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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the ten months ended December 31, 1998
or
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from 3/1/98 to 12/31/98
Commission File No. 0-21974
UNITED INTERNATIONAL HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
State of Delaware 84-1116217
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4643 South Ulster Street, #1300
Denver, Colorado 80237
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 770-4001
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $0.01 per share
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 10 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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.
-----
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant, computed by reference to the last sales price of such stock, as of
the close of trading on May 3, 1999 was $2,515,083,956.
The number of shares outstanding of the Registrant's common stock as of May 3,
1999 was:
Class A Common Stock - 33,351,410 shares
Class B Common Stock - 9,733,540 shares
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<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------------------------------------------------------------
The directors and executive officers of the Company and their ages, along
with their respective position with the Company as of June 1, 1999 are set forth
below. All officers are appointed for an indefinite term serving at the pleasure
of the Board.
Name Age Position
- ---- --- --------
Gene W. Schneider 72 Chairman of the Board and Chief
Executive Officer
Michael T. Fries 36 President
Mark L. Schneider 43 Director and Executive Vice
President; Chief Executive
Officer of UPC
J. Timothy Bryan 38 President and Chief Financial
Officer of UPC
John F. Riordan 56 Director; Executive Vice
President of UPC
Albert M. Carollo 85 Director
John P. Cole 69 Director
Lawrence F. DeGeorge 54 Director
Lawrence J. DeGeorge 82 Director
Antony P. Ressler 38 Director
Curtis W. Rochelle 83 Director
Bruce H. Spector 56 Director
The number of members of the Company's Board is currently fixed at ten. The
Company's Second Restated Certificate of Incorporation provides for a classified
Board of Directors, which may have the effect of deterring hostile takeovers or
delaying changes in control or management of the Company. For purposes of
determining their terms, directors are divided into three classes. The Class I
directors, whose terms expire at the 2000 annual stockholders' meeting, include
Messrs. Carollo, Lawrence J. DeGeorge, Ressler and Mark L. Schneider. The Class
II directors, whose terms expire at the 2001 annual stockholders' meeting,
include Messrs. Cole, Lawrence F. DeGeorge and Spector. The Class III directors,
whose terms expire at the 1999 annual stockholders' meeting, include Messrs.
Riordan, Rochelle and Gene W. Schneider. Each director elected at each such
meeting will serve for a term ending on the date of the third annual
stockholders ' meeting after his election or until his successor shall have been
duly elected and qualified.
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<PAGE>
GENE W. SCHNEIDER, 72, has served as Chairman of the Board of Directors of
the Company since its inception in May 1989 and was a director of United
International Holdings, a Colorado general partnership (the "Partnership"), from
September 1989 until its dissolution in December 1993. Mr. Schneider has also
served as the Company's Chief Executive Officer since October 1995, and served
as President from October 1997 until he relinquished the title in September
1998. Mr. Schneider served as Chairman of United Artists Entertainment Company
("United Artists"), then the third largest multiple system operator in the
United States, from May 1989 until its merger with Tele-Communications, Inc. in
November 1991. He was a founder of United Cable Television Corporation ("United
Cable") in the early 1950s and, as its Chairman and Chief Executive Officer,
helped build United Cable into the eighth-largest multiple system operator in
the United States prior to its merger with United Artists in 1989. He has been
active in cable television affairs and has served on the Board of the National
Cable Television Association ("NCTA") and on numerous committees and special
projects thereof since the NCTA's inception in the early 1950s. Mr. Schneider is
one of the original inductees into the NCTA's Cable Television Pioneers. He has
also served as Chairman of C-SPAN and was involved in the formation of numerous
programming companies such as Discovery and Turner Broadcasting, and served as a
director on their respective boards. Mr. Schneider is also Chairman of the Board
of Advance Display Technologies, Inc. and is an advisor to the Supervisory Board
of UPC.
MICHAEL T. FRIES, 36, has served as President of the Company since
September 1998 and as Chairman of the Supervisory Board of UPC since February
1999. He has also served as President and Chief Executive Officer of UIH
Asia/Pacific Communications, Inc., a majority owned subsidiary of the Company
("UAP"), since June 1995 and December 1996, respectively. In addition, since
September 1998, Mr. Fries has served as the President of UIH Latin America,
Inc., a wholly-owned subsidiary of the Company ("ULA"). From March 1990 to June
1995, Mr. Fries served as Senior Vice President, Development in which capacity
he was responsible for managing the Company's acquisitions and new business
development activities, including the Company's expansion into the Asia/Pacific,
Latin America and European markets.
MARK L. SCHNEIDER, 43, has been a director of the Company since April 1993,
and Executive Vice President of the Company since December 1996. In April 1997,
Mr. Schneider also became Chief Executive Officer of UPC and is the Chairman of
its Board of Management. From April 1997 until September 1998, Mr. Schneider
served as President of UPC, and from May 1996 to December 1996, he served as the
Chief of Strategic Planning and Operational Oversight for the Company. He served
as President of the Company from July 1992 until March 1995 and as Senior Vice
President of the Company from May 1989 until July 1992. Mr. Schneider is also a
director of Advance Display Technologies, Inc.
J. TIMOTHY BRYAN, 38, has served as President and Chief Financial Officer
of UPC and as a member of its Board of Management since September 1998. He
served as a member of the Supervisory Board of UPC from December 1996 until
September 1998. He also served as the Chief Financial Officer, Treasurer and
Assistant Secretary of the Company from December 1996 until September 1998. From
1993 until Mr. Bryan joined the Company, Mr. Bryan served as the Treasurer of
Jones Financial Group, Inc., an affiliate of Jones International Limited, where
he was primarily responsible for public and private capital formation. Mr. Bryan
also served as the Treasurer of Jones Intercable, Inc. from 1990 to 1993.
JOHN F. RIORDAN, 57, has been a director of the Company since March 1998.
In March 1998, the Company appointed Mr. Riordan Executive Vice President of UPC
and in September 1998, Vice Chairman of UPC's Board of Management. Also in
September 1998, he became President of the Advanced Communications division for
UPC, where he oversees the implementation of UPC's Internet/data services and
digital distribution network. Since March 1999, he is also the Chief Executive
Officer of UPC's chello broadband. From April 1997 until March 1998, Mr. Riordan
was a member of UPC's Supervisory Board, and from 1992 until November 1998, Mr.
Riordan served as Chief Executive Officer of Princes Holdings Limited, a
multi-channel television operating company in Ireland in which the Company held
a 20% interest until its sale in November 1998.
ALBERT M. CAROLLO, 85, has been a director of the Company since April 1993
and was a director of the Partnership from December 1990 until its dissolution
in December 1993. Mr. Carollo is the Chairman of Sweetwater Television Company,
a cable company, and served as its President from 1955 until 1997. Mr. Carollo
served as a director of United Artists from December 1988 to November 1991 and
as a director of United Cable from 1974 until 1989.
JOHN P. COLE, JR., 69, has been a director of the Company since March 1998,
and became a member of the Supervisory Board of UPC in February 1999. Mr. Cole
has practiced law in Washington, D.C. since 1956 and has been counsel over the
III-2
<PAGE>
years in many landmark proceedings before the Federal Communications Commission,
reflecting the development of the cable industry. In 1966, he founded the law
firm of Cole, Raywid & Braverman, a 30 lawyer firm specializing in all aspects
of communications and media law. Mr. Cole is also a director of Century
Communications Corporation.
LAWRENCE F. DEGEORGE, 54, has been a director of the Company since June
1997. Since 1991, Mr. DeGeorge has directed venture capital investments in
telecommunications and biotechnology as Chief Executive Officer of LPL Group,
Inc., LPL Investments Group, Inc., LPL Management Group, Inc. and DeGeorge
Holding Ltd. Mr. DeGeorge is also a director of CompleTel, LLC, a multinational
provider of switched, local telecommunications and related services. He served
as President of Amphenol Corporation, a major international manufacturer of
electrical, electronic and fiber optic connectors, cable and cable assemblies,
from May 1989 to January 1991, and as Executive Vice President and Chief
Financial Officer from September 1986 to May 1989. He was also Director of
Amphenol Corporation from June 1987 until January 1991. Mr. DeGeorge is also a
director of Advance Display Technologies, Inc.
