be the beneficial owner of all shares of Common Stock
owned by Jones Entertainment Group, Ltd., Jones Space Segment, Inc.,
Jones Global Group, Inc. and Jones Interdigital, Inc.
(5) Includes 2,223,414 shares held by International; 136,946 shares held
by Jones Entertainment Group, Ltd., 48,705 shares held by Jones Space
Segment, Inc., 37,626 shares held by Jones Global Group, Inc.; and 877
shares held by Jones Interdigital, Inc. International may be deemed
to be the beneficial owner of all shares of Class A Common Stock owned
by Jones Entertainment Group, Ltd., Jones Space Segment, Inc., Jones
Global Group, Inc. and Jones Interdigital, Inc.
(6) Includes 474,400 shares held by the Glenn Jones Grantor Business
Trust; 38,000 shares held by Jones International, Ltd.; 2,239,416
shares held by the Jones International Grantor Business Trust; 100,400
shares held by Jones Entertainment Group, Ltd.; 35,707 shares held by
Jones Space Segment, Inc.; 27,585 shares held by Jones Global Group,
Inc.; and 643 shares held by Jones Interdigital, Inc.
(7) Includes 236,893 shares owned by Mr. Jones; 269,921 shares deemed to
be held by Mr. Jones pursuant to exercisable stock options; 2,223,414
shares held by International; 136,946 shares held by Jones
Entertainment Group, Ltd.; 48,705 shares held by Jones Space Segment,
Inc.; 37,626 shares held by Jones Global Group, Inc.; and 877 shares
held by Jones Interdigital, Inc.
(8) Includes 3,992 shares deemed to be held by Mr. Burke pursuant to
exercisable stock options.
(9) Includes 320 shares held by Mr. Coyle's wife.
(10) Includes 4,444 shares deemed to be held by Mr. Coyle pursuant to
exercisable stock options.
(11) Includes 8,799 shares held by Mrs. Marocco; 357 shares held by the
Joseph Michael Marocco Irrevocable Trust; 26,707 held by the Christine
Jones Marocco Irrevocable Trust; 2,239,416 shares held by the Jones
International Grantor Business Trust in which Mrs. Marocco has shared
voting power; and 474,400 shares held by the Glenn Jones Grantor
Business Trust in which Mrs. Marocco has shared voting power.
(12) Includes 44,972 shares held by Mrs. Marocco; 970 shares held by the
Joseph Michael Marocco Irrevocable Trust; 34,815 shares held by the
Christine Jones Marocco Irrevocable Trust; and 10,000 shares held by
Mrs. Marocco's husband. Mrs. Marocco disclaims beneficial ownership
of the shares held by her husband. Mrs. Marocco's husband is a
principal in a firm that may from time to time invest in the Company's
securities. Mrs. Marocco disclaims beneficial ownership of any
securities of the Company that said firm purchases or in which Mr.
Marocco may therefor have an interest.
(13) Includes 16,049 shares deemed to be held by Mr. O'Brien pursuant to
exercisable stock options.
(14) Represents shares deemed to be held by Ms. Steele pursuant to an
exercisable stock option.
(15) Includes 4,939 shares deemed to be held by Mr. Vigil pursuant to
exercisable stock options.
15
<PAGE> 16
(16) Includes 5,854 shares deemed to be held by Ms. Warren pursuant to
exercisable stock options.
(17) Includes 313,451 shares deemed to be held by various executive
officers and directors pursuant to exercisable stock options.
(18) The Mutuelles AXA group includes AXA Assurances I.A.R.D. Mutuelle, AXA
Assurances Vie Mutuelle, Alpha Assurances I.A.R.D. Mutuelle, Alpha
Assurances Vie Mutuelle and Uni Europe Assurance Mutuelle. The
Mutuelles AXA group, AXA and The Equitable Companies Incorporated have
sole voting power over 1,341,700 shares and sole dispositive power
over 1,356,200 shares.
(19) Bell Canada International Inc. ("BCI"), the sole shareholder of Bell
Canada International BVI III Limited, may be deemed to have beneficial
ownership of the 2,878,151 shares of Common Stock covered by Option
Agreements dated December 20, 1994 among Morgan Guaranty Trust Company
of New York, acting as agent for BCI, and the Glenn Jones Grantor
Business Trust, the Jones International Grantor Business Trust, Jones
Entertainment Group, Ltd., Jones Space Segment, Inc., Jones Global
Group, Inc. and Jones Interdigital, Inc.
