<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 5, 1998
REGISTRATION NO.
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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NTL INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
DELAWARE 4899 52-1822078
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
(212) 906-8440
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
</TABLE>
<TABLE>
<S> <C>
RICHARD J. LUBASCH, ESQ. COPY TO:
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND THOMAS H. KENNEDY, ESQ.
SECRETARY SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
NTL INCORPORATED 919 THIRD AVENUE
110 EAST 59TH STREET NEW YORK, NEW YORK 10022
NEW YORK, NEW YORK 10022 (212) 735-300
(212) 906-8440
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such
time or times on and after which the Registration Statement becomes effective as
the Selling Stockholders may determine.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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<CAPTION>
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PROPOSED
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Convertible Preferred Stock, par value $.01
per share................................... (1) $1,000 $140,790,000(2) $39,139.62
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Common Stock, par value $0.01 per share
(including the associated Rights to purchase
Series A Junior Participating Preferred
Stock)(3)................................... 2,910,087(4)(5) 0 0 0(6)
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</TABLE>
(1) Number of shares to be determined at time of issuance.
(2) Represents maximum aggregate offering price based on redemption of
Registrant's outstanding 9.9% Non-voting Mandatorily Redeemable Preferred
Stock ("9.9% Preferred Stock") and issuance of maximum number of additional
shares of 9.9% Preferred Stock as dividends on such 9.9% Preferred Stock.
(3) Prior to the occurrence of certain events, the Series A Junior Participating
Preferred Stock Purchase Rights will not be evidenced separately from shares
of Common Stock.
(4) Assumes "Average Market Price" (as defined in the Certificate of
Designations for the Convertible Preferred Stock) of $48.38, based on the
average of the high and low prices on the Nasdaq National Market on November
4, 1998.
(5) Such number is deemed pursuant to Rule 416 under the Securities Act of 1933,
as amended, to include such indeterminate number of shares of Common Stock
as may be issued from time to time pursuant to the terms of the 9.9%
Preferred Stock.
(6) As shares of Common Stock may be issued in lieu of Convertible Preferred
Stock, no separate fee is payable in relation thereto.
THE REGISTRANT AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
NTL INCORPORATED
FORM S-3
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION HEADING IN PROSPECTUS
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<S> <C>
1. Forepart of the Registration Statement
and Outside Front Cover of
Prospectus........................... Registration Statement Cover; Outside Front
Cover Page of Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus.................. Inside Front and Outside Back Cover Pages
of Prospectus; Where you can find more
information
3. Summary Information; Risk Factors and
Ratio of Earnings to Fixed Charges... Prospectus Summary; Risk Factors
4. Use of Proceeds........................ Use of Proceeds
5. Determination of Offering Price........ Determination of Offering Price
6. Dilution............................... *
7. Selling Security Holders............... Selling Stockholders
8. Plan of Distribution................... Plan of Distribution
9. Description of Securities to be
Registered........................... Outside Front Cover Page of Prospectus;
Description of Convertible Preferred
Stock, Description of Capital Stock;
Certain U.S. Federal Income Tax
Considerations
10. Interests of Named Experts and
Counsel.............................. Legal Matters; Experts
11. Material Changes....................... Prospectus Summary
12. Incorporation of Certain Information by
Reference............................ Where you can find more information
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.......................... *
</TABLE>
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* Omitted as inapplicable.
<PAGE> 3
Subject to Completion, Dated November 5, 1998
PROSPECTUS
The information in this prospectus is not complete and may be changed. The
selling stockholders identified in the prospectus supplement may not sell these
securities until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
[NTL LOGO]
CONVERTIBLE PREFERRED STOCK AND COMMON STOCK SHARES
NTL INCORPORATED
- - Selling stockholders who are identified in the prospectus supplement may offer
and sell an indeterminate number of:
-- shares of common stock of NTL
-- shares of convertible preferred stock of NTL
by using this prospectus.
- - The offering price for the convertible preferred stock is not set but will be
determined according to negotiation between a selling stockholder and the
prospective purchaser. The offering price for the common stock is negotiated
or, if sold on the Nasdaq National Market, at prevailing market price.
- - We may elect to issue the common stock and convertible preferred stock if we
redeem our 9.9% Non-voting Mandatorily Redeemable Preferred Stock, Series A.
The 9.9% Non-voting Mandatorily Redeemable Preferred Stock, Series A was
issued on September 22, 1998 in a private placement that we undertook in
connection with our acquisition of the operations of ComTel Limited and
Telecential Communications.
- - We are registering these securities in order to comply with the terms of a
Registration Rights Agreement between NTL and Vision Networks III B.V., dated
September 22, 1998. We entered into this agreement with Vision Networks III
B.V. in connection with our acquisition of the operations of ComTel Limited
and Telecential Communications.
- - Selling stockholders may sell their shares directly to purchasers or through
agents, underwriters or dealers on terms that will be determined at the time
of the sale. Information regarding such agents, underwriters and dealers will
be set forth in an accompanying supplement to this prospectus. Selling
stockholders will receive all of the net proceeds from the sale of their
shares and will pay all underwriting discounts and selling commissions and
certain other expenses.
- - Our common stock is traded on the Nasdaq National Market under the symbol
NTLI. On November 2, 1998, the last reported sales price of the common stock
was $49 per share. There is no public market for the convertible preferred
stock, and we do not intend to apply to the Nasdaq National Market or any
other securities exchange in order to list the convertible preferred stock.
WE URGE YOU TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE 6,
WHERE WE DESCRIBE SPECIFIC RISKS ASSOCIATED WITH THESE SECURITIES, BEFORE YOU
MAKE YOUR INVESTMENT DECISION.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is November 5, 1998
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Where you can find more information......................... 1
Summary Information -- Q & A................................ 2
Risk Factors................................................ 6
Use of Proceeds............................................. 14
Dividend Policy............................................. 14
Determination of Offering Price............................. 14
Description of Convertible Preferred Stock.................. 15
Description of Capital Stock................................ 21
Certain U.S. Federal Income Tax Considerations.............. 25
Selling Stockholders........................................ 27
Plan of Distribution........................................ 28
Enforceability of Civil Liabilities......................... 28
Legal Matters............................................... 30
Experts..................................................... 30
</TABLE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information presented in or incorporated by reference into this
prospectus constitutes "forward-looking statements" as that term is defined in
the Private Securities Litigation Reform Act. The words "believe," "anticipate,"
"should," "intend," "plan," "will," "expect," "estimates," "projects",
"positioned" and "strategy," and similar expressions identify such
forward-looking statements in this prospectus. Although we believe that our
expectations are based on reasonable assumptions within the bounds of our
knowledge of our business and operations, actual results, performance or
achievements of the Company or industry results may differ materially from our
expectations expressed or implied in those forward-looking statements. Factors
that could cause actual results to differ from expectations include the risk
factors described under the caption "Risk Factors" in this prospectus, as well
as the following:
- general economic and business conditions
- industry trends
- our ability to design network routes and install facilities
- barriers to obtaining and maintaining government licenses or approvals
- our ability to finance construction and development at a reasonable cost
and on satisfactory terms
- changes in our assumptions concerning customer acceptance, penetration,
churn rates and competition with alternative service providers
i
<PAGE> 5
WHERE YOU CAN FIND MORE INFORMATION
NTL Incorporated ("NTL") files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements, and other information concerning NTL can be read and copied at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information about the Public
Reference Room. Such reports, proxy statements and other information are also
available at the regional offices of the SEC located in New York, New York and
Chicago, Illinois. Additionally, the SEC maintains an internet site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC,
including NTL.
This prospectus is part of a registration statement on Form S-3 filed with the
SEC by NTL. The full registration statement can be obtained from the SEC as
indicated above, or from NTL.
The SEC allows NTL to "incorporate by reference" the information it files with
the SEC. This permits NTL to disclose important information to you by
referencing these filed documents. Any information referenced this way is
considered part of this prospectus, and any information filed with the SEC
subsequent to this prospectus and which is incorporated in this prospectus will
automatically be deemed to update and supersede this information.
NTL incorporates by reference the following documents which have been filed with
the SEC:
- - Our Annual Report on Form 10-K for the year ended December 31, 1997 (dated
March 30, 1998) and Form 10-K/A-1 (dated October 13, 1998),
- - Our Current Reports on Form 8-K dated February 6, 1998, March 9, 1998, March
20, 1998, June 2, 1998, June 17, 1998, August 18, 1998, October 5, 1998,
October 28, 1998, and November 3, 1998,
- - Our Registration Statement on Form S-4 (Registration Statement 333-64727),
dated September 30, 1998, and
- - Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998
(dated May 14, 1998), and June 30, 1998 (dated August 14, 1998).
NTL incorporates by reference the documents listed above and any future filings
made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act").
NTL will provide without charge upon written or oral request, a copy of any or
all of the documents which are incorporated by reference to this prospectus,
other than exhibits which are specifically incorporated by reference into such
documents. Requests should be directed to NTL Incorporated, 110 East 59th
Street, New York, New York 10022, Attention: Richard J. Lubasch, Esq., telephone
(212) 906-8440.
<PAGE> 6
SUMMARY INFORMATION - Q & A
The following information supplements, and should be read in conjunction with,
the information contained in the prospectus. This summary highlights selected
information from the prospectus to help you understand the securities. You
should read carefully the entire prospectus to understand fully the terms of the
securities, as well as the tax and other considerations that are important in
your decision to invest in the securities. You should pay special attention to
the "Risk Factors" section beginning on page 6 of this prospectus.
WHAT ARE THE SECURITIES?
The securities described in this prospectus are shares of common stock of NTL
(the "Common Stock") and convertible preferred stock of NTL (the "Convertible
Preferred Stock" and together with the Common Stock, the "Shares") which we may
issue according to the terms of our 9.9% Non-voting Mandatorily Redeemable
Preferred Stock, Series A (the "9.9% Preferred Stock"). Your rights will differ
according to your position as either a holder of Common Stock or Convertible
Preferred Stock. You should read carefully the description of the Common Stock
located on page 21, as well as the description of the Convertible Preferred
Stock beginning on page 15 in order to determine whether an investment in the
Shares is appropriate for you.
WHEN WILL THE SECURITIES BE ISSUED?
We will issue the Common Stock and/or Convertible Preferred Stock if we decide
to redeem our 9.9% Preferred Stock using the Shares, or if we decide to pay
dividends upon the Convertible Preferred Stock. The 9.9% Preferred Stock was
issued on September 22, 1998 in a private placement that we undertook in
connection with our acquisition of the operations of ComTel Limited and
Telecential Communications (the "ComTel Acquisition").
HOW MANY SHARES WILL BE ISSUED AND AT WHAT PRICE?
The number of Shares to be issued is undetermined as of the date of this
prospectus. Both the number and the price of the Shares will be determined
according to the provisions of the Certificate of Designations for the 9.9%
Preferred Stock (the "9.9% Certificate of Designations"). The Common Stock may
also be issued as a dividend on the Convertible Preferred Stock, upon mandatory
redemption or redemption by election of NTL, or upon optional conversion of the
Convertible Preferred Stock.
WHAT DISTINGUISHES THE COMMON STOCK FROM THE CONVERTIBLE PREFERRED STOCK?
Our Common Stock is traded on the Nasdaq National Market (the "Nasdaq") under
the symbol "NTLI". You may resell your Common Stock on the Nasdaq. Additionally,
as a Common Stock holder you are entitled to one vote for each share that you
own in order to participate in all decisions submitted for a shareholder vote.
The Convertible Preferred Stock currently is not listed on any national
securities exchange, and we have no intention to list the shares in the future.