LAWRENCE J. DEGEORGE, 82, has been a director of the Company since April
1993 and was a director of the Partnership from September 1989 until its
dissolution in December 1993. Mr. DeGeorge served as Chairman of the Board and
Chief Executive Officer of Amphenol Corporation, a major international
manufacturer of electrical, electronic and fiber-optic connectors, cable and
cable assemblies, from May 1987 until its sale in May 1997. Mr. DeGeorge also
served as the Chief Executive Officer of Amphenol Corporation's subsidiary,
Times Fiber Television Communications, Inc., a major U.S. manufacturer of
coaxial cable for the cable television industry, from 1985 until the sale of
Amphenol Corporation.
ANTONY P. RESSLER, 38, has been a director of the Company since October
1993 and became a member of the Supervisory Board of UPC in February 1999. Since
its inception in 1990, Mr. Ressler has been a partner of Apollo Advisors, L.P.
and Ares Management, L.P., financial advisors to and representatives for
institutional investors with respect to securities investments. Mr. Ressler is
also a director of Allied Waste Industries, Inc., Vail Resorts, Inc., Prandium,
Inc. and Berlitz International, Inc.
CURTIS W. ROCHELLE, 83, has been a director of the Company since April 1993
and was a director of the Partnership, from September 1989 until its dissolution
in December 1993. He is a rancher in Rawlins, Wyoming, and the owner of Rochelle
Livestock. Mr. Rochelle served as a director of United Artists from December
1988 to November 1991 and as a director of United Cable from 1974 until 1989.
BRUCE H. SPECTOR, 56, has been a director of the Company since October
1993. From October 1992 through 1994, Mr. Spector served as a consultant to
Apollo Advisors, L.P., which through several funds represents institutional
investors with respect to corporate acquisitions and securities investments. In
1995, Mr. Spector became a partner of Apollo Advisors, L.P. Prior to joining
Apollo Advisors, L.P., Mr. Spector was a senior member of the Los Angeles law
firm of Stutman, Treister & Glatt Professional Corporation for nearly 25 years.
Mr. Spector is a director of Telemundo Group, Inc., Metropolis Realty Trust,
Inc. and Vail Resorts, Inc.
Gene W. Schneider and Mark L. Schneider are father and son, and Lawrence J.
DeGeorge and Lawrence F. DeGeorge are father and son. No other family
relationships exist between any other named executive officer or director of the
Company.
During the past five years, neither the above executive officers nor any
director of the Company has had any involvement in such legal proceedings as
would be material to an evaluation of his or her ability or integrity.
Effective June 23, 1999, J. Timothy Bryan is no longer President and Chief
Financial Officer of UPC. Mr. Riordan has become President of UPC as a result of
such departure.
SENIOR MANAGEMENT. The following lists other officers who are not executive
officers of the Company but who make significant contributions to the Company
and it subsidiaries.
JAMES CLARK, 44, became Vice President, Regional Operations, of the Company
May 1, 1999, where he will oversee all operations in Asia/Pacific and Latin
America. Prior to that he served as the Regional Manager for Austar
Entertainment Pty Limited, which became a subsidiary of the Company in 1997,
III-3
<PAGE>
from 1997 to May 1999. From January 1996 to 1997, Mr. Clark served as Satellite
Operations Manager at Austar Entertainment Pty Limited where he was responsible
for launching direct broadcast satellite service in rural Australia. Prior to
joining Austar Entertainment Pty Limited, from 1990 to 1995, Mr. Clark served as
Regional Vice President for the Disney Channel where he managed sales and
marketing in eight mid-west states serving over 1,000,000 subscribers.
VALERIE L. COVER, 42, has served as the Controller for the Company since
October 1990 and as a Vice President of the Company since December 1996. Ms.
Cover is responsible for the accounting, financial reporting and information
technology functions of the Company. Prior to joining the Company, she was the
Director of Corporate Accounting at United Artists from May 1989 until October
1990 and Manager of Financial Reporting at United Cable from June 1986 until May
1989.
JOHN C. PORTER, 41, has served as the Chief Operating Officer of UAP since
January 1997, and has served as the Managing Director of Austar Entertainment
Pty Limited, which became a subsidiary of the Company in 1997, since July 1997.
In these positions, Mr. Porter is senior operating liaison for
telecommunications projects in the Asia/Pacific region. From 1995 until January
1997, Mr. Porter served as the Chief Operating Officer for Austar Entertainment
Pty Limited, where he was responsible for the design and deployment of such
company's multi-channel multi-point distribution system/satellite/cable
television network. Prior to joining Austar Entertainment Pty Limited, Mr.
Porter served as the President of the Ohio Division of Time Warner, Inc., which
had over 250,000 cable customers.
ELLEN P. SPANGLER, 50, has served as Senior Vice President of Business and
Legal Affairs and Secretary of the Company since December 1996. She also became
a member of the Supervisory Board of UPC in February 1999. Ms. Spangler is
responsible for the legal operations of the Company. Prior to assuming her
current positions, since February 1991, she served as a Vice President of the
Company and her responsibilities included business and legal affairs,
programming and assisting on development projects.
BLAS TOMIC, 49, became the President of VTR Hipercable S.A., a wholly-owned
subsidiary of the Company ("VTRH") in April 1999. From 1994 to 1999, Mr. Tomic
served as Executive Member of the board of VTRH, Cia. Nacional de Telfonos and
Cia. Telfonos de Coyhaique S.A. During 1996 and 1997, Mr. Tomic served as
Executive Member of the board of CTC-VTR Comunicaciones Mviles S.A. Mr. Tomic
has also represented the Government of Chile, Ministry of Finance, in the United
States and served as executive director of, and Chilean representative at, the
Inter-American Development Bank.
TINA WILDES, 38, became the Senior Vice President of Operations and
Development Oversight of the Company in May 1998. She also became a member of
the Supervisory Board of UPC in February 1999. From October 1997 until May 1998,
Ms. Wildes served as Senior Vice President of Programming for the Company. From
December 1993 until October 1997, Ms. Wildes served as a Regional Vice President
of UIHLA. Prior to that time, Ms. Wildes served as either a director or vice
president of development, programming and operations for several of the
Company's European operating entities, including operations in Sweden, Norway,
Malta, Israel, Spain and Portugal since 1988.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended, the
Company's directors and certain of its officers, and persons holding more than
ten percent of the Company's Class A Common Stock are required to file forms
reporting their beneficial ownership of the Company's Class A Common Stock and
subsequent changes in that ownership with the Securities and Exchange
Commission. Such persons are also required to furnish the Company with copies of
all forms so filed.
Based solely upon a review of copies of such forms filed on Forms 3, 4, and
5, and amendments thereto furnished to the Company, the Company believes that
during the ten-month period ended December 31, 1998, its executive officers,
directors and greater than ten percent beneficial owners complied on a timely
basis with all Section 16(a) filing requirements, except Mr. Cole and Mr.
