<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[x] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
JONES INTERCABLE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
JONES INTERCABLE, INC.
- --------------------------------------------------------------------------------
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11*:
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
*Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO OF JONES INTERCABLE APPEARS HERE]
9697 EAST MINERAL AVENUE
P.O. BOX 3309
ENGLEWOOD, COLORADO 80155-3309
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 17, 1996
The Annual Meeting of the Shareholders of Jones Intercable, Inc. (the
"Company") will be held at the Company's corporate offices, 9697 East Mineral
Avenue, Englewood, Colorado, on Tuesday, September 17, 1996, at 10:00 a.m.,
Mountain Time, for the following purposes:
1. To elect Directors to serve until the next annual meeting and until
their successors are duly elected and qualified.
2. To vote upon a proposal to amend the Company's Articles of
Incorporation to revise and update the Company's indemnification
obligations to the Directors and Officers of the Company.
3. To vote upon a proposal to amend the Company's Articles of
Incorporation to limit the personal liability of Directors of the Company
for monetary damages to the Company or its shareholders for breach of their
fiduciary duty of care.
4. To ratify the appointment of Arthur Andersen LLP, Certified Public
Accountants, as independent auditors for the Company for the transition
period June 1, 1995 through December 31, 1995 and for the calendar year
ending December 31, 1996.
5. To transact such other business as may properly come before the
Meeting.
Only shareholders of record at the close of business on July 31, 1996 are
entitled to notice of, and to vote at, the Meeting.
It is very important that all shareholders be represented at the Meeting. We
urge you to sign and return the enclosed proxy as promptly as possible--
whether or not you plan to attend the Meeting. The proxy should be returned in
the enclosed envelope. You may revoke the proxy at any time prior to its use
by filing with the Company a duly executed proxy bearing a later date, by
voting in person at the Annual Meeting or by giving written or oral notice of
revocation to the Secretary of the Company.
By Order of the Board of Directors
[SIGNATURE OF ELIZABETH M. STEELE APPEARS HERE]
Elizabeth M. Steele
Secretary
Dated: August 12, 1996
<PAGE>
[LOGO OF JONES INTERCABLE APPEARS HERE]
9697 EAST MINERAL AVENUE
P.O. BOX 3309
ENGLEWOOD, COLORADO 80155-3309
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD SEPTEMBER 17, 1996
Proxies in the form accompanying this statement are being solicited by the
Board of Directors of Jones Intercable, Inc. (the "Company") for use at the
Annual Meeting of Shareholders to be held on Tuesday, September 17, 1996, at
10:00 a.m., Mountain Time, at the Company's corporate offices, 9697 East
Mineral Avenue, Englewood, Colorado, and at any adjournments thereof. A proxy
may be revoked by a shareholder at any time prior to its use by filing with
the Company a duly executed proxy bearing a later date, by voting in person at
the Annual Meeting, or by giving written notice of revocation to the Secretary
of the Company.
If the enclosed proxy is properly executed and returned, the shares
represented thereby will be voted in the manner specified. If no specification
is made on the proxy, then the shares shall be voted FOR approval of the
proposals set forth in this Proxy Statement. The proxy will also be voted in
connection with the transaction of such other business as may properly come
before the Meeting or any adjournment thereof. Management knows of no matters,
other than those set forth in this Proxy Statement, to be considered at the
Meeting. If, however, any other matters properly come before the Meeting or
any adjournment thereof, the persons named in the proxy will vote such proxy
in accordance with their best judgment on any such matter. The persons named
in the proxy will also, if in their judgment it is deemed to be advisable,
vote to adjourn the Meeting from time to time.
With respect to Proposals 2 and 3, abstentions and broker non-votes will
have the same effect as a vote against the proposals. "Broker non-votes" are
proxies with respect to shares held in record name by brokers or nominees, as
to which (i) instructions have not been received from the beneficial owners or
persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power under applicable national securities exchange rules
or the instrument under which it serves in such a capacity. With respect to
the other proposals to be voted on at the Meeting, abstentions and broker non-
votes will have no impact on the outcome of the voting on such proposals.
Officers, directors and regular employees of the Company may solicit proxies
by telephone, fax or personal interview, as well as by mail. The cost of any
such solicitation will be paid by the Company. Arrangements also have been
made with brokerage firms and other custodians, nominees and fiduciaries who
hold of record Common Stock and Class A Common Stock for the forwarding of
solicitation materials to the beneficial owners thereof. The Company will
request banks, brokerage houses and other institutions, which act as nominees
or fiduciaries for owners of Common Stock and Class A Common Stock, to forward
the solicitation materials to persons for whom they hold shares and to obtain
authorization for the execution of proxies.
As of June 18, 1996, the Company's classes of capital stock entitled to vote
were its Common Stock, $.01 par value, of which 5,113,021 shares were
outstanding, and its Class A Common Stock, $.01 par value, of which 26,264,523
shares were outstanding. Only shareholders of record at the close of business
on July 31, 1996 (the "Record Date") will be entitled to notice of, and to
vote at, the meeting.
The approximate date on which this Proxy Statement is being sent to
shareholders is August 12, 1996.