Convertible Preferred Stock holders are entitled to $1,000 per share if we
redeem the Shares. Additionally, such holders are entitled to receive cumulative
dividends according to the following terms:
- - dividends will be declared by the Board of Directors of NTL out of legally
available funds in preference to dividends on any Junior Stock (as defined in
the "Description of Convertible Preferred Stock" section in this prospectus),
- - dividends will be paid at a rate determined at the time of their issuance such
that an independent investment banker will certify that the dividend payments
are not less than an amount equal to $1,000 together with the value of
dividends accrued but paid up to the
2
<PAGE> 7
\date of the Convertible Preferred Stock redemption, and
- - dividends may be paid in the form of Common Stock or additional Convertible
Preferred Stock.
We will not issue any other shares of our capital stock which rank senior to the
Convertible Preferred Stock with respect to liquidation of NTL. Additionally,
Convertible Preferred Stock holders have the option to convert their preferred
shares into Common Stock.
WHO IS NTL INCORPORATED?
NTL is a leading communications company operating in the United Kingdom ("UK").
We provide residential, business and wholesale customers with the following
services:
- - Residential Telecoms and Televisions Services, including residential
telephony, cable television ("CATV") and Internet access services,
- - National Telecoms Services, including national business telecoms, national and
international carrier telecommunications, and satellite and radio
communications services, and
- - Broadcast Services, including digital and analog television and radio
broadcast transmission services.
NTL provides its broad range of services over local, national and international
network infrastructure. We operate:
- - advanced local broadband networks serving entire communities throughout NTL's
regional franchise areas,
- - the UK's first synchronous digital hierarchy ("SDH") backbone
telecommunications network,
- - satellite earth stations and radio communications facilities from our tower
sites across the UK, and
- - a broadcast transmission network which provides national, regional and local
analog and digital transmission services to customers throughout the UK.
In March 1997, we changed our name from International CableTel Incorporated to
NTL Incorporated. The name change reflects our acquisition of NTL Group Limited
in 1996, as well as our goal to capitalize on NTL Group Limited's 30-year
history in the UK as a provider of reliable communications services.
WHAT RECENT DEVELOPMENTS HAVE IMPACTED NTL?
PARTNERS ACQUISITION. On October 29, 1998, we completed the acquisition of
Comcast UK Cable Partners Limited ("Partners"). Partners' shareholders received
0.3745 shares of the Common Stock for each Partners' Class A Common Share and
Class B Common Share.
PROPOSED DIAMOND ACQUISITION. On June 16, 1998, we entered into an acquisition
agreement (the "Diamond Agreement") with the shareholders of Diamond Cable
Communications, plc ("Diamond"). Pursuant to this agreement, on the closing date
of the Diamond transaction, we will transfer to each shareholder of Diamond one
share of Common Stock for each four issued and outstanding ordinary shares, par
value 2.5 pence per share, and each deferred share, par value 25 pence per
share, of Diamond. The agreement provides for adjustment of such consideration
if the proposed closing date changes and the stipulated average sales price of
the Common Stock decreases. This agreement requires us to issue approximately
15.2 million shares of Common Stock in connection with the Diamond transaction.
NTL must receive stockholder approval of the issuance of the Common Stock in
order to consummate this transaction.
COMTEL ACQUISITION. We recently acquired the operations of ComTel Limited and
Telecential Communications (collectively, "ComTel") from Vision Networks III
B.V. ("Vision Networks") for a total of approximately L550 million in two
stages. In the first stage, we acquired certain of the ComTel properties for
L275 million in cash. In the second stage, which was completed on September 22,
1998, we acquired the remaining ComTel properties for L200 million in cash and
L75 million in NTL 9.9% Preferred Stock. This acquisition did not require a vote
of NTL stockholders.
3
<PAGE> 8
REDEMPTION OF 10 7/8% NOTES. On October 15, 1998, we redeemed our 10 7/8% Notes
Due 2003 ("the 10 7/8% Notes"). Prior to such redemption, we used cash on hand
to deposit in trust with our trustee an amount equal to approximately $218.6
million (103.107% of accreted value) to pay the redemption price (including
principal) on the 10 7/8% Notes, thereby defeasing certain of our obligations
under the indenture governing the 10 7/8% Notes. In July 1998, using funds
deposited with the trustee, we purchased from one holder for $65 million a
portion of the 10 7/8% Notes with an accreted value of $62.2 million.
SALE OF 11 1/2% SENIOR NOTES DUE 2008 AND 12 3/8% SENIOR DEFERRED COUPON NOTES
DUE 2008. On October 26, 1998, we priced an issue of $625 million aggregate
principal amount of 11 1/2% Senior Notes (the "11 1/2% Notes"), which closed on
November 2, 1998. On October 30, 1998, we priced an issue of $450 million
aggregate principal amount at maturity of our 12 3/8% Senior Deferred Coupon
Notes Due 2008 (the "12 3/8% Notes"). The net proceeds of these offerings will
be used to refinance existing indebtedness. The 11 1/2% Notes and the 12 3/8%
Notes have not been registered under the Securities Act of 1933, as amended (the
"Securities Act") or any state securities laws, and unless so registered, may
not be offered or sold except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act and
applicable state securities laws. Accordingly, the 11 1/2% Notes and the 12 3/8%
Notes have been offered and sold within the United States under Rule 144A only
to "qualified institutional buyers" and outside the United States in accordance
with Regulation S under the Securities Act.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
NTL's earnings were insufficient to cover fixed charges by the following
approximate amounts for the following periods:
- - six months ended June 30, 1998: $201.0 million
and the years ended December 31,
- - 1997: $355.4 million
- - 1996: $257.1 million
- - 1995: $105.4 million
- - 1994: $31.8 million
- - 1993: $10.4 million.
Earnings for the six months ended June 30, 1998 and the year ended December 31,
1997 were insufficient to cover combined fixed charges and dividends on
preferred stock of NTL (the "Preferred Stock") by $208.3 million and $367.4
million. Fixed charges consist of interest expense, including capitalized
interest, amortization of fees related to debt financing and rent expense deemed
to be interest.
PRICE RANGE OF COMMON STOCK
Our Common Stock is quoted and traded on the Nasdaq under the symbol "NTLI."
From October 14, 1993 through March 26, 1997, the Common Stock was quoted and
traded on the Nasdaq under the symbol "ICTL." The following table sets forth,
for the periods indicated, the high and low reported sale prices per share of
Common Stock, as reported on the Nasdaq.
<TABLE>
<CAPTION>
HIGH LOW
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<S> <C> <C>
1995
- ---------------------------
First Quarter.............. $26 5/8 $20 1/4
Second Quarter............. 26 1/4 20 1/4
Third Quarter.............. 28 7/8 24 3/8
Fourth Quarter............. 28 1/4 23 5/8
1996
- ---------------------------
First Quarter.............. $30 1/8 $21 5/8
Second Quarter............. 34 1/8 27 3/4
Third Quarter.............. 30 22 5/8
Fourth Quarter............. 28 1/4 22 5/8
1997
- ---------------------------
First Quarter.............. $26 3/4 $18 1/8
Second Quarter............. 27 1/4 19
Third Quarter.............. 27 7/8 20 1/8
Fourth Quarter............. 29 3/8 25 1/4
</TABLE>
4
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<TABLE>
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HIGH LOW
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1998
- ---------------------------
First Quarter.............. $45 3/4 $26 3/4
Second Quarter............. 53 1/2 37 5/8
Third Quarter.............. 65 35 1/2
Fourth Quarter (through
November 2, 1998)........ 49 33 7/32
</TABLE>
On November 2, 1998, the closing sale price per share of the Common Stock, as
reported on the Nasdaq, was $49.00. As of November 2, 1998, there were
approximately 558 record holders of the Common Stock. This figure does not
reflect beneficial ownership of Common Stock held in nominee name.
5
<PAGE> 10
RISK FACTORS
Your investment in the Shares will involve certain risks. You should consider
carefully the following discussion of risks and the other information in this
prospectus before you decide whether an investment in the Shares is suitable for
you.
RISKS RELATING TO NTL
ADVERSE CONSEQUENCES OF LEVERAGE
NTL is, and for the foreseeable future will remain, highly leveraged. At June
30, 1998, after giving effect to the offering of the 11 1/2% Notes and the
12 3/8% Notes and the Partners acquisition, the accrued amount of our total
long-term indebtedness (including NTL's 13% Senior Redeemable Exchangeable
Preferred Stock) was approximately $4.4 billion. This debt represents
approximately 88% of our total capitalization.
To finance our acquisition of ComTel, NTL amended an eight-year term loan
facility (the "New Credit Facility") with The Chase Manhattan Bank ("Chase"). A
June 1998 amendment reduced Chase's commitment to the L475 million that we
required for the cash portion of the purchase price for ComTel. Chase has
committed to offer us a L480 million senior secured credit facility after we
repay in full the L475 million ComTel acquisition facility. NTL intends to use
the net proceeds from the offering of the 11 1/2% Notes and the 12 3/8% Notes to
repay all amounts presently outstanding under the New Credit Facility. We expect
to arrange for a reduction in the level of Chase's commitment to make available
such a senior secured credit facility by an amount equal to the balance of the
net proceeds of the offering of the 11 1/2% Notes and the 12 3/8% Notes
remaining after payment in full of all amounts presently outstanding under the
New Credit Facility. The balance of the net proceeds of those offerings
remaining is anticipated to be approximately $57 million.
NTL's ability to make scheduled payments under present and future indebtedness
will depend upon, among other things, our ability to:
- - complete the build-out of the franchises on a timely and cost effective basis,
- - access the earnings of our subsidiaries (which may be subject to significant
contractual and legal limitations),
- - our future operating performance and
- - our ability to refinance our indebtedness when necessary.
Future agreements and debt instruments may:
- - require NTL to maintain certain financial ratios,
- - prohibit the payment of dividends and other distributions to NTL by our
subsidiaries or
- - restrict asset sales and dictate the use of proceeds from the assets.
In complying with these restrictions while servicing our debt, we may limit our
ability to respond to market conditions or meet extraordinary capital needs.
We cannot be certain that any such restrictions will permit us to engage in
business activities, such as acquisitions, which would generate revenue and
facilitate our service and repayment of our debt. Additionally, such
restrictions may affect our ability to finance our future operations or capital
needs.
The amount of indebtedness could have important consequences to stockholders,
including the following:
- - increasing our vulnerability to adverse changes in general economic conditions
or increases in prevailing interest rates,
- - limiting our ability to obtain additional financing for working capital,
capital expenditures, acquisitions and general corporate purposes, including
the build-out of the networks in the franchises and the development and
expansion of our business,
- - requiring a substantial portion of our cash flow and our subsidiaries' cash
flow from
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<PAGE> 11
operations to be dedicated to debt service requirements, which would reduce
funds available for dividends, operations and future business opportunities
and
- - increasing our exposure to interest rate increases with respect to our
borrowings which are tied to variable interest rates.
Additionally, in some circumstances we may be required to offer to repurchase
some of our indebtedness before maturity. We cannot be certain that we will have
the financial resources necessary to repurchase those securities in those
circumstances.
NETWORK CONSTRUCTION COSTS
Following our recent and proposed acquisitions, NTL's capital expenses and cost
of operations for the development, construction and operation of our combined
telecommunications networks will significantly increase. We intend to fund a
portion of these costs with cash, cash equivalents and marketable securities and
funds generated by the operations of our subsidiaries. However, given our most
recent acquisitions, we estimate that significant amounts of additional funding
will be necessary to meet these capital expenditure requirements.
We cannot be certain that:
- - we will be able to obtain additional financing with acceptable terms,
- - actual construction costs will meet our expectations,
- - we will satisfy conditions precedent to advances under future credit
facilities,
- - we will not acquire additional businesses that require additional capital,
- - we will be able to generate sufficient cash from operations to meet capital
requirements, debt service and other obligations when required or
- - our subsidiaries will withstand exposure to exchange and interest rate
fluctuations.
We do not have any firm additional financing plans to address the factors
enumerated above, except in relation to the New Credit Facility.