Riordan each filed their respective Form 3 late and Mr. Fries filed one late
report covering a disposition of securities. Also, Mr. Cole filed three late
reports, all covering acquisitions of securities. In addition, it came to the
Company's attention that Mr. Ressler and Mr. Spector failed to file their
III-4
<PAGE>
respective Form 3s upon their appointments as directors in 1993. These filings
were made in 1999. Also, the following persons failed to timely file their Form
3s, all of which filings were made in 1999: Albert & Carolyn Company (a trust),
James R. Carollo, John B. Carollo, Kathleen Jaure, Jim Rochelle, Janet
Schneider, Richard Schneider and Robert Schneider. Each of these persons may be
deemed a greater than ten percent beneficial owner of the Company as a result of
being a party to the Stockholders' Agreement. Such persons, however, disclaim
beneficial ownership of the Company securities held by other parties to the
Stockholders' Agreement. Although timely filed, the Form 5s for the ten month
period ended December 31, 1998, filed by the following persons, respectively
contained late transaction reports: (i) Mr. Curtis Rochelle included six
transactions not timely filed, all covering acquisitions; (ii) Valerie L. Cover,
Controller, included one transaction not timely filed for an acquisition, (iii)
Mr. Lawrence F. DeGeorge included one transaction not timely filed covering
securities owned upon appointment; (iv) Mr. Lawrence J. DeGeorge included one
transaction not timely filed covering securities owned upon appointment and a
restruction of his beneficial ownership; and (v) Mr. Fries included three
transactions not timely filed covering one acquisition and two stock option
grants.
COMMITTEES AND MEETINGS
The Company has an Audit Committee and a Compensation Committee. There is
no standing nomination committee of the Board.
AUDIT COMMITTEE. The members of the Audit Committee are Messrs. Carollo,
Cole and Lawrence J. DeGeorge. The Audit Committee is charged with reviewing and
monitoring the Company's financial reports and accounting practices to ascertain
that they are within acceptable limits of sound practice, to receive and review
audit reports submitted by the Company's independent auditors and to make such
recommendations to the Board as may seem appropriate to the Audit Committee to
assure that the interests of the Company are adequately protected and to review
all related party transactions and potential conflict-of-interest situations.
The Audit Committee of the Company held one meeting during the ten months ended
December 31, 1998.
COMPENSATION COMMITTEE. The members of the Compensation Committee during
the ten months ended December 31, 1998 (the "Committee"), were Messrs. Carollo,
Cole (since his appointment in March 1998), Lawrence F. DeGeorge, Lawrence J.
DeGeorge, Ressler, Rochelle and Spector. The Committee held six meetings during
the ten months ended December 31, 1998. The Committee administers the Company's
employee stock option plans, and in this capacity approves all option grants to
Company executive officers and management under the Company's 1993 Stock Option
Plan. It also makes recommendations to the Board of Directors with respect to
the compensation of the Chairman of the Board and Chief Executive Officer and
approves the compensation paid to other senior executives. The Committee's
report for the ten months ended December 31, 1998, is included in this Proxy
Statement.
During the ten months ended December 31, 1998, the Board had eight
meetings, either in person or via telephonic conference. None of the directors
attended fewer than 75% of the meetings of the Board or of any committee of
which he is a member.
ITEM 11. EXECUTIVE COMPENSATION
- --------------------------------
The following table sets forth the aggregate annual compensation for the
Company's Chief Executive Officer and each of the four other most highly
compensated executive officers for services rendered during the ten months ended
December 31, 1998, and the fiscal years ended February 28, 1998 and February 28,
1997 ("Fiscal-Dec 1998," "Fiscal-Feb 1998" and "Fiscal 1997", respectively). In
February 1999, the Board of Directors approved the change in the Company's
fiscal year end from February 28 to December 31, commencing December 31, 1998.
As a result, the information in the table for Fiscal-Dec 1998 reflects only the
10-month period of March 1, 1998 through December 31, 1998. In addition, the
information in this section reflects compensation received by the named
executive officers for all services performed for the Company and its
subsidiaries.
III-5
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Long-Term
Annual Compensation Compensation
--------------------------------------- --------------
Other Securities
Annual Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation Options(#)(1) Compensation($)
- --------------------------- ------ -------- ------------ ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Gene W. Schneider Dec 1998 $375,000 $ -- $ 5,793(2) 350,000(3) $4,327(4)
Chairman of the Board, Feb 1998 $382,981 $ -- $ -- 250,000(5) $5,599(4)
President (until 9/98) 1997 $352,212 $ -- $ -- 100,000(6) $5,529(4)
and Chief Executive Officer
Michael T. Fries Dec 1998 $250,000 $275,000(7) $ 217(8) 650,000(9) $4,309(10)
President (from 9/98) and Feb 1998 $254,269 $ -- $30,824(11) 350,000(12) $5,627(10)
Senior Vice President (until 9/98) 1997 $233,962 $ -- $ -- 10,000 $5,533(10)
President and Chief Executive
Officer, UAP
Mark L. Schneider Dec 1998 $301,923 $ -- $ 723(13) 975,000(14) $5,412(15)
Executive Vice President Feb 1998 $318,750 $ -- $86,190(11) -- $ 486(15)
Chief Executive Officer, UPC 1997 $300,000 $ -- $ -- 60,000 $ 486(15)
J. Timothy Bryan Dec 1998 $250,000 $ 46,606(16) $62,688(17) 487,500(18) $4,109(19)
President and Chief Financial Feb 1998 $244,808 $ -- $ -- 120,000(20) $5,721(19)
Officer, UPC (from 9/98), Chief 1997 $ 48,654(21) $ -- $ -- -- $1,170(19)
Financial Officer and Senior
Vice President (until 9/98)
John F, Riordan Dec 1998 $251,507(22) $ -- $40,000(23) 575,000(14) $ --
Executive Vice President, UPC Feb 1998 $ 48,493(24) $ -- $ -- -- $ --
</TABLE>
- ----------
(1) Except as otherwise noted, amounts represent the number of options with
respect to shares of the Company's Class A Common Stock granted to such
executive officers of the Company under the Company's 1993 Stock Option
Plan, as amended (the "Employee Plan").
(2) Represents the value of Mr. Schneider's personal use of the Company's
airplane.
(3) Pursuant to the 1993 Stock Option Plan, Mr. Schneider was granted options
to acquire 100,000 shares of Class of Common Stock on October 8, 1998.
Pursuant to the UAP Stock Option Plan, Mr. Schneider was granted phantom
options based on 62,500 shares of UAP Class A common stock on October 8,
1998. Pursuant to the UPC Phantom Stock Option Plan, Mr. Schneider was
granted phantom options based on 187,500 ordinary shares of UPC on
September 24, 1998.
(4) Amounts consist of matching employer contributions made by the Company
under the Company's defined contribution 401(k) plan (the "401(k) Plan") of
$3,734, $4,951 and $4,833 for Fiscal-Dec 1998, Fiscal-Feb 1998 and Fiscal
1997, respectively, with the remainder consisting of term life insurance
premiums paid by the Company for Mr. Schneider's benefit.
(5) Pursuant to the UAP Stock Option Plan, Mr. Schneider was granted options
based on 125,000 shares of UAP Class A common stock on June 6, 1997.
Pursuant to the ULA Stock Option Plan, Mr. Schneider was granted phantom
options based on 125,000 shares of ULA Class A common stock on June 6,
1997.
(6) Pursuant to the 1993 Stock Option Plan, Mr. Schneider was granted options
to acquire 100,000 shares of Class A Common Stock.
(7) Includes a $25,000 moving allowance when Mr. Fries was relocated from the
Company's Australia offices back to its principal office in Denver,
Colorado.
(8) Represents the value of Mr. Fries' personal use of the Company's airplane.
(9) Pursuant to the 1993 Stock Option Plan, Mr. Fries was granted options to
acquire 100,000 shares of Class A Common Stock on October 8, 1998. Pursuant
to the UPC Phantom Stock Option Plan, Mr. Fries was granted phantom options
based on 75,000 ordinary shares of UPC on September 24, 1998. Pursuant to
the UAP Stock Option Plan, Mr. Fries was granted phantom options based on
175,000 shares of UAP Class A common stock on October 8, 1998. Pursuant to
the ULA Stock Option Plan, Mr. Fries was granted phantom options based on
300,000 shares of ULA Class A common stock on September 18, 1998.