<PAGE>
SHAREHOLDER PROPOSALS
The date by which shareholder proposals must be received by the Company in
order to be presented at the next Annual Meeting of Shareholders is April 15,
1997.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information as of June 18, 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,
nominees to become Directors of the Company, each of the executive officers
named in the Summary Compensation Table 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 3,029,382(3)(7) 11.38
Common Stock
Derek H. Burney Class A 350 less than .01
1000 rue de la Common Stock
Gauchetiere West
Montreal, Quebec,
Canada H3B 4Y8
Kevin P. Coyle Common Stock 345(8) .01
9697 East Mineral
Avenue
Englewood, CO 80112 Class A 4,513(9) .02
Common Stock
William E. Frenzel Class A 400 less than .01
1775 Massachusetts Common Stock
Ave., N.W.
Washington, D.C.
20036
James J. Krejci Class A 5,000 .02
1133 Race Street, Common Stock
16N
Denver, CO 80206
James B. O'Brien Class A 26,049(10) .10
9697 East Mineral Common Stock
Avenue
Englewood, CO 80112
Daniel E. Somers Class A 100 less than .01
Bell Cablemedia Common Stock
House
Upton Road
Watford
Hertfordshire WD1
7EL
Elizabeth M. Steele Class A 1,500(11) .01
9697 East Mineral Common Stock
Avenue
Englewood, CO 80112
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NAME AND
ADDRESS OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL
OWNER (1) TITLE OF CLASS OWNERSHIP (2) PERCENT OF CLASS
---------- -------------- ----------------- ----------------
<S> <C> <C> <C>
Ruth E. Warren Common Stock 208 less than .01
9697 East
Mineral Avenue
Englewood, CO
80112 Class A 10,918(12) .04
Common Stock
Robert B.
Zoellick Class A 300 less than .01
3900 Wisconsin Common Stock
Avenue, N.W.
Washington,
D.C. 20016
All executive
officers and Common Stock 2,955,245 57.80
directors as a
group
(20 persons) Class A 3,175,921(13) 11.92
Common Stock
Christine Jones
Marocco Common Stock 2,749,679(14) 53.78
25 East End
Avenue, #14F
New York, NY
10288 Class A
Common Stock 90,757(15) .35
Mutuelles AXA
group Class A 1,356,200(16)(21) 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(17)(21) 56.29
BVI VI Limited
Arawak Chamber
Road Town
Tortola, BVI
Bell Canada
International Class A 10,022,500(18)(21) 38.16
BVI III Limited Common Stock
Arawak Chamber
Road Town
Tortola, BVI
The Capital
Group
Companies, Inc. Class A 1,462,000(19)(21) 5.57
and Capital Common Stock
Research
333 South Hope
Street
Los Angeles, CA
90071
Neuberger &
Berman Class A 2,185,672(20)(21) 8.32
605 Third Common Stock
Avenue
New York, NY
10158
</TABLE>
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(1) Directors who are not listed in this beneficial ownership 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 shares
3
<PAGE>
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; 344,921 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 320 shares held by Mr. Coyle's wife.
(9) Includes 4,444 shares deemed to be held by Mr. Coyle pursuant to
exercisable stock options.
(10) Includes 16,049 shares deemed to be held by Mr. O'Brien pursuant to
exercisable stock options.
(11) Represents shares deemed to be held by Ms. Steele pursuant to an
exercisable stock option.
(12) Includes 5,854 shares deemed to be held by Ms. Warren pursuant to
exercisable stock options.
(13) Includes 379,520 shares deemed to be held by various executive officers
and directors pursuant to exercisable stock options.
(14) 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.
(15) 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.
(16) 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.
(17) Bell Canada International Inc. ("BCI"), the sole shareholder of Bell
Canada International BVI VI 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 The Bank 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.
4
<PAGE>
(18) BCI is deemed to be the beneficial owner of the 10,022,500 shares of Class
A Common Stock owned by its wholly owned subsidiary, Bell Canada
International BVI III Limited.
(19) 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.
(20) 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.
(21) This information is based upon filings made by the shareholders with the
Securities and Exchange Commission, copies of which were provided to the
Company.
PROPOSAL 1. ELECTION OF DIRECTORS
Directors are elected to hold office until the next Annual Meeting of
Shareholders and until their successors shall be elected and shall qualify. In
the absence of instructions to the contrary, the proxies designated by the
Board of Directors on the form of proxy enclosed will vote the shares
represented by them in favor of the nominees listed below. Each of the persons
nominated is currently a member of the Board of Directors. Although management
does not anticipate that such an event will occur, if a nominee named in this
Proxy Statement is unable to serve as a Director at the time of the Annual
Meeting, the proxy will be voted for a nominee to be designated by the present
Board of Directors.
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 thirteen members. Four members of the Board of
Directors are to be elected by holders of Class A Common Stock, and nine
members of the Board of Directors are to be elected by holders of Common Stock.
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.
Of the thirteen persons set forth below as nominees for the position of
Director of the Company, William E. Frenzel, Donald L. Jacobs, John A.
MacDonald and Robert B. Zoellick have been designated as nominees to be elected
by holders of Class A Common Stock. Mr. MacDonald was designated by BCI.