NEED FOR ADDITIONAL FINANCING
We anticipate that NTL and its subsidiaries will not generate sufficient cash
flow from operations to repay at maturity the entire principal amount of our
outstanding indebtedness. Some of the measures we may take to refinance our debt
include:
- - refinancing all or portions of such indebtedness,
- - seeking modifications to the terms of such indebtedness,
- - seeking additional debt financing (which may require us to obtain the consent
of some of our lenders) and
- - seeking additional equity financing.
We cannot be certain that we will succeed in executing any of these measures.
ACQUISITION RISKS
We will continue to consider strategic acquisitions and combinations that
involve operators or owners of licenses to operate cable, telephone, television
or telecommunications systems or services and related businesses that operate
principally in the UK. If consummated, some of these transactions would
significantly alter our holdings and might require NTL to incur substantial
indebtedness or raise additional equity. We cannot assure you that, with respect
to the recent acquisitions of Comcast and ComTel and the proposed Diamond
acquisition, as well as future acquisitions, that we:
- - will realize any anticipated benefits,
- - will successfully integrate the businesses with NTL's operations, or
- - will manage such integration without adversely affecting NTL.
The indentures governing our existing indebtedness permit NTL to assume
additional debt in order to finance the acquisition of either tangible or
intangible assets, licenses and computer software that are used in connection
with a cable business, as well as certain entities that are directly or
indirectly engaged in a cable business.
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HOLDING COMPANY STRUCTURE; DEPENDENCE UPON CASH FLOW FROM SUBSIDIARIES
NTL is a holding company that conducts its operations through direct and
indirect wholly-owned subsidiaries and affiliated joint ventures. Consequently,
we hold no significant assets other than our investments in and advances to our
subsidiaries and affiliated joint ventures. We depend upon the receipt of
sufficient funds from our subsidiaries and affiliated joint ventures to meet our
obligations. Additionally, our claim to any distribution of assets following
liquidation of a subsidiary or joint venture is subordinate to the prior senior
claims of any other creditors or direct or indirect owners of those subsidiaries
and joint ventures. The obligations of our subsidiaries which are payable to NTL
are also subordinate to the claims of the lenders under the New Credit Facility.
Additionally, the terms of the New Credit Facility (when renegotiated) and the
terms of existing and future indebtedness of our subsidiaries may limit the
payment of dividends, loans and other distributions to NTL. In the absence of a
default, we anticipate that the New Credit Facility, when we renegotiate it,
will generally permit payments to NTL to pay the interest and principal of
existing indebtedness.
Each of our subsidiaries that is a Delaware corporation may pay dividends under
Delaware General Corporation Law only out of its surplus or, in the event that
it has no surplus, out of its net profits for that fiscal year or the
immediately preceding fiscal year in which the subsidiary declares the dividend.
Each of our subsidiaries that is a UK corporation may pay dividends under UK law
only out of distributable profits. Under UK law such distributable profits
consist of accumulated, realized profits less previous distributions and
capitalization as well as realized losses that have not been written off in a
reduction or reorganization of capital. Other statutory and general English law
obligations also affect the ability of our subsidiaries to declare dividends and
the ability of our subsidiaries to make payments to NTL in compliance with inter
company loans. In addition, the UK may impose a withholding tax on payments of
interest and advance corporation tax on distributions (of interest, dividends or
otherwise) by NTL's UK subsidiaries. Each of our subsidiaries that is a Bermuda
corporation may pay dividends subject to the satisfaction of statutory solvency
tests.
The Common Stock and Convertible Preferred Stock will be effectively
subordinated to all existing and future indebtedness and other liabilities and
commitments of NTL's subsidiaries, including borrowings under the New Credit
Facility. As of June 30, 1998, the total liabilities of NTL's subsidiaries were
approximately $863 million (L518 million). In addition, subsidiaries of NTL may
incur additional indebtedness to finance the construction, capital expenditure
and working capital needs of a cable business and the acquisition of cable
assets or the acquisitions of certain entities, directly or indirectly, engaged
in a cable business, if such entities meet certain qualifying criteria. In light
of NTL's strategy of continued growth, in part through acquisitions, NTL and its
subsidiaries may incur substantial indebtedness in the future. Borrowings under
the New Credit Facility are, and a substantial portion of NTL's and its
subsidiaries' future indebtedness is expected to be, secured by liens and other
security interests over the assets of NTL's subsidiaries and NTL's equity
interests in NTL's subsidiaries. In addition, the ability of NTL and, therefore,
the stockholders of NTL, to benefit from distributions of assets of NTL's
subsidiaries may be limited to the extent that the outstanding shares of any of
its subsidiaries and such subsidiary's assets are pledged to secure other debt
of NTL or its subsidiaries.
Any right of NTL to receive assets of any subsidiary upon such subsidiary's
liquidation or reorganization will be structurally subordinated to the claims of
that subsidiary's creditors, except to the extent the NTL is itself recognized
as an unsubordinated creditor of such subsidiary. However, to the extent that
NTL is so recognized, the claims of NTL would still be subject to any security
interests in the assets of such subsidiary and any liabilities of such
subsidiary senior to those held by NTL and may otherwise be challenged by third
parties in a liquidation or reorganization proceeding. In
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addition, the New Credit Facility requires NTL to subordinate its right to
repayment of indebtedness outstanding between it and the borrower under such
agreement or any other subsidiary of NTL to the rights of the lenders under the
agreement. In particular the rights of NTL and other subsidiaries to repayment
of principal and interest lent by them to the borrower or other subsidiaries
under the New Credit Facility have been and will be subordinated to the rights
of the lenders under the New Credit Facility pursuant to subordination
agreements with such lenders.
Our principal fixed assets are cable headends, cable televisions and
telecommunications distribution equipment, telecommunications switches and
customer equipment, transmission towers, masts and antennas and the sites on
which they are located. These assets are highly specialized and, individually,
may have limited marketability. If secured creditors seize the assets that
secure our debt, these creditors would likely seek to sell the business as a
going concern.
LOSSES AND NEGATIVE CASH FLOWS
NTL had net losses for
- - the six months ended June 30, 1998 of $(198.0 million) and
- - the six months ended June 30, 1997 of $(173.4 million)
and for the years ended December 31,
- - 1997: $(333.1 million)
- - 1996: $(254.5 million)
- - 1995: $(90.8 million)
- - 1994: $(29.6 million)
- - 1993: $(11.1 million)
As of June 30, 1998, NTL's accumulated deficit was $915.0 million.
Construction and operating expenditures have resulted in negative cash flow,
which we expect will continue at least until we establish an adequate customer
base. We also expect to incur substantial additional losses. We cannot be
certain that NTL will achieve or sustain profitability in the future. Failure to
achieve profitability could diminish our ability to sustain operations and
obtain additional required funds. In addition, such a failure would adversely
affect our ability to make required payments on our indebtedness and our
Preferred Stock.
REQUIREMENT TO MEET BUILD MILESTONES
The telecommunications licenses for our franchises contain specific construction
milestones that are set by the Office of Telecommunications ("OFTEL") and the
Independent Television Commission ("ITC"). Under the terms of these licenses, by
the end of 2005 we must construct cable television systems that pass an
aggregate of approximately 2,090,000 residential and business premises.
Based on current network construction, we believe that we will be able to
satisfy our milestones in the future, but we cannot be certain that such
milestones will be met.
Failure to meet the construction milestones required by any of our licenses or
to modify those expectations may result in revocation of the relevant licenses.
UNCERTAINTY OF CONSTRUCTION PROGRESS AND COSTS
At December 31, 1997, construction of NTL's network had passed in excess of 48%
of our final milestone requirements for all our franchises. Successful
construction and development of the combined network will depend on, among other
things, our ability to:
- - continue to design network routes,
- - install facilities,
- - obtain and maintain any required government licenses or approvals and
- - finance construction and development,
all in a timely manner, at reasonable costs and on satisfactory terms and
conditions. We cannot be certain that the actual costs of network construction
will remain as budgeted.
Our licenses generally require underground construction of our network through a
procedure
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that is significantly more expensive and time consuming than the aerial
alternative. Underground construction is more expensive because mechanized
installment methods conflict with underground utility infrastructure.
Additionally, we must incur the cost of restoring the surface area subsequent to
construction. Thus far we have succeeded in negotiating favorable construction
contracts, but construction costs could increase significantly over the next few
years as existing contracts expire and as demand for cable construction services
grow. We cannot be certain that we will be able to construct our network in a
timely manner or at a reasonable cost.
SIGNIFICANT COMPETITION
We face significant competition from established and new competitors in the
areas of residential telephony, business telecoms services and cable television.
We believe that competition will intensify in each of these business areas,
particularly business telecommunications.
RESIDENTIAL TELEPHONY. We compete primarily with British Telecommunications plc
("BT") in providing telephone services to residential customers. BT, formerly
the only major national public telephone operator ("PTC") in the UK, occupies an
established market position and manages fully built networks with resources that
are substantially greater than those of NTL. According to OFTEL, at March 31,
1997, BT serviced nearly 90% of UK residential telephone exchange line
customers. Our growth in telecommunications services depends upon our ability to
appropriate BT's customers.
In our view, value-for-money is currently one of the more important influences
on UK customers. Our goal is to remain competitive with BT's residential
telephony service rates may cause a decline in our average per-line residential
telecommunications revenues, and we may not achieve desired penetration rates.
Consequently, we may experience a decline in total revenues.
On February 8, 1996, the DTI awarded BT and RadioTEL Systems licences that
authorize those companies to operate radio fixed access services in the 2 GHz
band in Scotland, Wales and Northern Ireland. These licensees create additional
competition for the our residential telephony services in certain remote rural
areas of our franchise in Northern Ireland. We also compete with mobile
networks, which is a technology that may grow to be competitive with NTL's other
networks, particularly if call charges are reduced further on the mobile
networks. Our Radio Communications group may enable us to benefit from growth in
the mobile networks technology. We cannot assure you that we will be able to
compete successfully with BT or any other telecommunication operations.
We believe that we have a competitive advantage in the residential market
because we offer integrated telephone, CATV, telecommunication services
(including interactive and on-line services) and dual product packages that are
designed to encourage customers to subscribe to multiple services. We cannot be
certain that this perceived competitive advantage will continue. Indeed, the UK
recently announced that BT and all other operators would be permitted to provide
and convey CATV services throughout the UK starting January 1, 2001. In
addition, all areas currently without franchises will open to general
competition in the future, and exclusive franchises will no longer be awarded.
British Sky Broadcasting ("BSkyB") currently markets telecommunications services
on an indirect access basis (which requires the customer to dial additional
digits before entering the primary telephone number, thus diverting calls onto
another operator's network). In addition, BSkyB has proposed a joint venture
with BT, Midland Bank and Matsushita that is known as British Interactive
Broadcasting. If this joint venture's bid to enter the interactive digital
services market passes review by the competition directorate of the European
Commission, we believe that the resulting combination would provide significant
competition.
BUSINESS TELECOMMUNICATIONS. BT is also NTL's principal competitor in providing
business telecommunications services. Additionally,
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NTL competes with C&WC, Energis Communications Limited, a subsidiary of the
National Grid Company plc, Scottish Telecom in Scotland and with other companies
that have been granted telecommunications licenses such as WorldCom and Colt,
and the new non-network based resellers, such as Citibell. In the future, we may
compete with additional entrants to the business telecommunications market, such
as AT&T U.K. Competition is based on price range and quality of services, and
the Company expects price competition to intensify if existing and new market
entrants compete aggressively.
CATV. Our CATV systems compete with direct reception over-the-air broadcast
television, direct-to-home satellite services and satellite master antenna
systems. Additionally, pay television and pay-per-view services offered by NTL
compete with other communications and entertainment media, including home video,
cinema exhibition of feature films, live theater and newly emerging multimedia
services.