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<PAGE>
(10) Amounts consist of matching employer contributions made by the Company
under the Company's 401(k) Plan of $3,616, $4,979 and $4,837 for Fiscal-Dec
1998, Fiscal-Feb 1998 and Fiscal 1997, respectively, with the remainder
consisting of term life insurance premiums paid by the Company for Mr.
Fries' benefit.
(11) Amount represents payments for living expenses, including rent, relating to
foreign assignment.
(12) Pursuant to the UAP Stock Option Plan, Mr. Fries was granted phantom
options based on 350,000 shares of UAP Class A common stock on June 6,
1997.
(13) Represents the value of Mr. Schneider's personal use of the Company's
airplane.
(14) With respect to Mr. Schneider, includes an option to acquire 975,000
ordinary shares of UPC and with respect to Mr. Riordan, includes an option
to acquire 50,000 shares of Class A Common Stock and an option to acquire
525,000 ordinary shares of UPC. See table on "Option Grants in Ten Months
Ended December 31, 1998" below.
(15) Amounts consist of matching employer contributions made by the Company
under the Company's 401(k) Plan of $4,800, $0 and $0 for Fiscal-Dec 1998,
Fiscal-Feb 1998 and Fiscal 1997, respectively, with the remainder
consisting of term life insurance premiums paid by the Company for Mr.
Schneider's benefit.
(16) Includes a moving bonus of $46,606.
(17) Includes $59,000 received upon exercise of phantom stock options for ULA
and the remainder represents the value of Mr. Bryan's personal use of the
Company's airplane.
(18) Pursuant to the UPC Phantom Stock Option Plan, Mr. Bryan was granted
phantom options based on 487,500 ordinary shares of UPC on September 24,
1998.
(19) Amounts consist of matching employer contributions made by the Company
under the Company's 401(k) Plan of $3,415, $5,073 and $1,062 for Fiscal-Dec
1998, Fiscal-Feb 1998 and Fiscal 1997, respectively, with the remainder
consisting of term life insurance premiums paid by the Company for Mr.
Bryan's benefit.
(20) Pursuant to the UAP Stock Option Plan, Mr. Bryan was granted phantom
options based on 60,000 shares of UAP Class A common stock on June 6, 1997.
Pursuant to the ULA Stock Option Plan, Mr. Bryan was granted phantom
options based on 60,000 shares of ULA Class A common stock on June 6, 1997.
(21) Mr. Bryan commenced his employment with the Company in December 1996.
Accordingly, the salary information included in the table represents only
three months of employment during Fiscal-1997.
(22) Amount represents monthly consulting fees paid to Mr. Riordan during
Fiscal-Dec 1998. Mr. Riordan became an employee of UPC on April 1, 1999.
(23) Amount represents monthly payments for housing allowance.
(24) Mr. Riordan began providing consulting services to UPC in January 1998.
Accordingly, amount represents only two months of fees for Fiscal-Feb 1998.
III-7
<PAGE>
The following table sets forth information concerning options granted
by the Company to each of the executive officers named in the Summary
Compensation Table above during Fiscal-Dec 1998.
<TABLE>
<CAPTION>
Option Grants in Ten Months Ended December 31, 1998(1)
------------------------------------------------------
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (2)
----------------------------------------------------------- ----------------------------
Number of Percentage of
Securities Total Options
Underlying Granted to
Options Employees in Exercise Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- ----------- ------------- -------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gene W. Schneider
Class A Common Stock...... 100,000 27.0% $ 8.3125 10/8/08 $ 522,769 $1,324,798
UPC Shares................ 187,500(3) 5.0% NLG12.00 4/1/07 NLG1,415,013 NLG3,585,921
UAP common stock.......... 62,500(4) 7.3% $10.00 10/08/08 $ 393,059 $ 996,089
Michael T. Fries
Class A Common Stock...... 100,000 27.0% $10.375 9/18/08 $ 652,478 $1,653,507
UPC Shares................ 75,000(5) 2.0% NLG13.57 9/24/08 NLG 640,058 NLG1,622,031
UAP common stock.......... 175,000(4) 20.3% $10.00 10/08/08 $1,100,566 $2,789,049
ULA common stock.......... 300,000(4) 96.7% $ 8.98 9/18/08 $1,694,242 $4,293,542
Mark L. Schneider
Class A Common Stock...... -- -- -- -- -- --
UPC Shares................ 975,000(6) 41.0% NLG12.00 4/1/07 NLG7,358,067 NLG18,646,787
J. Timothy Bryan
Class A Common Stock...... -- -- -- -- -- --
UPC Shares................ 90,000(3) 2.4% NLG12.00 4/1/07 NLG 679,206 NLG1,721,242
UPC Shares................ 397,500(3) 10.6% NLG13.57 9/24/08 NLG3,392,305 NLG8,596,766
John F. Riordan
Class A Common Stock...... 50,000 13.5% $ 8.3125 10/8/08 $ 261,384 $ 662,399
UPC Shares................ 525,000(6) 22.1% NLG12.00 4/1/07 NLG3,962,036 NLG10,040,578
</TABLE>
(1) Except as otherwise noted, all the stock options granted during Fiscal-Dec
1998 vest in 48 equal monthly increments following the date of the grant.
Vesting of the options granted would be accelerated upon a change of
control of the Company as defined in the respective option plans.
(2) The potential gains shown are net of the option exercise price and do not
include the effect of any taxes associated with exercise. The amounts shown
are for the assumed rates of appreciation only, do not constitute
projections of future stock price performance and may not necessarily be
realized. Actual gains, if any, on stock option exercises depend on the
future performance of the Company's Class A Common Stock and UPC's ordinary
shares, respectively, continued employment of the optionee through the term
of the options and other factors.
(3) Shares subject to phantom options, which UPC may at its option pay in cash
or UPC shares upon exercise thereof, and vest in 48 equal monthly
increments from April 1, 1997. The price per share in U.S. dollars is $6.38
and has been determined based on the exchange rate of $1.8807 on December
31, 1998.
(4) Shares are the basis of phantom options, which are payable in cash upon
exercise thereof.
(5) Shares subject to phantom options, which UPC may at its option pay in cash
or UPC shares upon exercise thereof. The price per share in U.S. dollars is
$7.22 and has been determined based on the exchange rate of $1.8807 on
December 31, 1998.
(6) Number of ordinary shares of UPC to be issued upon exercise. Such option
vests in 48 equal monthly installments from April 1, 1997. The price per
share in U.S. dollars is $6.38 and has been determined based on the
exchange rate of $1.8807 on December 31, 1998.
III-8
<PAGE>
The following table sets forth information concerning the exercise of
phantom options and concerning unexercised options held by each of the executive
officers named in the Summary Compensation Table above as of the end of
Fiscal-Dec 1998.
<TABLE>
<CAPTION>
Aggregated Option Exercises in Ten Months Ended December 31, 1998 and Period-End Option Values
----------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Shares Acquired Value Underlying Unexercised In-the-Money
on Exercise (#) Realized ($) Options at FY-End (#) Options at FY-End ($)(1)
--------------- ------------ ---------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gene W. Schneider
Class A Common Stock.......... -- -- 239,167 150,833 $ 1,955,577 $ 1,390,673
UPC Shares.................... -- -- 78,125 109,375 $ 2,062,500 $ 2,887,500
UAP common stock.............. -- -- 49,479 138,021 $ -- $ --
ULA common stock.............. -- -- 46,875 78,125 $ 221,250 $ 368,750
Michael T. Fries
Class A Common Stock.......... -- -- 161,875 103,125 $ 1,465,157 $ 879,844
UPC Shares.................... -- -- 4,688 70,312 $ 119,825 $ 1,797,175
UAP Common Stock.............. -- -- 138,542 386,458 $ -- $ --
ULA Common Stock.............. -- -- 18,750 281,250 $ -- $ --
Mark L. Schneider
Class A Common Stock.......... -- -- 186,500 9,500 $ 1,605,250 $ 48,250
UPC Shares.................... -- -- 406,250 568,750 $10,725,000 $15,015,000
J. Timothy Bryan
Class A Common Stock.......... -- -- 77,500 87,500 $ 592,500 $ 656,250
UPC Shares.................... -- -- 62,344 425,156 $ 1,645,882 $11,224,118
UAP Common Stock.............. -- -- 22,500 37,500 $ -- $ --
ULA Common Stock.............. 12,500(2) $59,000 10,000 37,500 $ 47,200 $ 159,750
John F. Riordan
Class A Common Stock.......... -- -- 2,083 47,917 $ 22,783 $ 524,092
UPC Shares.................... -- -- 218,750 306,250 $ 5,775,000 $ 8,085,000
</TABLE>
(1) The value of the options for Class A Common Stock is based on the closing
price of $19.25 per share as reported by NASDAQ on December 31, 1998. UPC
sold shares in its initial public offering at $32.78 per share on February
11, 1999. Such share price is the basis for the values determined in the
above table for UPC options. The values for the phantom options of UAP and
ULA are based on the fair market value of $10.00 per share and $8.98 per
share, respectively, as determined by the Board.