Messrs. Frenzel, Jacobs and Zoellick were jointly designated by Glenn R. Jones
and BCI, and they will serve as Independent Directors. 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 Sanford Zisman have been designated as
the nominees to be elected by holders of Common Stock. Messrs. Jones, Cole,
Krejci, O'Brien, Solot, Thrall and Zisman have been designated by Mr. Jones.
Messrs. Burney and Somers have been designated by BCI.
Each share of Common Stock and Class A Common Stock has one vote in the
election of the Directors to be elected by that class. The Company's Articles
of Incorporation provide that cumulative voting shall not be allowed in the
election of Directors. With respect to the Directors to be elected by the
holders of Class A Common Stock, the four nominees receiving the highest number
of votes cast in favor of their election at the
5
<PAGE>
Meeting, in person or by proxy, will be elected to the Board of Directors.
With respect to the Directors to be elected by the holders of Common Stock,
the nine nominees receiving the highest number of votes cast in favor of their
election at the Meeting, in person or by proxy, will be elected to the Board
of Directors. Pursuant to the terms of the Shareholders Agreement, to which
the Company is a party, the Company is required to recommend to the
shareholders of the Company the election to the Company's Board of Directors
of each of the nominees designated by Mr. Jones and BCI and solicit proxies
for each such nominee from all holders of voting securities entitled to vote
thereon. 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
the shareholders of the Company in favor of their mutual nominees to the
Company's Board of Directors.
DIRECTORS TO BE ELECTED BY HOLDERS OF CLASS A COMMON STOCK
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. He is 68 years old.
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. He is 58 years old.
Mr. John A. MacDonald was appointed a director of the Company on November 8,
1995. Mr. MacDonald is Chief Technology and Network Officer of Bell Canada.
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 to March 1994, Mr. MacDonald
was with NBTel for 17 years serving in various capacities, including Market
Planning Manager, Corporate Planning Manager, Manager--Systems Planning and
Development, General Manager--Corporate Information Systems, Chief Engineer,
General Manager--Engineering and Information Systems and President of
Planning. Mr. MacDonald is Chairman of Stentor Canadian Network Management. He
also serves on the Boards of Directors of Tele-Direct (Publications) Inc.,
Bell-Northern Research Ltd., SRCI, Bell Sygma, and Canarie Inc., and he is a
member of the University of New Brunswick Venture Campaign Cabinet. He is 42
years old.
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 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
6
<PAGE>
the Knight Commanders Cross for his work on German unification. Mr. Zoellick
currently serves on the boards of SID Holdings, 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. He is 43 years old.
DIRECTORS TO BE ELECTED BY HOLDERS OF COMMON STOCK
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 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.
He is 66 years old.
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 Bell Canada
International 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. He also is a director of Jones Entertainment Group, Ltd.,
Bell Cablemedia plc, Mercury Communications Limited, Videotron Holdings plc,
Tele-Direct (Publications) Inc., Teleglobe Inc., Bimcor Inc., Rio Algom
Limited, The Montreal General Hospital Corporation, The Japan Society, Moore
Corporation Limited, Northbridge Programming Inc. and certain subsidiaries of
Bell Canada International. He is 56 years old.
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 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. He is 63 years old.
7
<PAGE>
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. He is 54 years old.
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 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. He is 46 years old.
Mr. Raphael M. Solot was appointed a director of the Company in March 1996.
Mr. Solot is an attorney and has practiced law for 31 years with an emphasis
on franchise, corporate and partnership law and complex litigation. He is 63
years old.
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. He is 48 years
old.
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. Mr. Thrall is Senior Vice President--Corporate
Development for First National Net, Inc., a leading service provider for the
mortgage banking industry, and he heads First National Net's Washington, D.C.
regional office. From September 1993 through July 1996, Mr. Thrall 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 was a Regional
Vice President, Commercial Marketing with the Douglas Aircraft Company
subsidiary. Mr. Thrall is also a management and international marketing
consultant, having active assignments with Technology Solutions Company,
McDonnell Douglas Aerospace and others, and he has completed assignments with
Cheong Kang Associates (Korea), Aero Investment Alliance, Inc. and Western
Real Estate Partners, among others. He is 49 years old.
Mr. Sanford Zisman was appointed a director of the Company on June 14, 1996.
Mr. Zisman is a member of the law firm, Zisman & Ingraham, P.C. of Denver,
Colorado and has practiced law for 31 years, with an emphasis on tax, business
and estate planning and probate administration. Mr. Zisman currently serves as
a member of the Board of Directors of Saint Joseph Hospital, the largest
hospital in Colorado, and he has served as Chairman of the Board, Chairman of
the Finance Committee and Chairman of the Strategic Planning Committee of the
hospital. Since 1992, he has also served on the Board of Directors of Maxim
Series Fund, Inc., a subsidiary of Great-West Life Assurance Company. He is 56
years old.
8
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ABOVE NOMINEES.
During the transition period June 1, 1995 through December 31, 1995, the
Board of Directors of the Company met four times. The Board of Directors of the
Company took all other action by unanimous written consent, in accordance with
the provisions of the Colorado Corporation Code.
Messrs. Jones, Burney and O'Brien are the current members of the Executive
Committee of the Board of Directors, which was established in April 1985. Mr.