On September 29, 1993, the ITC issued a statement encouraging BT and the other
national public telephone operators to provide "video-on-demand" services under
their existing licenses. We expect to face competition from programming provided
by video-on-demand services, including those provided by PTOs with national
licenses, as well as (after 2001) from companies which seek to provide CATV
services in our franchises under the recently announced change of government
policy.
The Broadcasting Act of 1996 provides for the regulation of digital terrestrial
television that will initially provide an additional 18 or more new terrestrial
channels serving between 60% and 90% of the UK's population. Some of the
channels are reserved for digital simultaneous broadcasting by the existing
terrestrial broadcasters. The introduction of digital terrestrial television, as
well as digital satellite television, will provide both additional programming
sources as well as increased competition.
We do not now how developing media may impact the market for cable television
systems. As-of-yet undeveloped technologies may become dominant in the future
and render cable television systems less profitable or even obsolete.
BROADCAST SERVICES. In February 1997, the UK Government sold the Home Service
and World Service transmission businesses of the British Broadcasting
Corporation to a consortium led by Castle Tower Corporation. We may encounter
significant competition from this consortium following the expiration of our
current contracts with the Independent Television contractors and Channel 4 and
the Welsh Fourth Channel ("SC4") for the provision of transmission services.
LIMITED ACCESS TO PROGRAMMING
The competitiveness of our cable television services depends on our access to
programming at a reasonable cost. While various sources of programming are
available to cable system operators in the UK, BSkyB is currently the most
important supplier of cable programming and the exclusive supplier of certain
programming. BSkyB provides the industry with a range of programming, including
the most popular mainstream premium movie channels available in the UK and,
currently, exclusive English premier league soccer games. BSkyB also competes
with NTL by operating a DTH satellite service that provides programming,
including programming that is also offered by NTL, to approximately 4 million
subscribers in the UK. BSkyB's programming is crucial in attracting and
retaining cable television subscribers and, in the absence of more alternative
programming sources, BSkyB may raise prices for its programming without
significant competitive pricing pressure.
Like many other cable operators, we obtain most of our programming through
unofficial arrangements with BSkyB and other programming suppliers. To date, NTL
has not had a formal contract with BSkyB, although we have discussed entering
such an agreement for some time. We cannot be certain that we will reach a
definitive agreement with BSkyB, that the terms of such agreement will improve
our current arrangement, or that BSkyB will continue to supply programming to us
on reasonable commercial terms. Moreover, we have not, to
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date, entered into written contracts with many of our other program suppliers.
The loss of BSkyB or other programming, a deterioration in the perceived quality
of BSkyB or other programming, or a material increase in the price that we must
pay for BSkyB or other programming could have a material adverse effect on NTL.
POSSIBLE CHANGES IN GOVERNMENT REGULATION
Our principal business activities in the UK are regulated and supervised by
various governmental bodies that include the ITC, the Department of Culture,
Media and Sport, the Radio Communications Agency, the Radio Authority and OFTEL
under the directions of the Director General and the DTI on behalf of The
Secretary of State for Trade and Industry. Changes in laws, regulations or
governmental policy or the interpretations of such laws or regulations affecting
the activities of NTL and those of its competitors, such as licensing
requirements, changes in price regulation and deregulation of interconnection
arrangements, could have a material adverse effect on us.
Specifically, the prices that we may charge the ITV companies, Channel 4 and
S4C, for television transmission services are subject to price controls imposed
by the OFTEL. On December 24, 1996, the Director General of OFTEL issued a
formal modification to NTL's Telecommunications Act License to address the new
price control for the television transmission services that we provide to the
ITV companies, Channel 4 and S4C. Under the new arrangements, our total revenues
receivable for such services (excluding certain insignificant items) can not
exceed L53.15 million in 1997 and, thereafter through 2002, they will be
adjusted annually by the Retail Prices Index minus 4%. These price controls may
be reviewed again prior to 2002 and price controls for the year following
December 31, 2002 may have a material adverse effect on the revenues receivable
from the ITV companies, Channel 4 and S4C.
As a UK company we are subject to regulatory initiatives of the European
Commission. Changes promulgated in EU Directives, particularly television
"production" and "programming" quotas, may reduce the range of programing and
increase the costs of purchasing television programming. In addition, EU
Directives may introduce provisions that require us to provide access to our
cable network infrastructure to other service providers.
MANAGEMENT OF GROWTH AND EXPANSION
We have experienced rapid growth and development in a relatively short period,
and we plan to meet our strategic objectives and regulatory milestones.
Management of such growth will require, among other things, stringent control of
construction and other costs, continued development of our financial and
management controls, increased marketing activities and the training of new
personnel. Failure to manage our rapid growth and development successfully could
have a material adverse effect on NTL.
DEPENDENCE UPON KEY PERSONNEL
A small number of key executive officers manage our businesses, and the loss of
one or more of them could have a material adverse effect on NTL. We believe that
our future success will depend in large part on our continued ability to attract
and retain highly skilled and qualified personnel. We have not entered into
written employment contracts or non-compete agreements with, nor have we
obtained life insurance policies covering, such key executive officers. Certain
senior managers of NTL also serve as members of senior management of other
companies in the telecommunications business.
RISKS OF RAPID TECHNOLOGICAL CHANGES
The telecommunications industry is subject to rapid and significant changes in
technology and the effect of technological changes on the businesses of NTL
cannot be predicted. However, the cost of implementation for emerging and future
technologies could be significant, and our ability to fund such implementation
will depend on our ability to obtain additional financing.
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CURRENCY RISK
To the extent that we obtain financing in United States dollars and incur
construction and operating expenses in British pounds sterling, we will
encounter currency exchange rate risks. In addition, we generate revenues
primarily in British pounds sterling while we pay interest and principal
obligations with respect to most of our existing indebtedness in United States
dollars. We have entered into an option agreement to hedge some of the risk of
exchange rate fluctuations related to debt service and corporate expenses. While
NTL may consider entering into additional transactions to hedge the risk of
exchange rate fluctuations, we cannot be certain that we will engage in such
transactions; or, if we do, that those transactions will be successful and that
shifts in the currency exchange rates will not have a material adverse effect on
us.
RISKS OF LIMITED INSURANCE COVERAGE
We obtain insurance of the type and in the amounts that we believe are customary
in the UK for similar companies. Consistent with this practice, we do not insure
the underground portion of our cable network. Any catastrophe that affects a
significant portion of a system's underground cable network could result in
substantial uninsured losses.
RISKS RELATING TO THE SHARES
LACK OF PUBLIC MARKET FOR THE CONVERTIBLE PREFERRED STOCK
The Convertible Preferred Stock is a new security for which there currently is
no market. We do not intend to apply for listing of the Convertible Preferred
Stock on any securities exchange or to seek approval for quotation through any
automated quotation system. Accordingly, we cannot assure the development or
liquidity of any market for the Convertible Preferred Stock.
RESTRICTIONS ON CASH DIVIDENDS
We expect that future credit agreements as well as the indentures that govern
our existing indebtedness will restrict our ability to pay cash dividends on the
Shares. Specifically, the New Credit Facility and the various indentures
governing our outstanding debt limit our ability to pay cash dividends on the
Shares.
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USE OF PROCEEDS
The Selling Stockholders will receive all of the net proceeds from the sale of
the Shares pursuant to this prospectus. NTL will not receive any of the proceeds
from the sale of such Shares by the Selling Stockholders.
DIVIDEND POLICY
We have never paid cash dividends on our Common Stock. Pursuant to the
indentures governing our senior indebtedness, limitations apply to the New
Credit Facility and future agreements and may restrict the future payment of
dividends on our capital stock. In addition, we do not currently intend to pay
cash dividends in the foreseeable future on shares of our capital stock as we
intend to retain earnings to fund construction of our network and the growth of
our business.
Convertible Preferred Stock holders are entitled to receive cumulative dividends
according to the following terms:
- dividends will be declared by the Board of Directors of NTL out of
legally available funds in preference to dividends on any Junior Stock
(as defined in the "Description of Convertible Preferred Stock" section
in this prospectus),
- dividends will be paid at a rate determined at the time of their issuance
such that an independent investment banker will certify that the dividend
payments are not less than an amount equal to $1,000 together with the
value of dividends accrued but paid up to the date of the Convertible
Preferred Stock redemption and
- dividends may be paid in the form of Common Stock or additional
Convertible Preferred Stock.
Additionally, Convertible Preferred Stock holders have the option to convert
their shares into Common Stock.
DETERMINATION OF OFFERING PRICE
The offering price for the Convertible Preferred Stock is not set but will be
determined according to negotiation between a Selling Stockholder and the
prospective purchaser. The offering price for the Common Stock is negotiated or,
if sold on the Nasdaq, at the prevailing market price.
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DESCRIPTION OF CONVERTIBLE PREFERRED STOCK
The following summary of the Convertible Preferred Stock and the
Certificate of Designations relating to the Convertible Preferred Stock is not
intended to be complete. It is subject to, and qualified in its entirety by
reference to, the Company's Restated Certificate of Incorporation, as amended
(the "Charter"), and the Certificate of Designations, including the definitions
therein of certain terms used below. Copies of the Certificate of Designations
are available from the Company, upon request, and they are also included as
exhibits to the Registration Statement of which this prospectus forms a part.
See "Where you can find more information."
GENERAL
The Company is authorized to issue 10,000,000 shares of Preferred Stock, par
value $0.01 per share. As of the date of this Prospectus no shares of the
Convertible Preferred Stock are outstanding. The Charter authorizes the
Company's Board of Directors (the "Board"), without stockholder approval, to
issue classes of Preferred Stock from time to time in one or more series, with
such designations, preferences and relative, participating, optional or other
special rights, qualifications, limitations or restrictions as the Board may
determine. See "Description of Capital Stock -- Preferred Stock."
Pursuant to the Certificate of Designations, we have authorized the issuance of
an amount of shares (to be determined at the time of issuance) of Convertible
Preferred Stock with a stated value per share (the "Stated Value" and, together
with all accrued and unpaid dividends, the "Liquidation Preference") to be
determined by negotiation between a selling stockholder and a prospective
purchaser. The Convertible Preferred Stock will, when issued and paid for in
accordance with the 9.9% Certificate of Designations, be fully paid and
nonassessable, and holders of the Convertible Preferred Stock will have no
preemptive rights related to the Convertible Preferred Stock.
The transfer agent (the "Transfer Agent") for the Convertible Preferred Stock
will be determined by NTL prior to the issuance of the Convertible Preferred
Stock .
RANKING
The Convertible Preferred Stock will, with respect to dividend distributions and
distributions upon the liquidation, winding-up and dissolution of the Company,
rank
- - senior to all classes of Common Stock, other classes of capital stock or any
series of Preferred Stock we establish after the date of the Certificate of
Designations. The terms of these securities expressly provide that they rank
senior to or equal to the Convertible Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and
dissolution of the Company. These securities are collectively referred to with
our Common Stock as "Junior Stock";
- - equal to any additional shares of Convertible Preferred Stock we issue in the
future and any other class of capital stock or series of Preferred Stock we
issue after the date of the Certificate of Designations. These securities
expressly provide that they rank equal to the Convertible Preferred Stock as
to dividend distributions and distributions upon the liquidation, winding-up
and dissolution of the Company. These securities are collectively referred to
as "Parity Stock"; and
- - junior to each class of capital stock or series of Preferred Stock we issue
after the date of the Certificate of Designations (subject to certain
conditions). These securities expressly provide that they will rank senior to
the Convertible Preferred Stock as to dividend distributions and distributions
upon liquidation, winding-up and dissolution of the Company. These securities
are collectively referred to as "Senior Stock."
DIVIDENDS
The holders of the Convertible Preferred Stock will be entitled to receive,
when, as and if dividends are declared by the Board out of
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legally available funds, cumulative dividends from the date that the Convertible
Preferred Stock is issued (the "Issue Date") according to the following terms:
- - dividends will be declared in preference to dividends on any Junior Stock
- - dividends will be paid at a rate determined at the time of their issuance such
that an independent investment banker will certify that the dividend payments
are not less than an amount equal to $1,000 together with the value of
dividends accrued but paid up to the date of the Convertible Preferred Stock
redemption
- - dividends may be paid in the form of Common Stock or additional Convertible
Preferred Stock.