(2) Represents the number of shares underlying phantom stock options which were
exercised in Fiscal-Dec 1998.
EXECUTIVE OFFICER AGREEMENTS
MARK L. SCHNEIDER. On June 1, 1995, the Company entered into a Consulting
Agreement (the "Agreement") with Mark L. Schneider, who until that time had
served as the Company's President. Mr. Schneider's Agreement is for a term
ending on May 31, 2000. Although the Agreement provides that Mr. Schneider will
be available for up to 90 days each calendar year to serve as a consultant, Mr.
Schneider and the Company have agreed that Mr. Schneider will work full time for
the Company as Chief Executive Officer of UPC. Until December 1, 1997, Mr.
Schneider received an annual fee of $300,000, thereafter the Company increased
such fee to $375,000. In addition, Mr. Schneider receives insurance and other
perquisites that are available to him in his capacity as an Executive
Vice-President of the Company or that are otherwise made available to top
executives of the Company.
All of Mr. Schneider's unvested stock options vested as of the date of the
Agreement. He will be entitled to receive additional stock options during the
consulting period, in an amount to be determined by the Board upon the
recommendation of the Chairman of the Company, but shall be entitled to receive
at least options to purchase a number of shares of the Company equal to 90% of
the average number of shares provided in options granted to the Chairman, Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer and
Executive Vice President. In June 1995, Mr. Schneider received stock options to
purchase 36,000 shares of Class A Common Stock at an exercise price of $15.75
per share. In December 1996, Mr. Schneider received stock options to purchase
60,000 shares of Class A Common Stock at an exercise price of $12.75 per share;
however, Mr. Schneider agreed to cancel 50,000 shares thereof in connection with
a grant of options by UPC.
III-9
<PAGE>
The Agreement is terminable by the Company or by Mr. Schneider. If it is
terminated by Mr. Schneider, benefits will terminate as of the date of
termination. If Mr. Schneider is terminated by the Company, or dies prior to the
end of the term of the Agreement, he or his personal representative shall
receive all payments due under the Agreement through its term.
Mr. Schneider has agreed that he will not enter into certain businesses
that would be competitive with the Company. This Agreement provides for
indemnification of Mr. Schneider by the Company to the full extent permitted by
its Certificate of Incorporation or Bylaws, any standard indemnity agreement
between the Company and its officers and directors or by applicable law. Mr.
Schneider and the Company have executed mutual releases.
J. TIMOTHY BRYAN. On October 1, 1998, the Company and UPC entered into an
Employment Agreement with J. Timothy Bryan in connection with Mr. Bryan becoming
the President and Chief Financial Officer of UPC. Until that time, Mr. Bryan had
served as the Company's Chief Financial Officer. Mr. Bryan's Employment
Agreement is for a term expiring on March 31, 2001. Under the Employment
Agreement, Mr. Bryan's initial base salary was $300,000, which the Company
increased to $330,000 on January 1, 1999. Such salary is subject to periodic
adjustments. In addition to his base salary, Mr. Bryan is entitled to tax
equalization payments and other amounts related to his non-U.S. assignments.
Upon execution of the Employment Agreement, Mr. Bryan received a one-time
moving assistance allowance of $25,000. In addition, Mr. Bryan receives a
monthly car allowance of $1,235. The Employment Agreement also provides for a
$60,000 transfer bonus payable in 30 equal monthly increments.
The Employment Agreement may be terminated at any time by the Company or
Mr. Bryan. If Mr. Bryan's employment is terminated, other than for cause as
specified in the Employment Agreement, he is entitled to receive the balance of
payments due under the remaining term of the Employment Agreement. Upon
termination for any other reason, including death or disability, only payments
accrued to termination date will be paid. Mr. Bryan left UPC and the Company
effective June 23, 1999.
COMPENSATION OF DIRECTORS
The Company compensates its outside directors at $500 per month and $1,000
per board and committee meeting ($500 for certain telephonic meetings) attended.
Directors who are also employees of the Company receive no additional
compensation for serving as directors. The Company reimburses all of its
directors for travel and out-of-pocket expenses in connection with their
attendance at meetings of the Board. In addition, under the Stock Option Plan
for Non-Employee Directors adopted June 1, 1993 (the "1993 Plan"), each
non-employee director received options for 20,000 shares of Class A Common Stock
upon the effective date of the 1993 Plan or upon election to the Board, as the
case may be. Options for an aggregate of 480,000 shares of Class A Common Stock
may be granted under the 1993 Plan. Of the options granted as of June 1, 1999,
under the 1993 Plan, for an aggregate of 360,000 shares of Class A Common Stock,
options for 140,000 shares were granted prior to a two-for-one stock split in
March 1994, resulting in options for 280,000 shares of Class A Common Stock. In
addition, options for 40,000 shares were cancelled in Fiscal-Dec 1998. Options
granted under the 1993 Plan vest 25% on the first anniversary of the respective
dates of grant and then evenly over the next 36-month period. Such vesting is
accelerated upon a "change of control" of the Company.
The non-employee directors also participate in the Company's Stock Option
Plan for Non-Employee Directors Plan adopted March 20, 1998 and approved by
stockholders on December 17, 1998 (the "1998 Plan"), pursuant to which each
non-employee director, except Messrs. Cole and Lawrence F. DeGeorge, has been
granted options to acquire 15,000 shares of Class A Common Stock at the fair
market value of the shares at the time of the grant. Messrs. Cole and Lawrence
F. DeGeorge have each been granted options for 35,000 shares of Class A Common
Stock under the 1998 Plan. Such options have also been granted at the fair
market value of the shares at the time of grant. Additional participation in the
1998 Plan is at the discretion of the Board. Options for an aggregate of 500,000
shares of Class A Common Stock may be granted under the 1998 Plan. At June 1,
1999, options for an aggregate of 145,000 shares of Class A Common Stock had
been granted. All such options vest in 48 equal monthly installments commencing
the respective dates of grant.
There are no other arrangements whereby any of the Company's directors
received compensation for services as a director during Fiscal-Dec 1998 in
addition to or in lieu of that specified by the aforementioned standard
arrangement.
III-10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board in April 1993 established the Compensation Committee
composed of members of the Board who are not employees of the Company. In June
1997, the Board passed a resolution appointing all outside directors of the
Company to be members of the Committee. During Fiscal-Dec 1998, the Committee
consisted of Messrs. Carollo, Cole, Lawrence F. DeGeorge, Lawrence J. DeGeorge,
Ressler, Rochelle and Spector. Each of such Committee members are not and have
not been officers of the Company or any of its subsidiaries. None of the
executive officers of the Company has served as a director or member of a
compensation committee of another company that had an executive officer also
serving as a director or member of the Committee of the Company.