O'Brien was appointed to the Executive Committee in August 1993, and Mr. Burney
was appointed to the Executive Committee in January 1995. The Executive
Committee of the Board took all action during the transition period June 1,
1995 through December 31, 1995 by unanimous written consent. Donald L. Jacobs
and Robert B. Zoellick are the current members of the Audit Committee of the
Board of Directors, which was established in March 1982. The Audit Committee
did not meet during the transition period June 1, 1995 through December 31,
1995. Derek H. Burney and Daniel E. Somers are the current members of the
Executive Officer Option Committee of the Board of Directors which was
established in 1993. The Executive Officer Option Committee took all action
during the transition period June 1, 1995 through December 31, 1995 by
unanimous written consent. In January 1995, a Compensation Committee of the
Board of Directors was established; the current members of the Compensation
Committee are Glenn R. Jones, Derek H. Burney and Donald L. Jacobs. The
Compensation Committee did not meet during the transition period June 1, 1995
to December 31, 1995.
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.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
NAME AND ANNUAL COMPENSATION AWARDS
PRINCIPAL ------------------- ------------ ALL OTHER
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 Presi-
dent 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.
9
<PAGE>
(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.
(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
$6,508, respectively.
(8) Represents the number of shares of the Company's Class A Common Stock
underlying the options granted.
(9) Represents 200,000 shares of the Company's Common Stock and 30,000 shares
of the Company's Class A Common Stock underlying the options granted.
The following table sets forth information with respect to grants of stock
options during January 1, 1995 through December 31, 1995 for the Executive
Officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM (1)
- ----------------------------------------------------------- ---------------------------------------
% OF
TOTAL OPTIONS
GRANTED TO
ALL EMPLOYEES EXERCISE
OPTIONS 1/1/95 TO PRICE EXPIRATION 0%
NAME GRANTED(2) 12/31/95 ($/SHARE) DATE 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. Steele..... 6,000 1.50% $12.56 01/03/2005 $0 $ 47,400 $ 120,120
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.
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.
10
<PAGE>
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 was to receive a base compensation of $2,500,000 in fiscal year 1995
(which approximated his fiscal year 1994 combined compensation from the Company
and Jones Spacelink, Ltd.), 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 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.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Policies. The policies of the entire Board of Directors, with respect to
executive compensation, will continue to be based on the need to attract and
retain key executives and to compensate them according to (i) their
performance, (ii) the Company's overall performance and (iii) executive
compensation offered by others in the industry.
In January 1995, the Board of Directors established a Compensation Committee
to provide oversight review of all compensation plans and, in accordance with
those plans, provided guidance on certain executive compensation matters. The
current members of the Compensation Committee are Glenn R. Jones, Derek H.
Burney and Donald L. Jacobs. It is expected that this Committee, with advice
from other members of the Board of Directors and other Company management, will
continue to be responsible for executive compensation policies and decisions in
the future.
An executive's compensation consists primarily of an annual salary and
eligibility for annual bonuses and long-term incentives. The Board of Directors
does not pass on each individual item of an executive's compensation. Mr.
Jones, the Company's Chief Executive Officer, upon consultation with the
Compensation Committee, has been principally responsible for these
determinations, both as to cash and incentive amounts.
Salaries. Base salaries for executives are primarily market-based and
determined according to level of responsibility, scope and impact of decision
making. The Company utilizes annual executive compensation salary
11
<PAGE>
surveys prepared by nationally recognized compensation consulting firms which
pertain to the telecommunications and cable industries and, in general, seeks
to set executive salary levels at approximately the mid-range of the survey
data.
Bonuses. The Board believes that the basis of compensation is the current
performance of its executives, which largely is recognized through bonus
awards. It is through the bonus program that both individual and corporate
performance is recognized on a year-to-year basis. Due to the significant
impact of the federally-mandated basic cable rate reduction on the performance
of the Company's business, more emphasis was placed on certain aspects of the
Company's operations, and extraordinary effort was expended to achieve
financial objectives. A defined bonus plan based on meeting specific budgeted
revenue, cash flow and other new business growth objectives was established for
all but the most senior executives in the Company, i.e., those persons who
reported directly to Mr. Jones. For the senior executives who reported directly
to Mr. Jones, no such formula or specific factor allocation was used, and their
awards reflect a subjective evaluation of performance. While overall corporate
performance is given recognition, it is the specific performance of the
individual during the year that is given the greatest weight. Finally, through
studies available to the Company, the Board is aware of existing levels of
compensation for companies in its industry, and appropriate attention is paid
to such compensation, although individual performance remains the determinant.
Long-Term Incentives. Long-term incentives for eligible Company executives
and key associates consist of qualified and non-qualified employee stock
options which usually vest over a term of five years or more and participation
in a deferred compensation plan and/or a 401(k) plan. The stock option plan is
intended to promote the long-term success of the Company by providing eligible
key executives an opportunity to acquire a proprietary interest in the Company.
The goal of the stock option plan is to focus performance on the attainment of
long-term strategic objectives and align executive financial interests with
those of the shareholders of the Company. In 1993, the Company adopted a non-
qualified deferred compensation plan that permits a greater contribution by
executives and therefore greater matching amounts from the Company. The
competitive need to provide a realistic equity incentive for executives and to
attract and retain key executives in a competitive environment was considered
by the Board in establishing an annual long-term incentive stock option plan in
1992 for executives and certain key associates.