These dividends will accrue semi-annually on the second anniversary of the Issue
Date (each day constituting a "Dividend Payment Date"). If any such date is not
a Business Day or occurs during a redemption or conversion, such payment will be
made on the next succeeding Business Day or on a special record date during the
45 days prior to the redemption or conversion. Holders of record as of the
Dividend Payment date or a special record date (each, a "Record Date") will
receive a dividend payment. Dividends will be payable in the sole discretion of
the Board
- - in cash (to the extent permitted by our various indentures, credit or other
agreements),
- - by delivery of shares of Common Stock to holders (based upon a percentage of
the Average Market Price (as defined below)),
- - by delivery of additional shares of Convertible Preferred Stock or
- - through any combination of the foregoing.
We intend to pay dividends in shares of Common Stock on each Dividend Payment
Date to the extent that we are unable to pay dividends in cash.
If the dividends are paid in shares of Common Stock, the number of shares of
Common Stock to be issued on each Dividend Payment Date will be determined by
dividing the total dividend to be paid by the Average Market Price. The "Average
Market Price" is the average of the high and low sales prices of the Common
Stock as reported by the Nasdaq or any national securities exchange upon which
the Common Stock is then listed, for each of the ten consecutive trading days
immediately preceding the fifth business day preceding the Record Date.
If the dividends are paid in shares of Convertible Preferred Stock, the number
of shares of Convertible Preferred Stock to be paid will be determined according
to two different sets of circumstances:
- - if on the Record Date the Common Stock is trading at a price in excess of 25%
above the Average Market Price at the Issue Date (the "Fixed Price") then, by
dividing
(A) the product of multiplying the Fixed Price and the dividend payment
amount per share by
(B) the product of multiplying the Average Market Price by the Stated Value
of the Convertible Preferred Stock
or
- - if, on the Record Date, the Fixed Price is lower than the Average Market
Price, then by dividing the Convertible Preferred Stock Dividend by the Stated
Value of the Convertible Preferred Stock.
The Transfer Agent will be authorized and directed in the Certificate of
Designations to aggregate any fractional shares of Common Stock that are issued
as dividends, sell them at the best available price and distribute the proceeds
to the holders in proportion to their respective interests therein.
Dividends on the Convertible Preferred Stock will accrue on a daily basis
(without interest or compounding) whether or not the Company has earnings or
profits, whether or not there are funds legally available for the payment and
whether or not dividends are declared. Dividends will accumulate to the extent
they are
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not paid on the Dividend Payment Date for the period to which they relate.
Dividends will cease to accrue on the date that the Convertible Preferred Stock
is either redeemed or converted. All dividends will be paid pro rata to the
Convertible Preferred Stock holders.
While shares of the Convertible Preferred Stock remain outstanding, we will not
pay or declare any dividends, cash or any other distribution on Junior Stock or
Parity Stock nor purchase or redeem any Junior Stock or Parity Stock unless:
- - we have satisfied the dividend requirements for all previously accrued Parity
Stock dividends
- - we have satisfied the requirements for purchase, retirement, and sinking funds
of all Parity Stock and
- - we are not in default on any of its obligations to redeem any Parity Stock.
The restrictions governing our purchase or redemption of our Junior Stock and
Parity Stock do not include the following transactions:
- - a reclassification of the Junior Stock or Parity Stock through the issuance of
other Junior Stock or Parity Stock and/or convertible securities
- - the issuance of cash in lieu of fractional shares or
- - the purchase, redemption or other acquisition of Junior Stock or Parity Stock
from any wholly-owned subsidiary.
Excluding the restrictions explicitly detailed above and the requirements of
applicable law, we may, from time to time, pay dividends to or purchase and
redeem our Junior Stock and Parity Stock.
We expect future credit agreements and the indentures that govern our existing
indebtedness will restrict our ability to pay dividends on the Convertible
Preferred Stock. Specifically, our New Credit Facility and the various
indentures governing our outstanding debt limit our ability to pay cash
dividends on Convertible Preferred Stock.
OPTIONAL REDEMPTION
We may redeem the Convertible Preferred Stock for $1,000 in cash per share
(which, together with the amount of all dividends accrued but unpaid constitutes
the "Redemption Price"). At our option, we may choose to redeem the Convertible
Preferred Stock for shares of Common Stock after the third anniversary of the
Issue Date until the Redemption Date.
No optional redemption may be authorized or made unless, prior to giving the
applicable redemption notice, all accumulated and unpaid dividends for periods
ended prior to the date of such redemption notice shall have been paid. In the
event of partial redemptions of Convertible Preferred Stock, the shares to be
redeemed will be determined pro rata or by lot, as determined by the Company,
provided that the Company may redeem all shares held by holders of fewer than 10
shares of Convertible Preferred Stock (or by holders that would hold fewer than
10 shares of Convertible Preferred Stock following such redemption) prior to its
redemption of other shares of Convertible Preferred Stock.
MANDATORY REDEMPTION
We must redeem the Convertible Preferred Stock out of funds legally available on
the tenth anniversary of the Issue Date at $1,000 cash per share (which,
together with the amount of all accrued but unpaid dividends constitutes the
"Mandatory Redemption Price") or for shares of Common Stock.
REDEMPTION BY DELIVERY OF COMMON STOCK
If we redeem the Convertible Preferred Stock in whole or in part through the
exchange of Common Stock, Convertible Preferred Stock holders will receive a
number of shares of Common Stock that is equal to the Redemption Price or
Mandatory Redemption price divided by the Average Market Price. No fractional
shares of Common Stock will be delivered, but we will pay a cash adjustment as
described in the Certificate of Designations.
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PROCEDURE FOR REDEMPTION
On and after a redemption date, unless we default in the payment of the
applicable redemption price, dividends will cease to accrue on shares of
Convertible Preferred Stock called for redemption and all rights of holders of
such shares will terminate except for the right to receive the redemption price,
without interest; provided, however, that if a notice of redemption has been
given and at least $250 million in cash or an amount of Common Stock equal to
the full Redemption Price or Mandatory Redemption Price has been segregated in
trust for the benefit of the Convertible Preferred Stock holders, the holders of
the shares to be redeemed will cease to be NTL stockholders and will be entitled
to receive only the Redemption Price or Mandatory Redemption Price for their
shares on the redemption date. We will provide a written notice of redemption by
first class mail to each holder of record of shares of Convertible Preferred
Stock not fewer than 30 days nor more than 60 days prior to the date fixed for
such redemption.
CONVERSION RIGHTS
Convertible Preferred Stock holders have the option to convert their shares at
any time after the Issue Date into an amount of our Common Stock equal to the
Stated Value of the shares divided by the Fixed Price. A holder's right to
convert shares of Convertible Preferred Stock called for redemption will
terminate at the close of business on the business day preceding the redemption
date and will be lost if not exercised prior to that time, unless we default in
making the payment due upon redemption.
The initial conversion price is $1000 per share. The conversion price will be
subject to adjustments in the Fixed Price as the result of certain events,
including:
- - the payment of dividends (and other distributions) in Common Stock on any
class of capital stock of the Company other than the payment of dividends in
Common Stock on the Convertible Preferred Stock or any other regularly
scheduled dividend on any other Preferred Stock which does not trigger any
anti-dilution provisions in any other security;
- - the issuance to all holders of Common Stock of rights, warrants or options
entitling them to subscribe for or purchase Common Stock at less than the
current market price (as calculated pursuant to the Certificate of
Designations);
- - subdivisions, combinations and reclassifications of Common Stock;
- - distributions to all holders of our Common Stock or evidences of indebtedness,
shares of any class of capital stock, cash or other assets (including
securities, but excluding those dividends, rights, warrants, options and
distributions referred to above and dividends and distributions paid in cash
out of the retained earnings of the Company. If the sum of all such cash
dividends and distributions made and the amount of cash and the fair market
value of other consideration paid in respect of any repurchases of Common
Stock by the Company or any of its subsidiaries, in each case within the
preceding 12 months in respect of which no adjustment has been made, exceeds
10% of the product of the then current market price of the Common Stock times
the aggregate number of shares of Common Stock outstanding on the record date
for such dividend or distribution) no adjustment will be made.
In the case of certain consolidations or mergers to which we are a party or the
transfer of substantially all of our assets, each share of Convertible Preferred
Stock then outstanding would become convertible only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger or
transfer by a holder of the number of shares of Common Stock into which such
share of Convertible Preferred Stock might have been converted immediately prior
to the such consolidation, merger or transfer (assuming such holder of Common
Stock failed to exercise any rights of election and received per share the kind
and amount receivable per share by a plurality of non-electing shares).
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If we enter any Reorganization (as defined below), the Convertible Preferred
Stock holders will have the option to convert their shares (or the Convertible
Preferred Stock holders of NTL's successor by merger or consolidation as
described in the Certificate of Designations) into Reorganization Units (as
defined below). The number of Reorganization Units issued upon conversion will
be determined by dividing the Stated Value of the Convertible Preferred Stock by
the higher of
- - the Fixed Price on the date that the Convertible Preferred Stock is converted
or
- - the applicable price of the Reorganization Unit on the date that the Preferred
Stock is converted.
"Reorganization" means any of the following events:
- - any consolidation or merger of NTL with another entity, unless NTL is the
surviving corporation and the common stock remains unchanged
- - sale or transfer of substantially all NTL assets to another entity
- - any reorganization or reclassification of the Common Stock or other NTL equity
securities
- - any statutory exchange of capital stock with another entity
"Reorganization Unit" means the kind or amount of securities, cash or other
property that Convertible Preferred Stock holders may receive in substitution of
or in exchange for a share of Common Stock upon consummation of a
Reorganization.
No fractional shares of Common Stock will be issued upon conversion. Instead, we
will pay a cash adjustment based upon the closing price of the Common Stock on
the business day prior to the conversion date.
The holder of record of a share of Convertible Preferred Stock at the close of
business on a record date with respect to the payment of dividends on the
Convertible Preferred Stock will be entitled to receive such dividends with
respect to such share of Convertible Preferred Stock on the corresponding
Dividend Payment Date, notwithstanding the conversion of such share after such
Record Date and prior to such Dividend Payment Date. A share of Convertible
Preferred Stock surrendered for conversion during the period from the close of
business on any Record Date for the payment of dividends to the opening of
business of the corresponding Dividend Payment Date must be accompanied by a
payment in cash in an amount equal to the dividend payable on such Dividend
Payment Date, unless such share of Convertible Preferred Stock has been called
for redemption on a redemption date occurring during the period from the close
of business on any Record Date for the payment of dividends to the close of
business on the business day immediately following the corresponding Dividend
Payment Date. The dividend payment with respect to a share of Convertible
Preferred Stock called for redemption on a date during the period from the close
of business on any Record Date for the payment of dividends to the close of
business on the business day immediately following the corresponding Dividend
Payment Date will be payable on such Dividend Payment Date to the record holder
of such share on such Record Date, notwithstanding the conversion of such share
after such Record Date and prior to such Dividend Payment Date. No payment or
adjustment will be made upon conversion of shares of Convertible Preferred Stock
for accumulated and unpaid dividends or for dividends with respect to the Common
Stock issued upon such conversion.
VOTING RIGHTS
Holders of record of shares of the Convertible Preferred Stock will have no
voting rights, except as required by law and as provided in the Charter. The
Certificate of Designations provides that, pursuant to Section 228 of the
Delaware General Corporation Law, Convertible Preferred Stock holders may elect
two new Board members if the accumulation of accrued and unpaid dividends on the
outstanding Convertible Preferred Stock constitutes an amount equal to three
semi-
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annual dividends. Voting rights arising as a result of the Convertible Preferred
Stock holders' election will continue until such time as all dividends in
arrears on the Convertible Preferred Stock are paid in full and, at which time
the term of office of any such members of the Board of Directors so elected will
terminate and such directors will be deemed to have resigned.