LIMITATION OF LIABILITY AND INDEMNIFICATION
The Company's Restated Certificate of Incorporation eliminates the personal
liability of its directors to the Company and its stockholders for monetary
damages for breach of the directors' fiduciary duties in certain circumstances.
The Company's Restated Certificate of Incorporation and Bylaws provide that the
Company shall indemnify its officers and directors to the fullest extent
permitted by law. The Company believes that such indemnification covers at least
negligence and gross negligence on the part of indemnified parties.
The Company has entered into agreements to indemnify its directors and
officers, in addition to the indemnification provided for in the Company's
Restated Certificate of Incorporation and Bylaws. These agreements require the
Company, among other things, to indemnify the Company's directors and officers
for certain expenses (including attorneys' fees), judgments, fines, penalties
and settlement amounts incurred by any such person in certain actions or
proceedings, including actions by or in the right of the Company, arising out of
such person's services as a director or officer of the Company, any subsidiary
of the Company or any other company or enterprise to which the person provides
services at the request of the Company. The Company believes that these
agreements are necessary to attract and retain qualified persons as directors
and officers.
During the past five years, neither the above named executive officers nor
any director of the Company has had any involvement in such legal proceedings as
would be material to an evaluation of his ability or integrity.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
The following table sets forth as of June 1, 1999, certain information
concerning the ownership of Common Stock of all classes by (i) each stockholder
who is known by the Company to own beneficially more than 5% of the outstanding
Class A Common Stock or Class B Common Stock at such date, (ii) each director of
the Company, (iii) each named executive officer of the Company, and (iv) all
directors and named executive officers of the Company as a group. Shares of
Class B Common Stock are convertible immediately into shares of Class A Common
Stock on a one-for-one basis, and accordingly, holders of Class B Common Stock
are deemed to own the same number of shares of Class A Common Stock and are
reflected as such in the table. Such ownership information includes shares of
Common Stock that may be acquired within 60 days of June 1, 1999, through stock
options. The table below also reflects deemed beneficial ownership of Class A
Common Stock or Class B Common Stock resulting from the voting provisions of a
stockholders' agreement (the "Stockholders' Agreement") among the Company,
Apollo Cable Partners, L.P. ("Apollo") and certain stockholders of the Company.
See "Item 13. Certain Relationships and Related Transactions-The Apollo
Transaction" below. In addition to the Schedule 13G information referenced in
the table, the Company has confirmed its significant holders through a review of
Schedule 13F information available through Nasdaq.
Shares issuable within 60 days upon exercise of options, conversion of
convertible securities, exchange of exchangeable securities or upon vesting of
restricted stock awards are deemed to be outstanding for the purpose of
computing the percentage ownership and overall voting power of persons
beneficially owning such securities, but have not been deemed to be outstanding
for the purpose of computing the percentage ownership or overall voting power of
any other person. So far as is known to the Company, the persons indicated below
have sole voting and investment power with respect to the shares indicated as
owned by them, except as otherwise stated below and in the notes to the table
and except for the shares subject to the Stockholders' Agreement, which shares
are voted in accordance with the provisions thereof. The number of shares
indicated as owned by Gene W. Schneider, Michael T. Fries, Mark L. Schneider,
and J. Timothy Bryan, each a named executive officer of the Company, includes
interests in shares held by the trustee of the Company's 401(k) Plan as of
December 31, 1998. The shares held by the trustee of the Company's 401(k) Plan
for the benefit of said executive officers are voted at the discretion of the
trustee.
III-11
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership Other Beneficial Ownership, including Deemed
Than Deemed Beneficial Beneficial Ownership as a
Ownership as a Result of the Result of the
Stockholders' Agreement Stockholders' Agreement
------------------------------- -------------------------------------------------------------------
Class A Common Stock Percentage of all
and Class A Class B Outstanding
Beneficial Owner Class B Common Stock Common Stock Common Stock Common Stock
----------------- -------------------------------- ---------------------- --------------------- -------------------
Percent Percent Percent of Percent of Number Percent
Number Number of of Total Number Number of Number Number of of of Total
of Shares Shares(1) of Vote(1) of Shares Shares(2) of Shares Shares(1) Shares(1) Vote(1)
--------- --------- ---------- --------- ---------- --------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gene W. Schneider(3)(4)..... 2,683,465 6.6% 19.0% 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
Curtis W. Rochelle(3)(5).... 1,143,533 2.8% 8.0% 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
Mark L. Schneider(3)(6)..... 504,615 1.2% 2.4% 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
Lawrence F. DeGeorge(3)(7).. 381,131 * 2.7% 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
Lawrence J. DeGeorge(3)(8).. 416,964 1.0% 2.7% 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
Albert M. Carollo(3)(9).... 154,022 * * 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
John P. Cole Jr.(10)........ 71,871 * * 71,871 * -- -- * *
Antony P. Ressler(11)....... 42,812 * * 42,812 * -- -- * *
John F. Riordan(12)......... 393,906 * * 393,906 * -- -- * *
Bruce H. Spector(13)........ 42,812 * * 42,812 * -- -- * *
Michael T. Fries(14) ....... 239,835 * * 239,835 * 45,790 * * *
J. Timothy Bryan(15) ....... 21,213 * * 21,213 * -- -- * *
All directors and executive
officers as a group
(12 persons)............... 6,096,179 15.0% 36.7% 11,126,687 27.5% 9,487,752 98.1% 27.4% 75.6%
Apollo Cable Partners
L.P.(16)................... 4,261,364 10.5% 33.4% 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
Janet Schneider(17)......... 142,774 * 1.1% 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
The Gene W. Schneider
Family Trust............... 200,000 * 1.6% 10,314,238 25.5% 9,441,962 97.7% 25.4% 74.6%
Capital Research and
Management Company(18)..... 2,805,000 6.9% 2.2% 2,805,000 6.9% -- -- 6.9% 2.2%
SMALLCAP World Fund,
Inc.(18)................... 1,625,000 4.0% 1.3% 1,625,000 4.0% -- -- 4.0% 1.3%
Baron Capital Group, Inc.,
BAMCO, Inc., Baron Capital
Management, Inc. and
Ronald Baron(19)........... 2,228,900 5.5% 1.7% 2,228,900 5.5% -- -- 5.5% 1.7%
Janus Capital Corporation
and Thomas H. Bailey(20)... 3,346,540 8.2% 2.6% 3,346,540 8.3% -- -- 8.2% 2.6%
</TABLE>
* Less than 1%.
(1) The figures for the percent of number of shares and percent of total vote
are based on 31,011,347 shares of Class A Common Stock (after elimination
of shares of the Company held in treasury and by its subsidiaries) and
9,666,970 shares of Class B Common Stock outstanding on June 14, 1999. In
determining the percent of vote, each share of Class A Common Stock has one
vote per share and each share of Class B Common Stock has 10 votes per
share.
(2) The figures for the percent of number of shares in this column are based on
31,011,347 shares of Class A Common Stock (after elimination of shares of
the Company held in treasury and by its subsidiaries) and 9,441,962 shares
of Class B Common Stock held by parties to the Stockholders' Agreement.
(3) The address of Messrs. G. Schneider, Rochelle, M. Schneider, Lawrence F.
and Lawrence J. DeGeorge, and Carollo is c/o United International Holdings,
Inc., 4643 South Ulster Street, Suite 1300, Denver, Colorado 80237.
(4) Includes 273,333 shares of Class A Common Stock that are subject to
presently exercisable options and 1,683 shares of Class A Common Stock held
by the trustee of the Company's 401(k) Plan for the benefit of Mr.
Schneider. Also includes 2,403,364 shares of Class B Common Stock of which
1,531,756 shares are owned by the G. Schneider Holdings Co. (c/o United
International Holdings, Inc., 4643 South Ulster Street, Suite 1300, Denver,
Colorado 80237). The fourth through ninth columns also include 254,302
shares of Class A Common Stock, 337,873 shares of Class A Common Stock
subject to presently exercisable options, and 7,038,598 shares of Class B
Common Stock owned by other parties to the Stockholders' Agreement, as to
which Mr. Schneider disclaims beneficial ownership.