Stock Option Awards During 1995. During 1995, awards of ten-year stock
options covering a total of 786,511 shares of stock were made to executives and
key associates on two separate dates. (10,102 shares of stock originally
awarded pursuant to the above grants have since terminated due to resignations
from the Company.) The stock options for executives, including the Chief
Executive Officer, were awarded by the Executive Stock Option Committee and
were based on a formula of stock option multiples (based on surveys of
competitive industry long-term incentive plans and ranged from 40% to 98% of
total compensation) with the exercise prices of $12.56 and $12.875, and the
same vesting schedule of twenty-five percent per year and the same term of ten
years. Additionally, key non-executive associates received options covering 500
to 2,500 shares of stock per associate on the same terms described above. No
other significant option awards were made during the fiscal year.
Compensation of the Chief Executive Officer. The compensation of Mr. Jones as
Chief Executive Officer of the Company has been directly related to the
Company's overall performance and his specific annual contributions to that
performance. In particular, his stock option awards reflect both the Company's
performance in 1995 and, more specifically, his contribution to the direction
of the Company during this critical period in the industry. In 1995, the impact
of the reregulation of the cable television industry was felt, requiring a
major effort to deal with this issue and to react to it by developing new or
augmented revenue measures. His 1995 stock option awards also took into account
the overall growth of the Company in terms of subscriber revenues, advertising
revenues and fees from managed limited partnerships.
Pursuant to an Employment Agreement entered into between the Company and Mr.
Jones in December 1994, in connection with the acquisition by Bell Canada
International Inc. of a 30% equity interest in the Company, Mr. Jones was paid
an annual base salary of $2.5 million in 1995. Mr. Jones received a 4.8% cost
of
12
<PAGE>
living increase on December 20, 1995, increasing his base salary to $2,620,000.
In addition, Mr. Jones will continue to be eligible to participate in Company
bonus, stock option and other employee plans at a level generally commensurate
with his previous participation.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF JONES
INTERCABLE, INC.:
Glenn R. Jones Derek H. Burney Donald L. Jacobs
Notwithstanding anything to the contrary contained in any document filed by
the Company with the Securities and Exchange Commission, or elsewhere, the
foregoing report shall not be deemed to be incorporated by reference by any
general statement incorporating this proxy statement into any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent the Company specifically incorporates this report by reference therein,
and shall not be deemed soliciting materials or otherwise be deemed filed under
either of such Acts.
PERFORMANCE GRAPH
The following graph represents a comparison of total shareholder returns for
a five-year period among the Company, the Standard & Poors 500 Index and
members of the Company's peer group.
TOTAL RETURN TO SHAREHOLDER
PREPARED FOR
JONES INTERCABLE, INC.
DEC90 DEC91 DEC92 DEC93 DEC94 DEC95
- ---------------------------------------------------------------------------
JONES INTERCABLE INC -CLA 100 176.67 168.33 235.00 163.33 165.00
S&P 500 INDEX 100 130.47 140.41 154.56 156.60 215.45
PEER GROUP 100 185.09 177.51 271.38 190.65 208.95
Peer Group Companies:
- ------------------------------------------
ADELPHIA COMMUN -CL A
CABLEVISION SYSTEMS -CL A
CENTURY COMMUN -CL A
COMCAST CABLEVISION-PHILA
TCA CABLE TV INC
13
<PAGE>
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 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.
14
<PAGE>
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 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 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. On December 22, 1995, BCI transferred its rights, title
and interest in the option agreements to its wholly owned subsidiary, Bell
Canada International BVI VI Limited. On the same day, Morgan Guaranty Trust
Company of New York assigned all of its rights and obligations as agent of BCI
under the option agreements to The Bank of New York.
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
15
<PAGE>
combined compensation from the Company and Jones Spacelink, Ltd., 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.
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
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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 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.
PROPOSAL 2. TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION
TO REVISE AND UPDATE THE COMPANY'S INDEMNIFICATION OBLIGATIONS TO
THE DIRECTORS AND OFFICERS OF THE COMPANY
Management proposes to amend the Company's Articles of Incorporation to
require the Company to indemnify, to the fullest extent permitted by Colorado
law in effect from time to time, any person against all liability and expense
(including attorneys' fees) incurred by reason of the fact that such person is
or was a director or officer of the Company or, while serving as a director or
officer of the Company, by reason of the fact that such person is or was
serving at the request of the Company as a director, officer, partner, trustee,
employee, fiduciary or agent of, or in any similar managerial or fiduciary
position of, another domestic or foreign corporation or other individual or
entity or of an employee benefit plan. This proposal is intended to enable the
Company to more readily attract and retain qualified individuals to serve on
the Board of Directors by limiting the personal liability of its directors to
the fullest extent permitted by Colorado law.