LIQUIDATION RIGHTS
If there is any liquidation, dissolution, or winding up of the Company, whether
voluntary or involuntary, then the holders of shares of Convertible Preferred
Stock then outstanding, after payment, or provision for payment of our debts and
other liabilities and the payment or provision for payment of any distribution
on any shares of Senior Stock, and before any distribution to the holders of
Junior Stock, shall be entitled to be paid out of our assets available for
distribution to our stockholders an amount per share of Convertible Preferred
Stock in cash equal to the Liquidation Preference. If our assets available for
distribution to the holders of Convertible Preferred Stock upon any dissolution,
liquidation or winding up of the Company shall be insufficient to pay in full
the Liquidation Preference payable to the holders of outstanding shares of
Convertible Preferred Stock and the liquidation preference payable to all other
shares of Parity Stock (as set forth in the instrument or instruments creating
such Parity Stock), then the holders of shares of Convertible Preferred Stock
and of all other shares of Parity Stock shall share ratably in such distribution
of assets in proportion to the amount which would be payable on such
distribution if the amounts to which the holders of outstanding shares of
Convertible Preferred Stock and the holders of outstanding shares of such other
Parity Stock were paid in full.
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DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
Our authorized capital stock consists of 400,000,000 shares of Common Stock, and
10,000,000 shares of Preferred Stock. At the close of business on October 31,
1998:
- - approximately 50,064,000 shares of Common Stock were issued and outstanding;
- - no shares of Common Stock were held by the Company in its treasury;
- - approximately 121,000,000 shares of the Company's 13% Preferred were issued
and outstanding;
- - 1,000,000 shares of Series A Junior Participating Preferred Stock (the "Rights
Preferred Stock") were reserved for issuance pursuant to the Rights Agreement,
dated as of October 13, 1993 (the "Rights Agreement"), between the Company and
Continental Stock Transfer & Trust Company, as Rights Agent;
- - approximately 7,261,000 shares of Common Stock were reserved for issuance
pursuant to the conversion of the 7% Convertible Subordinated Notes Due 2008;
- - approximately 927,000 shares of Common Stock were reserved for issuance upon
the exercise of certain warrants; and
- - approximately 15,912,000 shares of Common Stock were reserved for issuance
pursuant to various Company employee and director stock options
- - approximately 2,821,000 shares of 9.9% Non-voting Mandatorily Redeemable
Preferred Stock were issued and outstanding.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share they hold of
record and may participate in all matters that are submitted to a vote of the
stockholders. They do not have cumulative voting rights in the election of
directors. Holders of Common Stock are entitled to receive ratably any dividends
that our Board of Directors may legally declare. In the event of a liquidation,
dissolution or winding of the Company, holders of Common Stock would be entitled
to share ratably in all our assets available for distribution after liabilities
are paid and the liquidation preference of any outstanding Preferred Stock is
satisfied. Holders of Common Stock have no preemptive rights and have no rights
to convert their Common Stock into any other securities, and they have no
redemption rights. All of the outstanding shares of Common Stock are fully paid
and nonassessable.
PREFERRED STOCK
Our Board has the authority to issue preferred stock in one or more series with
any designation, title, voting powers and any other preferences, and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions. Our Board may assign rights to the Preferred Stock without any
further vote or action by NTL stockholders.
13% PREFERRED. The 13% Preferred ranks prior to the Common Stock and Rights
Preferred Stock with respect to dividend rights and rights on liquidation,
winding up and dissolution. Each share of 13% Preferred has a liquidation
preference of $1,000. Holders of shares of 13% Preferred are entitled to receive
quarterly dividends per share at a rate of 13% per annum ($130 per share).
Dividends accruing on or prior to February 15, 2004 may, at our option, be paid
in cash, by issuing additional shares of 13% Preferred having an aggregate
liquidation preference equal to the amount of such dividends, or in any
combination of the foregoing. Dividends accruing after February 15, 2004 must be
paid in cash. We may redeem any or all of the 13% Preferred on or after February
15, 2002 at declining redemption prices as set forth in the certificate of
designation with respect to the 13% Preferred, plus accrued and unpaid dividends
to the date of redemption. We must redeem all outstanding shares of 13%
Preferred on February 15, 2009 at a price equal to 100% of the liquidation
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preference thereof, plus accrued and unpaid dividends to the date of redemption.
Holders of 13% Preferred have no general voting rights, except as otherwise
required under Delaware law and except in certain circumstances as set forth in
the certificate of designation with respect to the 13% Preferred including
- - amending certain rights of the holders of the 13% Preferred Stock and
- - the issuance of any class of equity securities that ranks on a parity with or
senior to the 13% Preferred, other than additional shares of the 13% Preferred
issued in lieu of cash dividends or parity securities issued to finance the
redemption by us of the 13% Preferred.
Holders of a majority of the outstanding shares of 13% Preferred, voting as a
class, will be entitled to elect two directors to our Board of Directors if
- - dividends are in arrears for six quarterly periods (whether or not
consecutive) or
- - we fail to make a mandatory redemption or an offer to purchase all of the
outstanding shares of 13% Preferred Stock following a change of control or
- - we fail to pay pursuant to such redemption of offer.
In the event of a change of control, we will, subject to certain conditions,
offer to purchase all outstanding shares of 13% Preferred Stock at a purchase
price equal to 101% of the liquidation preference, plus accrued and unpaid
dividends to the date of repurchase. Additionally, we will have the option to
redeem all of the outstanding shares of 13% Preferred Stock at a redemption
price equal to 100% of the liquidation preference thereof plus the applicable
premium and accrued and unpaid dividends to the date of repurchase.
On any scheduled dividend payment date, we may, at our option, exchange all, but
not less than all, of the shares of 13% Preferred then outstanding into the
Company's 13% Series B Subordinated Exchange Debentures Due 2009.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock in Continental Stock
Transfer & Trust Company.
CERTAIN SPECIAL CHARTER PROVISIONS
Our Charter as currently in effect contains the provisions described below. Such
charter provisions may have the effect of hindering a hostile takeover or change
of the composition of NTL's incumbent board of directors and its officers. These
charter provisions may also adversely impact stockholders who desire to
participate in a tender offer, and they may deprive stockholders of possible
opportunities to sell their shares at temporarily higher prices.
CLASSIFIED BOARD AND FILLING OF VACANCIES ON THE BOARD OF DIRECTORS. Directors
shall be divided into three classes, each of which shall serve a staggered
three-year term. Vacancies on the Board of Directors that may occur between
annual meetings may be filled by the Board of Directors. In addition, any
director elected to fill a vacancy on the Board will serve for the balance of
the term of the replaced director.
REMOVAL OF DIRECTORS. Directors can be removed only by the stockholders for
cause and then only by the affirmative vote of the holders of not less that
two-thirds of the combined voting power of the Company.
VOTING REQUIREMENT FOR CERTAIN BUSINESS COMBINATIONS. In addition to any
affirmative vote required by law, the affirmative vote of holders of two-thirds
of NTL voting power shall be necessary to approve any "Business Combination" (as
hereinafter defined) proposed by an "Interested Stockholder" (as hereinafter
defined). The additional voting requirements will not apply, however, if the
Business Combination was approved by not less than a majority of the Continuing
Directors or if a series of conditions are satisfied that require, in summary,
the following:
- - The consideration to be paid to our stockholders in the Business Combination
must be
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at least equal to the higher of (x) the highest per-share price paid by the
Interested Stockholder in acquiring any shares of Common Stock during the two
years prior to the announcement date of the Business Combination or in the
transaction in which it became an Interested Stockholder (the "Determination
Date"), whichever is higher or (y) the fair market value per share of Common
Stock on the announcement date or Determination Date, whichever is higher, in
either case appropriately adjusted for any stock dividend, stock split,
combination of shares or similar event (non-cash consideration is treated
similarly).
- - Certain "procedural" requirements must be satisfied, including the Consent
Solicitation of proxies pursuant to the rules of the Commission and no
decrease in regular dividends (if any) can be made after the Interested
Stockholder became an Interested Stockholder (except as approved by a majority
of the Continuing Directors).
An "Interested Stockholder" is defined as anyone who is the beneficial owner of
more than 15% of the voting power of the voting stock, other than the Company
and any employee stock plans sponsored by the Company, and includes any person
who is an assignee of or has succeeded to any shares of voting stock in a
transaction not involving a public offering that were at any time within the
two-year period beneficially owned by an Interested Stockholder. The term
"beneficial owner" includes persons directly and indirectly owning or having the
right to acquire or vote the stock. Interested Stockholders participate fully in
all stockholder voting.
A "Business Combination" includes the following transactions:
- - merger or consolidation of the Company or any subsidiary with an Interested
Stockholder or with any other corporation or entity which is, or after such
merger or consolidation would be, an affiliate of an Interested Stockholder;
- - the sale or other disposition by us, or a subsidiary of assets having a fair
market value of $5,000,000 or more if an Interested Stockholder (or an
affiliate thereof) is a party to the transaction;
- - the adoption of any plan or proposal for the liquidation or dissolution of the
Company proposed by or on behalf of an Interested Stockholder (or an affiliate
thereof); or
- - any reclassification of securities, recapitalization, merger with a
subsidiary, or other transaction which has the effect, directly or indirectly,
of increasing the proportionate share of any class of the outstanding stock
(or securities convertible into stock) of the Company or a subsidiary owned by
an Interested Stockholder (or an affiliate thereof).
Determinations of the fair market value of non-cash consideration are made by a
majority of the Continuing Directors.
The term "Continuing Directors" means any member of our Board of Directors,
while such person is a member of the Company's Board of Directors who is not an
Affiliate or Associate or representative of the Interested Stockholder and was a
member of the Company's Board of Directors prior to the time that the Interested
Stockholder became an Interested Stockholder, and any successor of a Continuing
Director while such successor is a member of our Board of Directors who is not
an Affiliate of Associate or representative of the interested Stockholder and is
recommended or elected to succeed the Continuing Director by a majority of
Continuing Directors.
VOTING REQUIREMENTS FOR CERTAIN AMENDMENTS TO THE CHARTER. The Charter
provides that the provisions set forth in this section may not be repealed or
amended in any respect, unless such action is approved by the affirmative vote
of the holders or not less than two-thirds of the voting power of the Company.
The requirement of an increased stockholder vote is designed to prevent a
stockholder who controls a majority of the voting power of the Company from
avoiding the requirements of the provisions discussed above by simply amending
or repealing such provisions.
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STOCKHOLDER RIGHTS PLAN
The following description of the Rights Agreement is qualified in its entirety
by reference to the Rights Agreement, a copy of which may be obtained from NTL
or the sources described under "Where you can find more information."
On August 27, 1993, our Board of Directors adopted the Rights Agreement. The
Rights Agreement provides that one Right will be issued with each share of the
Common Stock issued (whether originally issued or from our treasury) on or after
the date of the Merger and prior to the Rights Distribution Date (as hereinafter
defined). The Rights are not exercisable until the Rights Distribution Date and
will expire at the close of business on the date which is 10 years from the date
of the Distribution unless previously redeemed by us as described below. When
exercisable, each Right entitles the owner to purchase from us one-hundredth of
a share of Rights Preferred Stock at a purchase price of $100.00.
Except as described below, the Rights will be evidenced by all the Common Stock
certificates will be distributed. The Rights will separate from the Common Stock
and a "Rights Distribution Date" will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding shares of the
Common Stock (the "Stock Acquisition Date") and (ii) 10 business days following
the commencement of a tender offer or exchange offer that would result in a
person or group becoming an Acquiring Person.
After the Rights Distribution Date, Rights certificates will be mailed to
holders of record of the Common Stock as of the Rights Distribution Date and
thereafter the separate Rights certificates alone will represent the Rights.