(5) Includes 42,812 shares of Class A Common Stock that are subject to
presently exercisable options. Also includes 111,184 shares of Class B
Common Stock and 16,067 shares of Class A Common Stock owned by Mr.
Rochelle's spouse Marian Rochelle (Box 996, Rawlins, Wyoming 82301) and
898,470 shares of Class B Common Stock and 75,000 shares of Class A Common
Stock owned by the Curtis Rochelle Trust. The fourth through ninth columns
include 38,456 shares of Class B Common Stock owned by Kathleen Jaure (Box
III-12
<PAGE>
321, Rawlins, Wyoming 82301), and 38,456 shares of Class B Common Stock
owned by Jim Rochelle (Box 967, Gillette, Wyoming 82717) that are excluded
from column one. The fourth through ninth columns also include 170,003
shares of Class A Common Stock, 568,394 shares of Class A Common Stock
subject to presently exercisable options, and 8,432,308 shares of Class B
Common Stock owned by other parties to the Stockholders' Agreement
(including Kathleen Jaure and Jim Rochelle), as to which Mr. Rochelle
disclaims beneficial ownership.
(6) Includes 192,458 shares of Class A Common Stock that are subject to
presently exercisable options and 789 shares of Class A Common Stock held
by the trustee of the Company's 401(k) Plan for the benefit of Mr.
Schneider. Also includes 290,368 shares of Class B Common Stock owned by
Mr. Schneider. The fourth through ninth columns also include 239,281 shares
of Class A Common Stock, 418,748 shares of Class A Common Stock subject to
presently exercisable options, and 9,151,594 shares of Class B Common Stock
owned by other parties to the Stockholders' Agreement, as to which Mr.
Schneider disclaims beneficial ownership.
(7) Includes 16,979 shares of Class A Common Stock that are subject to
presently exercisable options and 334,152 shares of Class B Common Stock.
The fourth through ninth columns also include 231,070 shares of Class A
Common Stock, 594,227 shares of Class A Common Stock subject to presently
exercisable options, and 9,107,810 shares of Class B Common Stock owned by
other parties to the Stockholders' Agreement, as to which Mr. DeGeorge
disclaims beneficial ownership.
(8) Includes 42,812 shares of Class A Common Stock that are subject to
presently exercisable options, 334,152 shares of Class B Common Stock and
20,000 shares of Class A Common Stock owned by his spouse, Florence
DeGeorge. Mr. DeGeorge disclaims beneficial ownership of such shares owned
by Mrs. DeGeorge. The fourth through ninth columns also include 221,070
shares of Class A Common Stock, 568,394 shares of Class A Common Stock
subject to presently exercisable options, and 9,107,810 shares of Class B
Common Stock owned by other parties to the Stockholders' Agreement, as to
which Mr. DeGeorge disclaims beneficial ownership.
(9) Includes 42,812 shares of Class A Common Stock that are subject to
presently exercisable options and 111,210 shares of Class B Common Stock
owned by the Carollo Company. The fourth through ninth columns include
111,206 shares of Class B Common Stock owned by Albert & Carolyn Company,
111,206 shares of Class B Common Stock owned by the James R. Carollo Living
Trust and 55,600 shares of Class B Common Stock owned by the John B.
Carollo Living Trust that are excluded from column one. The fourth through
ninth columns also include 261,070 shares of Class A Common Stock, 568,394
shares of Class A Common Stock subject to presently exercisable options,
and 9,330,752 shares of Class B Common Stock owned by other parties to the
Stockholders' Agreement (including the Albert & Carolyn Company, James R.
Carollo Living Trust and the John B. Carollo Living Trust), as to which Mr.
Carollo disclaims beneficial ownership. The address of Albert & Carolyn
Company and the John B. Carollo Living Trust is c/o Sweetwater Television
Co., P.O. Box 8, 602 Broadway, Rock Springs, Wyoming 82901. The address of
the James R. Carollo Living Trust is 32395 Highlands Road, Steamboat
Springs, Colorado 80477.
(10) Includes 15,417 shares of Class A Common Stock that are subject to
presently exercisable options.
(11) Includes 42,812 shares of Class A Common Stock that are subject to
presently exercisable options.
(12) Includes 9,375 shares of Class A Common Stock that are subject to presently
exercisable options and 384,531 shares of Class A Common Stock owned by
Riordan Communications Limited.
(13) Includes 42,812 shares of Class A Common Stock that are subject to
presently exercisable options.
(14) Includes 182,292 shares of Class A Common Stock that are subject to
presently exercisable options and 1,662 shares of Class A Common Stock held
by the trustee of the Company's 401(k) Plan for the benefit of Mr. Fries.
Also includes 45,790 shares of Class B Common Stock owned by Mr. Fries.
(15) Includes 20,832 shares of Class A Common Stock subject to presently
exercisable options and 381 shares of Class A Common Stock held by the
trustee of the Company's 401(k) Plan for the benefit of Mr. Bryan.
(16) Represents 4,261,364 shares of Class B Common Stock owned by Apollo. The
fourth through ninth columns also include 291,070 shares of Class A Common
Stock, 611,206 shares of Class A Common Stock subject to presently
exercisable options, and 5,180,598 shares of Class B Common Stock owned by
other parties to the Stockholders' Agreement, as to which Apollo disclaims
beneficial ownership. The address of Apollo is c/o Apollo Advisors, L.P.,
Two Manhattanville Road, Purchase, New York 10577. Apollo Advisors, L.P. is
the managing general partner of AIF II, L.P., the general partner of
Apollo. Antony Ressler and Bruce Spector, directors of the Company, are
also officers of Apollo Advisors, L.P. Each of Messrs. Ressler and Spector
expressly disclaims beneficial ownership of the shares held by Apollo.
III-13
<PAGE>
(17) Includes 142,774 shares of Class B Common Stock owned by The Janet
Schneider Revocable Trust. The fourth through ninth columns include 27,773
shares of Class A Common Stock owned by Richard Schneider and 43,673 shares
of Class A Common Stock owned by Robert Schneider that are excluded from
column one. The fourth through ninth columns also include 261,070 shares of
Class A Common Stock, 611,206 shares of Class A Common Stock subject to
presently exercisable options, and 9,299,188 shares of Class B Common Stock
owned by other parties to the Stockholders' Agreement (including Richard
and Robert Schneider), as to which Ms. Schneider disclaims beneficial
ownership. The address for The Janet Schneider Revocable Trust is 3500
Alpine Drive, Casper, WY 82601, the address for Richard Schneider is 3113
NW 24th Street, New Castle, Oklahoma 73065 and the address for Robert
Schneider is 6200 Prairie Ridge Road, Ames Iowa 50014.
(18) The number of shares of Class A Common Stock in the table is based upon a
Schedule 13G dated February 8, 1999, filed jointly by Capital Research and
Management Company ("Capital Research") and SMALLCAP World Fund, Inc.
("SMALLCAP") with respect to the Class A Common Stock. Capital Research, an
investment adviser, is the beneficial owner of 2,805,000 shares of Class A
Common Stock as a result of acting as investment adviser to various
investments companies. SMALLCAP is advised by Capital Research and
beneficially owns 1,625,000 shares of Class A Common Stock. The Schedule
13G reflects that Capital Research has no voting power over said shares and
sole dispositive power over 2,805,000 shares of Class A Common Stock and
SMALLCAP has sole voting power over 1,625,000 and no dispositive power. The
address of Capital Research and SMALLCAP is 333 South Hope Street, Los
Angeles, California 90071.
(19) The number of shares of Class A Common Stock in the table is based upon a
Schedule 13G dated February 3, 1999, filed by Baron Capital Group, Inc.