The amendment would replace the current indemnification provision in the
Company's Articles of Incorporation with the following:
"The Corporation shall indemnify, to the fullest extent permitted by
applicable law in effect from time to time, any person, and the estate and
personal representative of any such person, against all liability and
expense (including attorneys' fees) incurred by reason of the fact that
such person is or was a director or officer of the Corporation or, while
serving as a director or officer of the Corporation, such person is or was
serving as a director, officer, partner, trustee, employee, fiduciary or
agent of, or in any similar managerial or fiduciary position of, another
domestic or foreign corporation or other individual or entity or of an
employee benefit plan. The Corporation shall also indemnify any person who
is serving or who has served the Corporation as a director, officer,
employee, fiduciary or agent, and such person's estate and personal
representative, to the extent and in the manner provided in any by-law,
resolution of the shareholders or directors, contract or otherwise, so long
as such provision is legally permissible."
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The current indemnification provision of the Company's Articles of
Incorporation provides that directors and officers of the Company will be
indemnified by the Company against all expenses, penalties and liabilities,
including attorneys' fees, reasonably incurred by and imposed upon them in
connection with any claim, demand, action or proceeding, whether civil or
criminal, or in connection with any settlement thereof, to which such director
or officer may be made a party or in which such director or officer may become
involved by reason of his or her being or having been a director or officer of
the Company, whether or not he or she is a director or officer at the time
such expenses, penalties or liabilities are incurred, except in cases where
such director or officer shall be finally adjudged in such action or
proceeding to be liable for willful misconduct in the performance of his or
her duties as such director or officer. The current provision is not exclusive
so it permits the Colorado statutory provisions to be implemented by Board
resolution on a case-by-case basis. And the mandatory provisions in the
Colorado statute requiring indemnification of a director or officer who is
successful in the defense of a proceeding would apply regardless of whether
the proposed amendment is adopted. In addition, a director or an officer could
apply for court ordered indemnification under the Colorado statute regardless
of whether the proposed amendment is adopted unless such director or officer
were adjudged liable for willful misconduct.
The proposed amendment would revise the Company's current indemnification
provision in that it would grant indemnification to directors and officers of
the Company "to the fullest extent permitted by applicable law in effect from
time to time." The specific provisions of the Colorado corporate statute would
in effect be incorporated by reference into the Company's Articles of
Incorporation and would be updated from time to time by legislative action. In
management's opinion, this will allow the Company to take advantage of
evolving legal developments and public policy pronouncements relating to
indemnification of directors and officers. It would also make clear that
directors and officers of the Company serving at the request of the Company as
a director of another domestic or foreign corporation also would be
indemnified by the Company. For example, the Company has the right to
designate two individuals as representatives of the Company on the Board of
Directors of Bell Cablemedia plc, an English company in which the Company owns
a minority ownership interest. The revised indemnification provision would
make clear that such representatives would be indemnified by the Company to
the fullest extent permitted by Colorado law for their service as the
Company's representatives on such board. Similar circumstances may occur in
the future, and management believes that the proposed change in the
indemnification provision will make it easier for the Company to find and
retain representatives to serve on the boards of other corporations on behalf
of the Company. The amendment would make clear that investigative and
administrative proceedings are included in the types of proceedings for which
indemnification is required and that costs spent to respond to threatened
proceedings would be indemnifiable.
If the proposal is adopted, the provisions of Colorado law relating to the
indemnification of directors and officers will be incorporated by reference
into the Company's Articles of Incorporation. As a result, the Company would
be required to indemnify a person who is or was a director of the Company or
who, while a director of the Company, served at the request of the Company as
a director, officer, partner, trustee, employee, fiduciary or agent of another
entity, provided that the director (1) conducted himself or herself in good
faith and (2) if acting in an official capacity with the Company, reasonably
believed that his or her conduct was in the Company's best interests or if, in
all other cases (except criminal) reasonably believed that his or her conduct
was at least not opposed to the Company's best interests. These standards of
conduct would apply to third party suits as well as derivative suits and,
because of the broad definition of expense and liability, include reasonable
attorneys' fees, penalties and fines. In the case of a criminal proceeding,
the Company would be required to indemnify such persons if they had conducted
themselves in good faith and had no reasonable cause to believe that their
conduct was unlawful.
If the proposal is adopted, there will still be exceptions to the power of
the Company to indemnify a director even if the director meets the standards
of conduct described above. For example, the Company would not indemnify a
director in an action by the Company or in a derivative action in which the
director has been adjudged liable to the Company. Further, a director would
not be indemnified in any other action charging that
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the director derived an improper personal benefit, whether or not such action
was in an official capacity, if the director is adjudged liable in that
proceeding on the basis that he or she derived an improper personal benefit.
In addition, the Company's power to indemnify a director with respect to a
derivative action or action by the corporation would be limited to reasonable
expenses, which is defined to include attorneys' fees.
Whether or not the proposal is adopted, the Company is required to indemnify
a person who is wholly successful, on the merits or otherwise, in the defense
of any proceeding to which the person was a party because the person is or was
a director or officer against reasonable expenses incurred by him or her in
connection with the proceeding. In addition, the Company will be entitled to
pay for or reimburse the reasonable expenses incurred by a director or officer
who was a party to a proceeding in advance of final disposition of the
proceeding if the director or officer furnishes to the Company a written
affirmation of the director's or officer's good faith belief that he or she
has met the standards of conduct described above, the director or officer
furnishes to the Company a written undertaking, executed personally or on the
director's or officer's behalf, to repay the advance if it is ultimately
determined that he or she did not meet the standard of conduct and a
determination is made that the facts then known to those making the
determination would not preclude indemnification by the Company.