The Rights Preferred Stock issuable upon exercise of the Rights will be entitled
to a minimum preferential quarterly dividend payment of $.01 per share and will
be entitled to an aggregate dividend of 100 times the dividend, if any, declared
per share of Common Stock. In the event of liquidation, the holders of the
Rights Preferred Stock will be entitled to a minimum preferential liquidation
payment of $1.00 per share and will be entitled to an aggregate payment of 100
times the payment made per share of the Common Stock. Each share of Rights
Preferred Stock will have 100 votes and will vote together with the Common
Stock. In the event of any merger, consolidation or other transaction in which
shares of the Common Stock are changed or exchanged, each share of Rights
Preferred Stock will be entitled to receive 100 times the amount received per
share of the Common Stock. These rights are protected by customary antidilution
provisions. Because of the nature of the Rights Preferred Stock's dividend,
liquidation and voting rights, the value of one one-hundredth of a share of
Rights Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of the Common Stock.
In the event that a person becomes an Acquiring Person (except pursuant to a
tender offer or an exchange offer for all outstanding shares of Common Stock at
a price and on terms determined by at least a majority of the members of the
Company's Board of Directors who are not officers of the Company and how are not
representatives, nominees, affiliates or associates or an Acquiring Person, to
be (i) at a price which is fair to our stockholders and (ii) otherwise in our
best interests and our stockholders (a "Qualifying Offer")), each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price, the Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the exercise price of the Right. Notwithstanding any of the forgoing,
following the occurrence of any such event, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were beneficially owned
by any Acquiring Person (or certain related parties) will be null and void.
However, Rights are not exercisable following the occurrence of the event set
forth above until such time as the Rights are no longer redeemable by us set
forth below.
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In the event that, at any time following the Stock Acquisition Date, (i) we are
acquired in a merger or other business combination transaction in which the
Company is not the surviving corporation or the Common Stock is changed or
exchanged (other than a merger which follows a Qualifying Offer and satisfies
certain other requirements) or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the
right to receive, upon the exercise thereof at the then current price, Common
Stock of the acquiring company having a value equal to two times the exercise
price of the Right.
At any time until 10 days following the Stock Acquisition Date, we may redeem
the Rights in whole, but not part, at a price of $.01 per Right. Immediately
upon the action of our Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only Right of the holders of the Rights will be to
receive the $.01 redemption price.
Until a Right is exercised, the holder thereof, as such, all have no rights as a
stockholder of the Company, including without limitation, the right to vote or
to receive dividends. While the distribution of the Rights will not be taxable
to stockholders or to us, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable for the
Common Stock (or other consideration) or for Common Stock of the acquiring
company as set forth above.
Other than those provisions relating to the principal terms of the Rights, any
of the provisions of the Rights Agreement may be amended by our Board of
Directors prior to the Rights Distribution Date. After the Rights Distribution
Date, the provisions of the Rights Agreement may be amended by our Board of
Directors in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person) or to shorten or lengthen any time period under the Rights
Agreement, provided that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
The Rights have certain anti-takeover effects as they will cause substantial
dilution to a person or group that acquires a substantial interest in the
Company without the prior approval of our Board of Directors. The effect of the
Rights may be to inhibit a change in control of the Company (including through a
third party tender offer at a price which reflects a premium to then prevailing
trading prices) that may be beneficial to the our stockholders.
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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain anticipated U.S. federal income
tax consequences of the ownership of the Shares as of the date hereof. It deals
only with Shares held as capital assets by initial purchasers that are United
States holders and does not deal with special situations, such as those of
foreign persons, dealers in securities, financial institutions, life insurance
companies, holders whose "functional currency" is not the U.S. dollar, or
special rules with respect to certain "straddle" or hedging transactions. The
discussion below is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), and regulations, rulings and judicial decisions thereunder as of
the date hereof, and such authorities may be repealed or modified (including
retroactively) so as to result in federal income tax consequences different from
those discussed below. We urge selling stockholders to consult their own tax
advisors with respect to the effect of the federal income, as well as state,
local or other tax laws, on an investment in Shares.
DIVIDENDS ON SHARES. Holders of Shares will recognize ordinary income upon the
receipt of a dividend of cash or additional shares of Convertible Preferred
Stock, to the extent, if any, of the Company's current or accumulated earnings
and profits as calculated for federal income tax purposes. The amount includable
in income in the case of a dividend of Convertible Preferred Stock is the fair
market value of such stock received. Accordingly, holders may recognize income
and incur tax liability with respect to such dividends without receiving the
corresponding amount of cash. A holder's holding period in any Convertible
Preferred Stock received as a dividend (or as a return of capital as described
below) will commence on the date following the distribution date.
A distribution of cash or shares of Convertible Preferred Stock in an amount in
excess of the Company's current and accumulated earnings and profits will be a
tax free return of capital to the extent of a holder's tax basis in his
underlying shares of Convertible Preferred Stock, and thereafter, will
constitute capital gain. Any capital gain will be long-term if, as of the date
of payment, the holder held the shares of Convertible Preferred Stock on which
the distribution is made for more than one year.
Amounts taxed as dividends for federal income tax purposes that are received by
corporate holders generally will be eligible for the 70% dividends-received
deduction under Section 243 of the Code. There are, however, many exceptions
relating to the availability of such dividends-received deduction, including
relating to (i) the required holding period of the stock on which the dividends
are paid, (ii) the prohibition against debt-financed portfolio stock, (iii)
dividends treated as "extraordinary dividends" for purposes of Section 1059 of
the Code, and (iv) the reduction in benefit for taxpayers who pay alternative
minimum tax. Corporate stockholders should consult their own tax advisors
regarding the extent, if any, to which such exceptions and restrictions may
apply to their particular factual situations.
SALE OF SHARES. Except as described below concerning sales of Convertible
Preferred Stock to the Company, for federal income tax purposes, a holder of a
share of Convertible Preferred Stock will recognize gain or loss on any sale or
exchange of a share of Convertible Preferred Stock measured by the difference
between the selling price and the holder's tax basis in such share. If the
holder holds such share of Convertible Preferred Stock as a capital asset, the
gain or loss will be long-term capital gain, if it is held for more than one
year.
If a holder sells his Convertible Preferred Stock to the Company for cash, the
holder will be treated either as having sold such stock or as having received a
distribution from the Company. In this regard, under Section 302 of the Code, a
holder generally will be treated as having sold Shares if the sale to the
Company (a) results in a "complete termination" of the holder's interest in the
Company, (b) is "substantially disproportionate" with respect to the holder, or
(c) is "not essentially equivalent to a dividend" with respect to the holder. In
determining whether any of these tests are met, stock in
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the Company actually owned, as well as considered to be owned by reason of the
constructive ownership rules of Section 318 of the Code, generally must be taken
into account. A holder who meets any of these tests will recognize capital gain
or loss upon the sale of his Convertible Preferred Stock to the Company, as
described above.
If none of the tests of Section 302(b) of the Code is met, cash received by a
holder upon redemption by the Company of Convertible Preferred Stock will be a
"dividend" to the extent of such holder's share of the Company's current and
accumulated earnings and profits, and the excess of such amounts received over
the portion that is taxable as a dividend would constitute a non-taxable return
of capital (to the extent of the holder's tax basis in the Shares redeemed). Any
amount in excess of the holder's tax basis would constitute capital gain. Any
remaining tax basis in the Convertible Preferred Stock redeemed would be
transferred to any remaining stockholdings of the holder of the Company.
If a holder receives Common Stock in exchange for Convertible Preferred Stock,
such holder should be taxed as described below under "Conversion of Convertible
Preferred Stock."
CONVERSION OF CONVERTIBLE CONVERTIBLE PREFERRED STOCK. A holder generally will
not recognize gain or loss upon the conversion or exchange of a share of
Preferred Stock into Common Stock (other than to the extent any dividend
arrearages are satisfied by the Common Stock received). Except for any shares of
Common Stock treated as payment of a dividend arrearage, a holder's holding
period in the shares of Common Stock received upon conversion or exchange will
include the period during which he held the converted or exchanged shares of
Convertible Convertible Preferred Stock, and such holder's tax basis in each
share of Convertible Preferred Stock will be allocated to such shares of Common
Stock according to their relative fair market value on the conversion or
exchange date. The receipt of cash in lieu of a fractional share upon conversion
or exchange of the Convertible Preferred Stock to Common Stock generally will be
treated as a sale of such fractional share of Common Stock in which the holder
will recognize taxable gain or loss equal to the difference between the amount
of cash received and the holder's tax basis in the fractional share redeemed.
Such gain or loss will be capital gain or loss and will be long-term if the
holder's holding period exceeds one year.
ADJUSTMENTS TO CONVERSION PROVISIONS. Adjustments made to the conversion ratio,
or the failure to make such adjustments, may result in a taxable distribution to
the holders of Shares pursuant to Section 305 of the Code.
THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSIDERATIONS IS A
GENERAL SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES FROM AN INVESTMENT IN
CONVERTIBLE PREFERRED STOCK. EACH PURCHASER OF THE CONVERTIBLE PREFERRED STOCK
IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO
IT, INCLUDING THOSE UNDER STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS.
SELLING STOCKHOLDERS
The Selling Stockholders (including their assignees and transferees) may from
time to time offer and sell pursuant to this prospectus any or all of the
Shares. Neither the filing with the Commission of the Registration Statement of
which this prospectus is a part nor the distribution of this prospectus should
be construed to suggest that any or all of the Shares being offered for the
account of the Selling Stockholders are being offered for sale at any given
time.
27
<PAGE> 32
PLAN OF DISTRIBUTION
The Securities covered by this prospectus may be offered and sold from time to
time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale except that the Shares are subject to certain
contractual restriction on transfer as set forth in the Registration Rights
Agreement.
Subject to those restrictions, the Shares may be sold from time to time in one
or more transactions to purchasers either directly by the Selling Stockholders,
through agents designated by the Selling Stockholders or to or through brokers,
dealers or underwriters to be designated by the Selling Stockholders, at such
prices (whether at fixed offering prices, prevailing market prices, varying
prices determined at the time of sale or otherwise) and on such terms as may be
determined by the Selling Stockholders at the time of sale. Additionally, sales
of the Common Stock may be made on the Nasdaq or in the over-the-counter market
or otherwise. Such agents, brokers, dealers or underwriters will likely receive
commissions or discounts from the Selling Stockholders which may exceed
customary and ordinary amounts to be negotiated immediately prior to the sale.
The Selling Stockholders and any agents, dealers or underwriters that
participate with the Selling Stockholders in the distribution of the Shares
offered hereby may be deemed to be "underwriters" within the meaning of the
Securities Act and any commissions received by them and any profit on the resale
of the Shares purchased by them may be deemed underwriting commissions or
discounts under the Securities Act.
To the extent required under the Securities Act, the aggregate amount of Shares
being offered and the terms of the offering, the names of any such agents,
brokers, dealers or underwriters and any applicable commission with respect to a
particular offer will be set forth in an accompanying Prospectus supplement. The
aggregate proceeds to the Selling Stockholders from the sale of the Shares
offered hereby will be the selling price of the Shares sold less the aggregate
commissions and discounts thereon, if any, and other expenses of issuance and
distribution. None of the proceeds from the sale of the Shares offered hereby
will be received by us.
To comply with the securities laws of certain jurisdictions, if applicable, the
Shares may be offered or sold in such jurisdictions only through registered or
licensed brokers or dealers.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may be limited in its ability to engage
in market activities with respect to such Shares. In addition and without
limiting the foregoing, each Selling Stockholder will be subject to
- applicable provisions of the Exchange Act and the rules an regulations
thereunder and
- the provisions of the 9.9% Certificate of Designations, which provisions
may limit the timing of purchases and sales of the Shares by the Selling
Stockholders (including pursuant to an underwritten offering).