(20) Bell Canada International BVI III Limited is a wholly-owned subsidiary
of Bell Canada International Inc., 1000 de la Gauchetiere Street West,
Suite 1100, Montreal, Quebec, Canada H3B 4Y8.
(21) Capital Guardian Trust Company and Capital Research and Management
Company, operating subsidiaries of The Capital Group Companies, Inc.,
exercised as of December 29, 1995, investment discretion with respect
to 482,000 and 980,000 shares, respectively, which was owned by
various institutional investors.
(22) Neuberger & Berman has sole voting power over 597,720 shares, shared
voting power over 1,273,400 shares and shared dispositive power over
2,185,672 shares.
(23) This information is based upon filings made by the shareholders with
the Securities and Exchange Commission, copies of which were provided
to the Company.
ITEM 13. CERTAIN TRANSACTIONS
Set forth below is a description of the Company's transactions with
Jones International, Ltd., certain of its subsidiaries and certain other
affiliates of the Company during the year ended December 31, 1995. While the
Company believes that these transactions generally are as favorable as could
have been obtained from unaffiliated third parties, in most instances no third
party bids or appraisals were obtained and certain of the transactions are by
their nature unique to the companies involved. Accordingly, no assurance is
given to such effect. In some instances the amounts of transactions have been
rounded to the nearest thousand. Certain of the transactions described below
are expected to continue during the current fiscal year.
JONES INTERNATIONAL, LTD.
Jones International, Ltd. ("International") and certain of its
subsidiaries provide various services to the Company and its managed limited
partnerships, including information and data processing services, office space
and programming services, as described below. The costs of these services are
charged to the Company, and the Company reimburses International
16
<PAGE> 17
accordingly. In some cases, a portion of certain of these expenses are
reallocated to the limited partnerships managed by the Company pursuant to the
terms of the limited partnership agreements of such limited partnerships.
JONES FINANCIAL GROUP, LTD.
Jones Financial Group, Ltd. ("Financial Group") performs services for
the Company as its agent in connection with negotiations regarding various
financial arrangements of the Company. Financial Group is owned 81% by
International and 19% by Glenn R. Jones. In December 1994, the Company entered
into a Financial Services Agreement with Financial Group pursuant to which
Financial Group has agreed to render financial advisory and related services to
the Company for a fee equal to 90% of the fees that would be charged to the
Company by unaffiliated third parties for the same or comparable purposes. The
Company will pay Financial Group an annual $1,000,000 retainer as an advance
against payments due pursuant to this agreement and will reimburse Financial
Group for its reasonable out-of-pocket expenses. The term of the Financial
Services Agreement is for eight years. Financial Group and BCI have entered
into a separate agreement pursuant to which BCI is entitled to receive one-half
of the net fees earned (gross fees less reasonable and customary operating
expenses) by Financial Group under the Financial Services Agreement. During
the year ended December 31, 1995, the Company paid Financial Group a fee of
$1,328,400 upon the Company's acquisition of the Dale City System.
JONES COMPUTER NETWORK, LTD.
Jones Computer Network, Ltd. ("JCN") is a subsidiary of Jones
Education Networks, Inc., which is controlled by International. The Company
and JCN have entered into an Affiliation Agreement whereby JCN provides
computer related video programming to cable television systems owned by the
Company and its managed partnerships. JCN charges a fee based upon the number
of subscribers receiving the programming. Payments to JCN by the Company with
respect to programming provided to cable television systems owned by the
Company for the year ended December 31, 1995 totaled approximately $488,000.
MIND EXTENSION UNIVERSITY, INC.
Cable television systems owned by the Company and its managed
partnerships distribute the video programming of Mind Extension University,
Inc. ("ME/U"), which is controlled by International, for a fee based upon the
number of subscribers receiving the programming. Payments by the Company to
ME/U with respect to programming provided to cable television systems owned by
the Company for the year ended December 31, 1995 totaled approximately
$196,000.
PRODUCT INFORMATION NETWORK, INC.
Product Information Network, Inc. ("PIN") is an affiliate of
International that provides a satellite programming service. PIN shows product
infomercials 24 hours a day, seven days a
17
<PAGE> 18
week. A portion of the revenues generated by PIN are paid to the cable
television systems that carry PIN's programming. Most of the Company's owned
cable television systems carry PIN for all or part of each day. Aggregate
payments received by the Company from PIN relating to the Company's owned cable
television systems totaled approximately $300,000 for the year ended December
31, 1995.
JONES INTERACTIVE, INC.
