-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C7UcyOuMRJcE6H/pV9EbFzrVw/IhZgFyP82gWhqTK/8pMr5kxAiZWfN8pQ1qIXau m+i6cPi6KOyb1PjAWXu/Rg== 0000950134-96-001464.txt : 19960424 0000950134-96-001464.hdr.sgml : 19960424 ACCESSION NUMBER: 0000950134-96-001464 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960423 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JONES INTERCABLE INC CENTRAL INDEX KEY: 0000275605 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 840613514 STATE OF INCORPORATION: CO FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09953 FILM NUMBER: 96549498 BUSINESS ADDRESS: STREET 1: 9697 EAST MINERAL AVE CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3037923111 10-K/A 1 FORM 10-K AMENDMENT NO. 1 1 FORM 10-K/A NO. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) OR [X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from June 1, 1995 through December 31, 1995 Commission file number: 1-9953 JONES INTERCABLE, INC. ---------------------- (Exact name of registrant as specified in its charter) Colorado 84-0613514 -------- ---------- (State of Organization) (IRS Employer Identification No.) P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111 - --------------------------------------------- -------------- (Address of principal executive office and Zip Code) (Registrant's telephone no. including area code) Securities registered pursuant to Section 12(g) of the Act: ----------------------------------------------------------- Common Stock, $.01 par value Class A Common Stock, $.01 par value Indicate by check mark whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No --------- -------- Aggregate market value as of March 1, 1996 of the voting stock held by non-affiliates: Common Stock $29,799,088 Class A Common Stock $185,738,121 Shares outstanding of each of the registrant's classes of common stock as of March 1, 1996: Common Stock: 5,113,021 Class A Common Stock: 26,263,523 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. --------- 2 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The Company's Articles of Incorporation provide that, with respect to the election of Directors, the holders of Class A Common Stock, voting as a separate class, are entitled to elect that number of Directors constituting 25% of the total membership of the Board of Directors. If such 25% is not a whole number, holders of Class A Common Stock are entitled to elect the nearest higher whole number of Directors constituting 25% of the membership of the Board of Directors. Holders of Common Stock, voting as a separate class, are entitled to elect the remaining Directors. Pursuant to the terms of the Shareholders Agreement dated as of December 20, 1994 among Glenn R. Jones, Jones International, Ltd., Bell Canada International Inc. ("BCI") and the Company (the "Shareholders Agreement"), the Company's Board of Directors consists of 13 directors. William E. Frenzel, Donald L. Jacobs, John A. MacDonald and Robert B. Zoellick are serving as the Class A Directors and Glenn R. Jones, Derek H. Burney, Robert E. Cole, James J. Krejci, James B. O'Brien, Raphael M. Solot, Daniel E. Somers, Howard O. Thrall and Raymond L. Vigil are serving as the Common Directors. The parties to the Shareholders Agreement have agreed that of the four Class A Directors, BCI will be entitled, but not required, to designate one Director and the remaining three directors, which shall be Independent Directors (as such term is defined in the Shareholders Agreement), will be jointly designated by Glenn R. Jones and BCI. The parties to the Shareholders Agreement also have agreed that Mr. Jones will be entitled, but not required, to designate seven of the nine Common Directors and that BCI will be entitled, but not required, to designate two of the nine Common Directors. The Company has agreed that in the event that Mr. Jones or BCI chooses to designate one or more nominees to the Board of Directors pursuant to the terms of the Shareholders Agreement, the Company will use its reasonable efforts to include each such nominee in the group of nominees proposed by management of the Company for election to the Board, recommend to the shareholders of the Company each such nominee's election to the Board and solicit proxies for each such nominee from all holders of voting securities entitled to vote thereon. In addition, each of BCI and Mr. Jones have agreed to vote or cause to be voted all of the shares of the Company owned or controlled by them at any meeting of shareholders of the Company, or in any written consent executed in lieu of such a meeting of shareholders, in favor of their mutual nominees to the Board of Directors. 