All of the foregoing may affect the marketability of the Shares.
ENFORCEABILITY OF CIVIL LIABILITIES
A substantial portion of the assets of the Company's subsidiaries are located in
the UK. The United States and England do not currently have a treaty providing
for the reciprocal recognition and enforcement of judgments (other than
arbitration awards) in civil and commercial matters. Therefore, you may not
succeed automatically in an attempt to enforce in England a final judgment for
the payment of a fixed debt rendered by a United States court. In order to
enforce in England a United States judgment, you must initiate proceedings by
way of common law action before a court of competent jurisdiction in England. An
English court will, subject to what is said below, normally
28
<PAGE> 33
order summary judgment on the basis that there is no defense to the claim for
payment and will not reinvestigate the merits of the original dispute. In such
an action, an English Court will treat the United States judgment as creating a
valid debt upon which the judgment creditor could bring an action for payment,
as long as:
- the United States court had jurisdiction over the original proceeding,
- the judgement is final and conclusive on the merits,
- the judgement does not contravene English public policy,
- the judgment must not be for a tax, penalty or a judgment arrived at by
doubling, trebling or otherwise multiplying a sum assessed as
compensation for the loss or damage sustained, and
- the judgement has not been obtained by fraud or in breach of the
principles of natural justice.
In conclusion, we cannot assure you that you will be able to enforce in England
judgments in civil and commercial matters obtained in any United States court.
There is also some doubt as to whether an English court would impose civil
liability in an original action based solely on the United States federal
securities laws.
29
<PAGE> 34
LEGAL MATTERS
The validity of the Shares will be passed upon for the Company by Skadden, Arps,
Slate, Meagher & Flom LLP, New York, New York, special counsel to the Company.
EXPERTS
The consolidated financial statements and schedules of the Company appearing in
the Company's Annual Report (Form 10-K/A-1) for the year ended December 31,
1997, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements and schedules are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997 of Comcast UK
Cable Partners Limited and subsidiaries have been incorporated herein by
reference and have been audited by Deloitte & Touche LLP, independent auditors,
as stated in their report, which is also incorporated by reference herein and
has been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
The consolidated financial statements as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997 of Birmingham
Cable Corporation Limited and Cable London PLC have been incorporated herein by
reference and have been audited by Deloitte & Touche, independent auditors, as
stated in their reports, which are also incorporated by reference herein and
have been so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
The combined financial statements of ComTel UK Finance, B.V. and its
subsidiaries as of and for the year ended December 31, 1997 and the combined
financial statements of Telecential Communications (Canada) limited and
Telecential Communications (UK) Limited as of and for the 16 months ended
December 31, 1996, each have been incorporated herein by reference and have been
audited by Deloitte & Touche, independent auditors, as stated in their reports,
which are also incorporated by reference herein and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
The combined financial statements as of and for the year ended December 31, 1996
of ComTel UK Finance B.V. have been incorporated herein by reference in reliance
on the report of Coopers & Lybrand, independent Chartered Accountants, given on
the authority of such firm as experts in accounting and auditing.
30
<PAGE> 35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[NTL LOGO]
SHARES OF CONVERTIBLE PREFERRED STOCK AND COMMON STOCK
NTL INCORPORATED
The date of this prospectus is November 5, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all expenses (subject to future
contingencies) incurred or expected to be incurred by the Company in connection
with the Offering.
<TABLE>
<S> <C>
SEC registration fee........................................ $39,139.62
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Printing and engraving fees................................. *
Miscellaneous expenses...................................... *
Total............................................. *
</TABLE>
- -------------------------
(*) To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 102 of the Delaware General Corporation Law (the
"DGCL"), the Company's Amended and Restated Certificate of Incorporation
eliminates a director's personal liability for monetary damages to the Company
and its stockholders arising from a breach or alleged breach of a director's
fiduciary duty except for liability under Section 174 of the DGCL or liability
for a breach of the director's duty of loyalty to the Company or its
stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law or for any transaction in
which the director derived an improper personal benefit. The effect of this
provision in the certificate of incorporation is to eliminate the rights of the
Company and its stockholders (through stockholders, derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
fiduciary duty as a director (including breaches resulting from negligent or
grossly negligent behavior) except in the situations described above.
The Company's Restated By-laws provide that directors and officers of the
Company shall be indemnified against liabilities arising from their service as
directors and officers to the full extent permitted by law. Section 145 of the
DGCL empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the corporation
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.
Section 145 also empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the fight of the corporation to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including attorney's fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if
II-1
<PAGE> 37
he acted under similar standards, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless, and only to the extent that,
the Court of Chancery or the court in which such action was brought shall
determine that despite the adjudication of liability such person is fairly and
reasonably entitled to indemnify for such expenses which the court shall deem
proper.
Section 145 further provides that to the extent that a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to above or in the defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith; that indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; and that the corporation is
empowered to purchase and maintain insurance on behalf of a director or officer
of the corporation against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether or not
the corporation would have the power to indemnify him against such liabilities
under Section 145.
The Company has entered into a director and officer indemnity agreement
("Indemnity Agreement") with each officer and director of the Company (an
"Indemnitee"). Under the bylaws and these Indemnity Agreements, the Company must
indemnify an Indemnitee to the fullest extent permitted by the DGCL for losses
and expenses incurred in connection with actions in which the indemnitee is
involved by reason of having been a director or officer of the Company. The
Company is also obligated to advance expenses an indemnitee may incur in
connection with such actions before any resolution of the action.
ITEM 16. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
3.1 Restated Certificate of Incorporation of the Registrant, as
amended by the Certificate of Amendment, dated June 5, 1996*
3.2 Restated By-laws of the Registrant**
4.1 Specimen of Common Stock Certificate of the Registrant**
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
the legality of the securities being registered hereby***
23.1 Consent of Ernst & Young LLP
23.2 Consent of Deloitte & Touche LLP -- Comcast UK Cable
Partners
23.3 Consent of Deloitte & Touche -- Birmingham Cable
23.4 Consent of Deloitte & Touche -- Cable London
23.5 Consent of Deloitte & Touche
23.6 Consent of Coopers & Lybrand
23.7 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1)***
</TABLE>
- -------------------------
* Incorporated by reference to the Registrant's Registration Statement on Form
S-3, File No. 333-07879.
** Incorporated by reference from the Registrant's Registration Statement on
Form S-1, File No. 33-63570.
*** To be filed by amendment.
II-2
<PAGE> 38
ITEM 17. UNDERTAKINGS
(A) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Securities
Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(B) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(C) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(D) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York, on the fifth day of
November, 1998.
NTL Incorporated
By /s/ RICHARD J. LUBASCH
------------------------------------
Richard J. Lubasch
Senior Vice President --
General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ GEORGE S. BLUMENTHAL Chairman of the Board, Treasurer November 5, 1998
- --------------------------------- and Director
George S. Blumenthal
/s/ J. BARCLAY KNAPP President, Chief Executive and November 5, 1998
- --------------------------------- Financial Officer and Director
J. Barclay Knapp
/s/ GREGG GORELICK Vice President -- Controller November 5, 1998
- ---------------------------------
Gregg Gorelick
/s/ SIDNEY R. KNAFEL Director November 5, 1998
- ---------------------------------
Sidney R. Knafel
/s/ TED H. MCCOURTNEY Director November 5, 1998
- ---------------------------------
Ted H. McCourtney
/s/ DEL MINTZ Director November 5, 1998
- ---------------------------------
Del Mintz
/s/ ALAN J. PATRICOFF Director November 5, 1998
- ---------------------------------
Alan J. Patricof
/s/ WARREN POTASH Director November 5, 1998
- ---------------------------------
Warren Potash
/s/ MICHAEL S. WILLNER Director November 5, 1998
- ---------------------------------
Michael S. Willner
</TABLE>
II-4
<PAGE> 40
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
3.1 Restated Certificate of Incorporation of the Registrant, as
amended by the Certificate of Amendment, dated June 5, 1996*
3.2 Restated By-laws of the Registrant**
4.1 Specimen of Common Stock Certificate of the Registrant**
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to
the legality of the securities being registered hereby***
23.1 Consent of Ernst & Young LLP
23.2 Consent of Deloitte & Touche LLP -- Comcast UK Cable
Partners
23.3 Consent of Deloitte & Touche -- Birmingham Cable
23.4 Consent of Deloitte & Touche -- Cable London
23.5 Consent of Deloitte & Touche
23.6 Consent of Coopers & Lybrand
23.7 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1)***
</TABLE>
- -------------------------
* Incorporated by reference to the Registrant's Registration Statement on Form
S-3, File No. 333-07879.
** Incorporated by reference from the Registrant's Registration Statement on
Form S-1, File No. 33-63570.
*** To be filed by amendment.
II-6
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of NTL Incorporated and
Subsidiaries (the "Company") for the registration of shares of its Convertible
Preferred Stock and Common Stock issuable upon redemption of the Company's 9.9%
Non-Voting Mandatorily Redeemable Preferred Stock, Series A and to the
incorporation by reference therein of our report dated March 20, 1998, with
respect to the consolidated financial statements and schedules of the Company
included in its Annual Report (Form 10-K/A-1) for the year ended December 31,
1997, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
--------------------------------------
ERNST & YOUNG LLP
New York, New York
November 5, 1998
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
NTL Incorporated on Form S-3 of our report dated February 27, 1998, appearing in
Registration Statement No. 333-64727 of NTL Incorporated on Form S-4, on the
consolidated financial statements as of December 31, 1997 and 1996 and for each
of the three years in the period ended December 31, 1997 of Comcast UK Cable
Partners and subsidiaries, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of such Registration Statement on
Form S-3.
/s/ DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
October 29, 1998
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
NTL Incorporation on Form S-3 of our report dated February 27, 1998 (March 16,
1998 as to Note 3), appearing in Registration Statement No. 333-64727 of NTL
Incorporated on Form S-4, on the consolidated financial statements as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 of Birmingham Cable Corporation Limited and subsidiaries, and
to the reference to us under the heading "Experts" in the Prospectus, which is
part of such Registration Statement on Form S-3.
/s/ DELOITTE & TOUCHE
Birmingham, England
October 29, 1998
<PAGE> 1
EXHIBIT 23.4
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
NTL Incorporated on Form S-3 of our report dated February 27, 1998, appearing in
Registration Statement No. 333-64727 of NTL Incorporated on Form S-4, on the
consolidated financial statements as of December 31, 1997 and 1996 and for each
of the three years in the period ended December 31, 1997 of Cable London PLC and
subsidiaries, and to the reference to us under the heading "Experts" in the
Prospectus, which is part of such Registration Statement on Form S-3.
/s/ DELOITTE & TOUCHE
London, England
October 29, 1998
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated June 5, 1998 (except note 10 as to which the date is
July 16, 1998) with respect to the combined financial statements of ComTel UK
Finance B.V. as of and for the year ended December 31, 1997, and of our report
dated June 5, 1998 (except note 9 as to which the date is July 16, 1998) with
respect to the combined financial statements of Telecential Communications
(Canada) Limited and Telecential Communications (UK) Limited as of and for the
sixteen month period ended December 31, 1996, included by reference in the Form
S-3 to be filed by NTL Incorporated, in connection with the issue of Convertible
Preferred and Common Stock Shares.
/s/ DELOITTE & TOUCHE
Chartered Accountants
Bracknell, England
November 5, 1998
<PAGE> 1
EXHIBIT 23.6
5 November 1998
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in the Registration
Statement of NTL Incorporated on Form S-3, of our report, dated 5 June 1998,
except for Note 10 as to which the date is 16 July 1998, on our audit of the
Combined Financial Information of ComTel UK Finance B.V. as of and for the year
ended 31 December 1996. We also consent to the references to our firm under the
caption "Experts".
/s/ COOPERS & LYBRAND
Coopers & Lybrand
Chartered Accountants
London, United Kingdom