Jones Interactive, Inc. ("Interactive"), a wholly owned subsidiary of
International, provides information management and data processing services for
all companies affiliated with International. Charges to the various operating
companies are based on usage of computer time by each entity. The amount
charged to the Company and its managed partnerships by Interactive for the year
ended December 31, 1995 totaled $6,439,000. Approximately 25% of this amount
was paid by the Company, and the remainder was allocated to and paid by the
Company's managed partnerships.
JONES PROPERTIES, INC.
Jones Properties, Inc. is a wholly-owned subsidiary of International.
The Company is a party to a lease with Jones Properties, Inc. under which the
Company has leased a 101,500 square foot office building in Englewood,
Colorado. The lease agreement, as amended, has a 15-year term expiring July
2000, with three 5-year renewal options. The annual rent is not to exceed
$24.00 per square foot, plus operating expenses. The Company has subleased
approximately 49% of the building to International and certain other affiliates
on the same terms and conditions of the above-mentioned lease. Rent payments
to Jones Properties, Inc. by the Company, net of subleasing reimbursements, for
the year ended December 31, 1995 were approximately $1,645,000. Approximately
21% of this amount was paid by the Company, and the remainder was allocated to
and paid by the Company's managed partnerships.
_______________
In addition to the foregoing described transactions, the Company has
engaged in certain transactions in connection with the acquisition by BCI of
shares of the Company's Class A Common Stock. The transactions described below
are expected to remain in force during the Company's current calendar year.
On December 20, 1994, contemporaneous with the closing of the
acquisition by BCI of shares of the Company's Class A Common Stock,
1. International and Glenn R. Jones and certain affiliates of
International (collectively, the "Grantors") entered into option agreements
providing for the grant of options to Morgan Guaranty Trust Company of New
York, acting as agent for BCI, to purchase all of the
18
<PAGE> 19
shares of the Company's Common Stock then held, directly or indirectly, by
International, Mr. Jones and the affiliates of International in consideration
for the payment by BCI to the Grantors of an option deposit of $19.00 for each
share of the Company's Common Stock owned by Grantors on the date of the
execution of the option agreements. This option deposit payment resulted in
the Grantors receiving approximately $54,684,869 from BCI.
2. The Company entered into an Employment Agreement with Glenn R.
Jones (the "Employment Agreement") pursuant to which the Company agreed to
employ Mr. Jones as Chief Executive Officer of the Company for a period of up
to eight years. Under the terms of the Employment Agreement, Mr. Jones is to
receive a base compensation of $2,500,000 in fiscal year 1995 (which
approximates his fiscal year 1994 combined compensation from the Company and
Spacelink), with an annual cost of living index based adjustment. In addition,
Mr. Jones is entitled to participate in the Company's bonus, stock option and
other employee plans at a level generally commensurate with his previous
participation. No other employee of the Company has an employment agreement
with the Company.
3. BCI, International, Glenn R. Jones and the Company entered
into certain arrangements concerning the operation and governance of the
Company and other related matters pursuant to a Shareholders Agreement
("Shareholders Agreement"). Certain provisions of the Shareholders Agreement
grant to Mr. Jones, International and their affiliates the right to use a
number of channels on cable television systems now or hereafter owned or
controlled by the Company for distribution of their programming networks for a
period of 15 years after December 1994; BCI was also granted a similar right
for a fewer number of channels. International was granted certain
non-exclusive rights to provide the Company with goods and services on
competitive terms which will, at the Company's discretion, be pursuant to
competitive bidding or other processes. BCI was granted identical rights
pursuant to a Supply and Services Agreement among the Company and BCI.
4. The Company entered into a Supply and Services Agreement with
BCI. Pursuant to the Supply and Services Agreement, BCI will provide the
Company with access to the expert advice of personnel from BCI and its
affiliates for the equivalent of three man-years on an annual basis. The
Company will pay an annual fee of $2,000,000 to BCI during the term of the
agreement. Payments made by the Company under the Supply and Services
Agreement during the year ended December 31, 1995 totaled $2,000,000.
5. The Company entered into a Secondment Agreement with BCI.
Pursuant to the Secondment Agreement, BCI provided nine secondees during 1995.
These secondees worked for the Company and its managed partnerships. The
Company reimbursed BCI for the full employment costs of such individuals. The
Company reimbursed BCI $823,000 during the year ended December 31, 1995.
Approximately 21% of this amount was paid by the Company, and the remainder was
allocated to and paid by the Company's managed partnerships.