Under Colorado law, a director or officer may apply for indemnification to
the court conducting the proceeding or to another court of competent
jurisdiction and such court may, after giving any notice the court considers
necessary, order indemnification of the director by the Company.
The affirmative votes of two-thirds of all votes entitled to be cast are
required to approve the proposal to amend the Company's Articles of
Incorporation to revise and update the Company's indemnification obligations
to the directors and officers of the Company. For this vote, holders of Common
Stock and Class A Common Stock will vote as a single class; holders of Common
Stock will have one vote for each share held and holders of Class A Common
Stock will have one-tenth (1/10) of a vote for each share held.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" FOR THIS PROPOSAL 2.
PROPOSAL 3. TO VOTE UPON A PROPOSAL TO AMEND THE COMPANY'S
ARTICLES OF INCORPORATION TO LIMIT THE PERSONAL LIABILITY
OF DIRECTORS OF THE COMPANY FOR MONETARY DAMAGES TO THE
COMPANY OR ITS SHAREHOLDERS FOR BREACH OF THEIR FIDUCIARY DUTY OF CARE.
Proposal 3 is intended to enable the Company to more readily attract and
retain qualified individuals to serve on the Board of Directors of the Company
by limiting the personal liability of its directors as permitted by Colorado
law. Under this proposal, directors would not bear personal liability for
monetary damages resulting from a breach of their fiduciary duty of care based
on negligent or grossly negligent conduct. Personal liability would continue
for directors with respect to any action that constituted a breach of the duty
of loyalty owed by directors to the Company and other circumstances
specifically set forth in the proposed amendment to the Company's Articles of
Incorporation.
The amendment would add the following to the Company's Articles of
Incorporation:
"No director of the Corporation shall have any personal liability for
monetary damages to the Corporation or its shareholders for breach of his
or her fiduciary duty as a director, except that this provision shall not
eliminate or limit the personal liability of a director to the Corporation
or its shareholders for monetary damages for: (i) any breach of the
director's duty of loyalty to the Corporation or its shareholders; (ii)
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) acts specified in Section 7-108-403 of
the Colorado Business Corporation Act; or (iv) any transaction from which
the director directly or indirectly derives an improper personal benefit.
Nothing contained herein will be construed to eliminate or diminish the
defenses ordinarily available to a director or to deprive any director of
any right he or she may have for contribution from any other director or
other person. If the Colorado Business Corporation Act hereafter is amended
to eliminate or limit further the
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liability of a director, then, in addition to the elimination and
limitation of liability provided by the preceding sentence, the liability
of each director shall be eliminated or limited to the fullest extent
permitted by the Colorado Business Corporation Act as so amended. Any
repeal or modification of this Article shall not adversely affect any right
or protection of a director of the Corporation under this Article as in
effect immediately prior to such repeal or modification with respect to any
liability that would have accrued, but for this Article, prior to such
repeal or modification."
Without the added protection from personal liability afforded by the proposed
amendment to the Company's Articles of Incorporation, qualified director
candidates, particularly candidates to serve as "outside" directors who receive
only minimal compensation for their services to the Company, may be unwilling
to expose themselves to the risks of claims asserting liability in their
individual capacities in connection with their service as directors.
Corporations have experienced increasing difficulty in attracting and retaining
qualified directors due to the size and nature of claims brought against
directors of other corporations. Management perceives the resulting potential
difficulty of obtaining and retaining highly qualified directors to serve on
the Board of Directors of the Company may be detrimental to the best long-term
interests of the Company and its shareholders. Although this proposal is not
being made in response to any specific resignation, threat of resignation or
refusal to serve by any director or potential director, this proposal is
believed to be an important step in increasing the ability of the Company to
attract and retain qualified directors.
In recognition of this situation, the Colorado legislature enacted a statute
designed to limit the circumstances under which directors may be found
personally liable. Colorado law permits Colorado corporations to amend their
charters, with shareholder approval, to limit the personal liability of their
directors to specifically defined circumstances. Since the adoption of this
legislation in Colorado and similar legislation in Delaware and other states,
many companies have amended their corporate charters to limit the circumstances
under which directors may be found personally liable and, as a result,
prospective directors expect this type of provision in the corporate charters
of companies. The Colorado law maintains personal liability of directors were
they to breach their duty of loyalty owed to the corporation and its
shareholders and engage in hidden self dealing by intentional misconduct
towards the corporation. In addition, liability is maintained for actions taken
prior to the adoption of the amendment by the shareholders.
The affirmative votes of two-thirds of all votes entitled to be cast are
required to approve the proposal to amend the Company's Articles of
Incorporation to limit the personal liability of directors of the Company for
monetary damages to the Company or its shareholders for breach of their
fiduciary duty of care. For this vote, holders of Common Stock and Class A
Common Stock will vote as a single class; holders of Common Stock will have one
vote for each share held and holders of Class A Common Stock will have one-
tenth (1/10) of a vote for each share held.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL 3.