("BCG"), BAMCO, Inc., Baron Capital Management, Inc. ("BCM") and Ronald
Baron. The Schedule 13G reflects that BAMCO and BCM are investment advisors
and have shared voting and shared dispositive powers over 1,920,000 shares
and 308,900 shares, respectively, of Class A Common Stock. BCG and Mr.
Baron are parent holding companies of such investment advisors and share in
such powers.
(20) The number of shares of Class A Common Stock in the table is based upon a
Schedule 13G dated February 5, 1999, filed by Janus Capital Corporation
("Janus Capital") and Thomas H. Bailey, a greater than 10% owner of Janus
Capital. The Schedule 13G reflects Janus Capital and Mr. Bailey have shared
voting and dispositive powers over 3,346,540 shares of Class A Common
Stock. Janus Capital is the beneficial owner of such shares as a result of
acting as an investment advisor to several clients. The address of Janus
Capital and Mr. Bailey is 100 Fillmore Street, Denver, Colorado 80206.
No equity securities in any subsidiary of the Company, including directors'
qualifying shares, are owned by any of the Company's named executive officers or
directors, except as stated below. The following discussion sets forth ownership
information as of June 1, 1999 and within 60 days thereof with respect to stock
options.
The following executive officers and directors own options to purchase
ordinary shares and phantom options for ordinary shares of United Pan-Europe
Communications N.V., a majority-owned subsidiary of the Company ("UPC"): (i) Mr.
Gene W. Schneider beneficially owns 31,000 ordinary shares and phantom options
for 187,500 ordinary shares, of which 105,469 are exercisable, (ii) Mr. Fries
beneficially owns 3,051 ordinary shares and phantom options for 75,000 ordinary
shares, of which 15,625 are exercisable, (iii) Mr. Mark L. Schneider
beneficially owns 30,000 ordinary shares and options to purchase 975,000
ordinary shares, of which 548,438 are exercisable, (iv) Mr. Bryan beneficially
owns phantom options for 487,500 ordinary shares, of which 133,437 are
exercisable, and (v) Mr. Riordan beneficially owns 1,220 ordinary shares and
options to purchase 525,000 ordinary shares, of which 295,312 are exercisable.
With respect to the phantom options, UPC may elect to pay such options in cash
or in ordinary shares of UPC.
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In addition, the following directors beneficially own ordinary shares in
UPC: (i) Mr. Carollo beneficially owns 10,000 ordinary shares, (ii) Mr. Cole
beneficially owns 1,525 ordinary shares, (iii) Mr. Lawrence F. DeGeorge
beneficially owns 10,000 ordinary shares, (iv) Mr. Ressler beneficially owns
8,237 ordinary shares, and (v) Mr. Rochelle beneficially owns 10,678 ordinary
shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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THE APOLLO TRANSACTION
Apollo entered into a Standstill Agreement with the Company (the
"Standstill Agreement") in connection with Apollo's 1993 investment in the
Company whereby Apollo agreed for a period ending seven years after the date of
the Company's initial public offering not to purchase additional equity
securities of the Company that, when aggregated with equity securities then held
by Apollo, would exceed 32.27% of the outstanding equity securities of the
Company unless such acquisition is approved by a majority of the disinterested
members of the Board. Apollo has also agreed not to engage in the solicitation
of proxies with respect to the Company during such seven-year period. A person
purchasing Class B Common Stock from Apollo must become a party to the
Standstill Agreement unless the transfer is made (i) in a tender offer approved
by the Board or (ii) in the open market or in an underwritten public offering,
in either case where the transferor does not know the identity of the ultimate
purchaser and has no reason to believe that a person would acquire more than 10%
of the outstanding shares or voting power of the Company's equity securities. A
person purchasing Class A Common Stock from Apollo must become a party to the
Standstill Agreement unless the transferor has no reason to believe that the
ultimate purchaser would acquire more than 10% of the outstanding shares or
voting power of the Company's equity securities.
Apollo, the Company, Gene W. Schneider, G. Schneider Holdings Co., Curtis
W. Rochelle, Marian Rochelle, Mark L. Schneider, Lawrence J. DeGeorge, Albert M.
Carollo and Janet S. Schneider (collectively, the "Founders") and certain
Permitted Transferees are parties to the Stockholders' Agreement that provides
for the election of directors by such parties of three persons nominated to be
directors by Apollo and nine persons nominated to be directors by the Founders.
The number of persons Apollo and the Founders are entitled to nominate for
election as directors is subject to reduction for each group if the percentage
of the Company's voting securities beneficially owned by it is reduced below
certain levels determined without regard to shares issued after the Apollo
Transaction is consummated. These director nomination rights expire on April 12,
2003, unless earlier terminated by the agreement of Apollo and the Founders.
Apollo and the Founders each has the right to nominate one additional director
under the terms of the Stockholders' Agreement.
The Stockholders' Agreement provides that shares of Class B Common Stock
held by the Founders, the Permitted Transferees and Apollo will be converted to
shares of Class A Common Stock upon any transfer of the Class B Common Stock
unless the transferee becomes a party to the Stockholders' Agreement or unless
the transfer is one of a type that would not require the purchaser to become a
party to the Standstill Agreement if the transfer had been made by Apollo.
The Stockholders' Agreement also provides that Apollo, the Founders and the
Permitted Transferees are obligated to offer any of the Company's equity
securities or their equivalents to the Company prior to their transfer to
persons other than Apollo, the Founders, the Permitted Transferees and their
affiliates and that the Founders are obligated to permit Apollo to participate
on a pro-rata basis in any sale of Class B Common Stock by the Founders that
would result in a change of control of the Company. Apollo and partners of the
Partnership who are affiliates of the Company have been granted registration
rights for the Company's common stock held by them.
RIORDAN TRANSACTIONS
In June 1992, the Company loaned $200,000 to Riordan Communications Limited
("RCL"), a company controlled by a discretionary trust for the benefit of
certain family members of John Riordan who became a director of the Company in
March 1998. Such loan is evidenced by a promissory note and is payable together
with interest on June 30, 1999. The outstanding principal amount of the loan
bears interest at 9.5% compounded quarterly. In 1995, UIH transferred the note
to a subsidiary and in connection with the acquisition described below the note
was subsequently repaid.
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In November 1998, the Company, through its subsidiaries, acquired from RCL
(i) a 5% interest in Princes Holdings Ltd., an Irish operating system in which
the Company held a 20% interest and (ii) a 5% interest in Tara Television
Limited, an entity that provides programming services in Ireland. The aggregate
purchase price for these interests was $5,991,480 net of the loan described
above. The parties agreed the purchase price would be paid in cash. Subsequently
RCL elected to receive shares of Class A Common Stock. The Company paid such
purchase price by delivering to RCL 384,531 restricted shares of Class A Common
Stock held by a subsidiary of the Company. Upon completion of the transaction,
the Company owns 80% of Tara Television Limited. Subsequent to the transaction,
the Company sold all its interests in Princes Holdings, Ltd. (including the
interests acquired from RCL) to Tele-Communications International, Inc.
In March 1999, RCL and the Company entered into a Registration Rights
Agreement, which provides, among other things, that upon request of RCL, the
Company will register under the Securities Act of 1933, as amended, at least 50%
of the 384,531 shares of Class A Common Stock acquired by RCL in accordance with
RCL's intended method of disposition thereof. RCL has the right to request two
such registrations. The Company has agreed to pay all registration expenses
(other than underwriting discounts and commission) in connection with such
registrations. The Registration Rights Agreement will terminate when all such
shares of Class of Common Stock acquired by RCL can be sold in any 90-day period
pursuant to Rule 144 of said Act.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
UNITED INTERNATIONAL HOLDINGS, INC.
a Delaware corporation
DATE: June 24, 1999 By: /S/ Valerie L. Cover
-----------------------------------------
Valerie L. Cover
Controller and Vice President
(Principal Accounting Officer)
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