2 3 Certain additional information concerning the executive officers and directors of the Company is set forth below. Glenn R. Jones 66 Chairman of the Board and Chief Executive Officer Derek H. Burney 56 Vice Chairman of the Board James B. O'Brien 46 President and Director Ruth E. Warren 46 Group Vice President/Operations Kevin P. Coyle 44 Group Vice President/Finance Christopher J. Bowick 40 Group Vice President/Technology George H. Newton 61 Group Vice President/Telecommunications Timothy J. Burke 45 Group Vice President/Taxation/Administration Raymond L. Vigil 49 Group Vice President/Human Resources and Director Cynthia A. Winning 45 Group Vice President/Marketing Elizabeth M. Steele 44 Vice President and Secretary Larry W. Kaschinske 36 Controller Robert E. Cole 63 Director William E. Frenzel 67 Director Donald L. Jacobs 58 Director James J. Krejci 54 Director John A. MacDonald 42 Director Raphael M. Solot 62 Director Daniel E. Somers 48 Director Howard O. Thrall 48 Director Robert B. Zoellick 42 Director Mr. Glenn R. Jones has served as Chairman of the Board of Directors and Chief Executive Officer of the Company since its formation in 1970, and he was President from June 1984 until April 1988. Mr. Jones is the sole shareholder, President and Chairman of the Board of Directors of Jones International, Ltd. He is also Chairman of the Board of Directors of the subsidiaries of the Company and of certain other affiliates of the Company. Mr. Jones has been involved in the cable television business in various capacities since 1961, is a past and present member of the Board of Directors and the Executive Committee of the National Cable Television Association. He also is on the Executive Committee of Cable in the Classroom, an organization dedicated to education via cable. Additionally, in March 1991, Mr. Jones was appointed to the Board of Governors for the American Society for Training and Development, and in November 1992 to the Board of Education Council of the National Alliance of Business. Mr. Jones is also a founding member of the James Madison Council of the Library of Congress. Mr. Jones is a past director and member of the Executive Committee of C-Span. Mr. Jones has been the recipient of several awards including the Grand Tam Award in 1989, the highest award from the Cable Television Administration and Marketing Society; the Chairman's Award from the Investment Partnership Association, which is an association of sponsors of public syndications; the cable television industry's Public Affairs Association President's Award in 1990, the Donald G. McGannon award for the advancement 3 4 of minorities and women in cable; the STAR Award from American Women in Radio and Television, Inc. for exhibition of a commitment to the issues and concerns of women in television and radio; the Women in Cable Accolade in 1990 in recognition of support of this organization; the Most Outstanding Corporate Individual Achievement award from the International Distance Learning Conference; the Golden Plate Award from the American Academy of Achievement for his advances in distance education; the Man of the Year named by the Denver chapter of the Achievement Rewards for College Scientists; and in 1994 Mr. Jones was inducted into Broadcasting and Cable's Hall of Fame. Mr. Derek H. Burney was appointed a director of the Company on December 20, 1994 and Vice Chairman of the Board of Directors on January 31, 1995. Mr. Burney joined BCE Inc., Canada's largest telecommunications company, in January 1993 as Executive Vice President, International. He has been the Chairman of Bell Canada International Inc., a subsidiary of BCE, since January 1993 and, in addition, has been Chief Executive Officer of BCI since July 1993. Prior to joining BCE, Mr. Burney served as Canada's ambassador to the United States from 1989 to 1992. Mr. Burney also served as chief of staff to the Prime Minister of Canada from March 1987 to January 1989 where he was directly involved with the negotiation of the U.S. - Canada Free Trade Agreement. In July 1993, he was named an Officer of the Order of Canada. Mr. Burney is chairman of Bell Cablemedia plc. He is a director of Mercury Communications Limited, Videotron Holdings plc, Tele-Direct (Publications) Inc., Teleglobe Inc., Bimcor Inc., Maritime Telegraph and Telephone Company, Limited, Moore Corporation Limited and Northbridge Programming Inc. Mr. James B. O'Brien, the Company's President, joined the Company in January 1982. Prior to being elected President and a director of the Company in December 1989, Mr. O'Brien served as a Division Manager, Director of Operations Planning/Assistant to the CEO, Fund Vice President and Group Vice President/Operations. Mr. O'Brien was appointed to the Company's Executive Committee in August 1993. As President, he is responsible for the day-to-day operations of the cable television systems managed and owned by the Company. Mr. O'Brien is a board member of Cable Labs, Inc., the research arm of the U.S. cable television industry. He also serves as a director of the Cable Television Administration and Marketing Association and as a director of the Walter Kaitz Foundation, a foundation that places people of ethnic minority groups in positions with cable television systems, networks and vendor companies. Ms. Ruth E. Warren joined the Company in August 1980 and has served in various operational capacities, including system manager and Fund Vice President, since then. Ms. Warren was elected Group Vice President/Operations of the Company in September 1990. Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice President/Financial Services. In September 1985, he was appointed Senior Vice President/Financial Services. He was elected Treasurer of the Company in August 1987, Vice President/Treasurer in April 1988 and Group Vice President/Finance and Chief Financial Officer in October 1990. 4 5 Mr. Christopher J. Bowick joined the Company in September 1991 as Group Vice President/Technology and Chief Technical Officer. Previous to joining the Company, Mr. Bowick worked for Scientific Atlanta's Transmission Systems Business Division in various technical management capacities since 1981, and as Vice President of Engineering since 1989. Mr. George H. Newton joined the Company in January 1996 as Group Vice President/Telecommunications. Prior to joining the Company, Mr. Newton was President of his own consulting business, Clear Solutions, and since 1994 Mr. Newton has served as a Senior Advisor to Bell Canada International. From 1990 to 1993, Mr. Newton served as the founding Chief Executive Officer and Managing Director of Clear Communications, New Zealand, where he established an alternative telephone company in New Zealand. From 1964 to 1990, Mr. Newton held a wide variety of operational and business assignments with Bell Canada International. Mr. Timothy J. Burke joined the Company in August 1982 as corporate tax manager, was elected Vice President/Taxation in November 1986 and Group Vice President/Taxation/Administration in October 1990. Mr. Raymond L. Vigil joined the Company in June 1993 as Group Vice President/Human Resources. Previous to joining the Company, Mr. Vigil served as Executive Director of Learning with USWest. Prior to USWest, Mr. Vigil worked in various human resources posts over a 14-year term with the IBM Corporation. Ms. Cynthia A. Winning joined the Company as Group Vice President/Marketing in December 1994. Previous to joining the Company, Ms. Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a sports and event marketing company. From 1979 to 1981 and from 1986 to 1994, Ms. Winning served as the Vice President and Director of Marketing for Citicorp Retail Services, Inc., a provider of private-label credit cards for ten national retail department store chains. From 1981 to 1986, Ms. Winning was the Director of Marketing Services for Daniels & Associates cable television operations, as well as the Western Division Marketing Director for Capital Cities Cable. Ms. Winning also serves as a board member of Cities in Schools, a dropout intervention/prevention program. Ms. Elizabeth M. Steele joined the Company in August 1987 as Vice President, General Counsel and Secretary. From August 1980 until joining the Company, Ms. Steele was an associate and then a partner at the Denver law firm of Davis, Graham & Stubbs, which serves as counsel to the Company. Mr. Larry Kaschinske joined the Company in 1984 as a staff accountant in the Company's former Wisconsin Division, was promoted to Assistant Controller in 1990 and named Controller in August 1994. Mr. Robert E. Cole was appointed a director of the Company in March 1996. Mr. Cole is currently self-employed as a partner of First Variable Insurance Marketing and is responsible for marketing to National Association of Securities Dealers, Inc. firms in northern 5 6 California, Oregon, Washington and Alaska. From 1993 to 1995, Mr. Cole was the Director of Marketing for Lamar Life Insurance Company; from 1992 to 1993, Mr. Cole was Senior Vice President of PMI Inc., a third party lender serving the special needs of Corporate Owned Life Insurance (COLI) and from 1988 to 1992, Mr. Cole was the principal and co-founder of a specialty investment banking firm that provided services to finance the ownership and growth of emerging companies, productive assets and real property. Mr. Cole is a Certified Financial Planner and a former United States Naval Aviator. Mr. William E. Frenzel was appointed a director of the Company on April 11, 1995. Mr. Frenzel has been a Guest Scholar since 1991 with the Brookings Institution, a research organization located in Washington D. C. Until his retirement in January 1991, Mr. Frenzel served for twenty years in the United States House of Representatives, representing the State of Minnesota, where he was a member of the House Ways and Means Committee and its Trade Subcommittee, the Congressional Representative to the General Agreement on Tariffs and Trade (GATT), the Ranking Minority Member on the House Budget Committee and a member of the National Economic Commission. Mr. Frenzel also served in the Minnesota Legislature for eight years. He is a Distinguished Fellow of the Tax Foundation, Vice Chairman of the Eurasia Foundation, a Board Member of the U.S.