PROPOSAL 4. TO RATIFY SELECTION OF AUDITORS
The Board of Directors of the Company has approved the selection of the firm
of Arthur Andersen LLP, certified public accountants, 717 Seventeenth Street,
Denver, Colorado, to serve as the independent auditors for the Company for the
transition period June 1, 1995 through December 31, 1995 and for the calendar
year ending December 31, 1996.
The Company has been informed by Arthur Andersen LLP that neither that firm
nor any of its partners has any financial interest, direct or indirect, in the
Company, and that neither that firm nor any of its partners has had any
connection with the Company in the capacity of promoter, or underwriter, voting
trustee, director, officer or employee.
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting and will be given an opportunity to make a statement if he or
she so desires, and will be available to respond to appropriate questions from
shareholders.
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<PAGE>
In order to ratify the selection of the firm of Arthur Andersen LLP as the
Company's independent auditors for the transition period June 1, 1995 through
December 31, 1995 and for the calendar year ending December 31, 1996, the
votes cast favoring the proposal at the Meeting, in person or by proxy, must
exceed the votes cast opposing the proposal. For this purpose, holders of
Common Stock and Class A Common Stock shall vote as a single class; holders of
Common Stock shall have one vote for each share held and holders of Class A
Common Stock shall have one-tenth (1/10) of a vote for each share held.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL 4.
ANNUAL REPORT AND FINANCIAL INFORMATION
Each shareholder of record as of the Record Date has been mailed a copy of
the Company's Annual Report on Form 10-K for the transition period June 1,
1995 through December 31, 1995 and a copy of the Company's Quarterly Report on
Form 10-Q for the calendar quarter ended March 31, 1996. The Company will
furnish without charge a copy of the Company's 1995 Annual Report to any
person requesting a copy in writing and stating that he was the beneficial
owner of shares of Class A Common Stock or Common Stock of the Company on the
Record Date. Requests and inquiries should be addressed to:
Ms. Kelly Swindell
Jones Intercable, Inc.
9697 East Mineral Avenue
P.O. Box 3309
Englewood, CO 80155-3309
The Company's Annual Report on Form 10-K for the transition period June 1,
1995 through December 31, 1995 and the Company's Quarterly Report on Form 10-Q
for the calendar quarter ended March 31, 1996 are not to be regarded as proxy
soliciting materials or as communications by means of which a solicitation is
to be made.
By Order of the Board of Directors,
[SIGNATURE OF ELIZABETH M. STEELE APPEARS HERE]
Elizabeth M. Steele
Vice President, Secretary
and General Counsel
August 12, 1996
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FOLD AND DETACH HERE
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JONES INTERCABLE, INC.
9697 EAST MINERAL AVENUE
P.O. BOX 3309
ENGLEWOOD, COLORADO 80155-3309
The undersigned hereby appoints Glenn R. Jones, James B. O'Brien and Eliza-
beth M. Steele, and each of them, as proxies, with the power to appoint his or
her substitute, and hereby authorizes them to represent and to vote as desig-
nated below all the shares of Class A Common Stock and Common Stock of Jones
Intercable, Inc. held of record by the undersigned on July 31, 1996 at the An-
nual Meeting of Shareholders to be held at the corporate offices of the Compa-
ny, 9697 East Mineral Avenue, Englewood, Colorado, at 10:00 a.m., Mountain
Time, on September 17, 1996, and at any adjournment thereof.
(CONTINUED ON OTHER SIDE)
<PAGE>
Please mark [X]
your votes as
indicated in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE DIRECTORS NAMED IN ITEM 1A
AND ITEM 1B AND FOR PROPOSALS 2, 3 AND 4.
WITHHELD
FOR FOR ALL
Item 1A-Election of directors by the holders
of Class A Common Stock. [_] [_]
William E. Frenzel, Donald R. Jacobs,
John A. MacDonald and Robert B. Zoellick
WITHHELD FOR: (Write that nominee's name in the space provided below).
________________________________________________________________________________
WITHHELD
FOR FOR ALL
Item 1B-Election of directors by the holders
of Common Stock. [_] [_]
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 Sanford Zisman
WITHHELD FOR: (Write that nominee's name in the space sprovided below).
________________________________________________________________________________
FOR AGAINST ABSTAIN
Proposal 2-Approval of a proposal to amend the
Company's Articles of Incorporation to revise and [_] [_] [_]
update the Company's indemnification obligations
to the Directors and Officers of the Company.
FOR AGAINST ABSTAIN
Proposal 3-Approval of a proposal to amend the
Company's Articles of Incorporation to limit the [_] [_] [_]
personal liability of Directors of the Company for
monetary damages to the Company or its shareholders
for breach of their fiduciary duty of care.
FOR AGAINST ABSTAIN
Proposal 4-Ratification of the Appointment of
Arthur Andersen LLP as the Company's independent [_] [_] [_]
auditors for the transition period June 1, 1995
through December 31, 1995 and for the calendar year
ended December 31, 1996.
FOR AGAINST ABSTAIN
Item 5-In their discretion, the Proxies are
authorized to vote upon such other business as [_] [_] [_]
may properly come before the Meeting.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted "FOR" the Directors named in Item 1A and Item 1B and "FOR" Proposals 2,
3 and 4.
WILL ATTEND [_] SECRET [_]
MEETING BALLOT
Signature(s) ______________________________________________ Date ____________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