19
<PAGE> 20
The Company has equity investments in the following affiliated
entities:
1. The Company owns a 38% interest in Jones Global Group, Inc.
("Jones Global Group"), a Colorado corporation which is 62% owned by
International. On July 22, 1994, Jones Global Group and certain of Jones
Global Group's wholly owned subsidiaries transferred all of their interests in
their cable/telephony properties in the United Kingdom to Bell Cablemedia plc,
a public limited company incorporated under the laws of England and Wales, in
exchange for 3,663,584 American Depository Shares ("ADSs") representing
18,317,920 Ordinary Shares of Bell Cablemedia. In July 1994, Jones Global
Group sold 1,100,000 ADSs. In 1995, Jones Global Group sold an additional
444,200 ADSs.
2. On July 22, 1994, the Company and certain of its wholly owned
subsidiaries transferred all of their interests in their cable/telephony
properties in the United Kingdom to Bell Cablemedia plc in exchange for
6,035,648 ADSs representing 30,178,240 Ordinary Shares of Bell Cablemedia. As
a result of this transaction, the Company no longer owns any direct interest in
cable/telephony properties in the United Kingdom. Jones Spanish Holdings, Inc.
("Spanish Holdings") is an affiliate indirectly owned 38% by the Company and
62% by International. On October 13, 1994, Spanish Holdings and Jones
International Spanish Investments, Inc., a subsidiary of International,
transferred all of their interests in their cable/telephony properties in Spain
to Bell Cablemedia in exchange for a total of 190,148 ADSs representing 950,740
Ordinary Shares of Bell Cablemedia. Such shares subsequently were transferred
to the Company in repayment of advances made to finance such affiliates'
Spanish operations. As a result of this transaction, the Company and its
affiliates no longer own any direct interest in cable/telephony properties in
Spain. The 6,225,796 ADSs of Bell Cablemedia plc held by the Company are now
considered available for sale because of an effective shelf registration
statement that is available to the Company.
3. The Company is the general partner of Jones Intercable
Investors, L.P., a Colorado limited partnership, which was formed on September
18, 1986, and the Company owns a 1% general partner interest. In a series of
transactions, the Company purchased limited partnership units, giving the
Company an approximate 19% limited partner interest in Jones Intercable
Investors, L.P. The Company's net investment in this partnership totaled
approximately $3,982,000 at December 31, 1995. Based upon the quoted market
price of $12.38 per unit at December 31, 1995, the quoted market value of this
investment was approximately $19,709,000.
4. During 1992, the Company invested $10,000,000 in ME/U for 25%
of the stock of ME/U, which also received certain advertising avails and
administrative and marketing considerations from the Company. The number of
shares of Class A Common Stock of ME/U issued to the Company was based on the
average of two separate independent appraisals of ME/U. Through the Company's
acquisition of the assets of Jones Spacelink, Ltd. in December 1994, the
Company obtained an additional 13% interest in MEU. In 1993, 1994 and 1995,
the Company advanced a total of $20,000,000 to ME/U. On April 11, 1995, the
Company converted its advances to ME/U into shares of the Class A Common Stock
of Jones Education Networks, Inc. ("JEN") for an approximate 17% equity
interest in JEN. JEN
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<PAGE> 21
is an affiliate of International and, in addition to its 51% ownership of ME/U,
JEN owns an 81% interest in Jones Computer Network, Ltd.
5. The Company and Jones Cyber Solutions, Ltd. ("JCS"), an
indirect subsidiary of International, have formed a venture, known as Jones
Customer Service Management, L.L.C., for the purpose of developing a subscriber
billing and management system. As of December 31, 1995, the Company had
invested $5,200,000 in the venture. JCS is performing the basic system
development work for the venture and is being paid periodically on a time and
materials basis, plus 10% of the amount charged, for its own service. Upon the
completion of the billing and management system software, the Company and JCS
will have license rights to use such system in perpetuity. The venture will
also perform additional services for the Company in the implementation of the
new subscriber billing and management system. The venture intends to
subcontract such maintenance and conversion services to JCS on the basis of
time and materials plus 10% of the amount of the JCS services. The venture
will grant to JCS the exclusive right to distribute the system to third parties
for a period of five years for a commission on the license fees to be earned by
the venture from such licensing.
21
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, as
amended, the Company has duly caused this Amendment No. 1 to its Form 10-K
Transitional Report to be signed on its behalf by the undersigned hereunto duly
authorized.
JONES INTERCABLE, INC.
By: /s/ Glenn R. Jones
-----------------------------
Glenn R. Jones
Dated: April 23, 1996 Chairman of the Board and
Chief Executive Officer
22