-Japan Foundation, the Close-Up Foundation, Sit Mutual Funds and Chairman of the Japan-America Society of Washington. Mr. Donald L. Jacobs was appointed a director of the Company on April 11, 1995. Mr. Jacobs is a retired executive officer of TRW. Prior to his retirement, he was Vice President and Deputy Manager of the Space and Defense Sector; prior to that appointment, he was the Vice President and General Manager of the Defense Systems Group and prior to his appointment as Group General Manager, he was President of ESL, Inc., a wholly owned subsidiary of TRW. During his career, Mr. Jacobs served on several corporate, professional and civic boards. Mr. James J. Krejci was President of the International Division of International Gaming Technology, International headquartered in Reno, Nevada, until March 1995. Prior to joining IGT in May 1994, Mr. Krejci was Group Vice President of Jones International, Ltd. and was Group Vice President of the Company. He also served as an officer of Jones Futurex, Inc., a subsidiary of the Company engaged in manufacturing and marketing data encryption devices, Jones Interactive, Inc., a subsidiary of Jones International, Ltd. providing computer data and billing processing facilities and Jones Lightwave, Ltd., a company owned by Jones International, Ltd. and Mr. Jones, and several of its subsidiaries engaged in the provision of telecommunications services until leaving the Company in May 1994. Mr. Krejci has been a director of the Company since August 1987. Mr. John A. MacDonald was appointed a director of the Company on November 8, 1995. Mr. MacDonald is Executive Vice President of Business Development and Chief Technology Officer of Bell Canada International Inc. Prior to joining Bell Canada in November 1994, Mr. MacDonald was President and Chief Executive Officer of The New Brunswick Telephone Company, Limited, a post he had held since March of that year. Prior 6 7 to March 1994, Mr. MacDonald was with NBTel for 17 years serving in various capacities, including Market Planning Manager, Corporate Planning Manager, Manager of Systems Planning and Development and General Manager, Chief Engineer and General Manager of Engineering and Information Systems and Vice President of Planning. Mr. MacDonald was the former Chairman of the New Brunswick section of the Institute of Electrical and Electronic Engineers and also served on the Federal Government's Information Highway Advisory Council. Mr. MacDonald is Chairman of MediaLinx Interactive Inc. and Stentor Canadian Network Management and is presently a Governor of the Montreal Exchange. He also serves on the Board of Directors of Tele-Direct (Publications) Inc., Bell-Northern Research, Ltd., SRCI, Bell Sygma, Canarie Inc., and is a member of the University of New Brunswick Venture Campaign Cabinet. Mr. Raphael M. Solot was appointed a director of the Company in March 1996. Mr. Solot is an attorney licensed to practice law in the State of Colorado. Mr. Solot has practiced law in the State of Colorado as a sole practitioner since obtaining his Juris Doctor degree from the University of Colorado in 1964. Mr. Daniel E. Somers was initially appointed a director of the Company on December 20, 1994. Mr. Somers resigned as a director on December 31, 1995, at the time he was elected Chief Executive Officer of Bell Cablemedia. Mr. Somers was reinstated as a director of the Company on February 2, 1996. From January 1992 to January 1995, Mr. Somers worked as senior Vice President and Chief Financial Officer of Bell Canada International Inc. and was appointed Executive Vice President and Chief Financial Officer on February 1, 1995. He is also a director of certain of its affiliates. Mr. Somers currently serves as Chief Executive Officer of Bell Cablemedia. Prior to joining Bell Canada International Inc. and since January 1989, Mr. Somers was a President and Chief Executive Officer of Radio Atlantic Holdings Limited. Mr. Somers is a member of the North American Society of Corporate Planning, the Financial Executives Institution and the Financial Analysts Federation. Mr. Howard O. Thrall was appointed a director of the Company on March 6, 1996. Mr. Thrall had previously served as a director of the Company from December 1988 to December 1994. Since September 1993, Mr. Thrall has served as Vice President of Sales, Asian Region, for World Airways, Inc. headquartered at the Washington Dulles International Airport. From 1984 until August 1993, Mr. Thrall was with the McDonnell Douglas Corporation, where he concluded as a Regional Vice President, Commercial Marketing with the Douglas Aircraft Company subsidiary. Mr. Thrall is also an active management and international marketing consultant, having completed assignments with First National Net, Inc., Cheong Kang Associated (Korea), Aero Investment Alliance, Inc. and Western Real Estate Partners, among others. Mr. Robert B. Zoellick was appointed a director of the Company on April 11, 1995. Mr. Zoellick is Executive Vice President, General Counsel and Corporate Secretary of Fannie Mae, a federally chartered and stockholder-owned corporation that is the largest housing finance investor in the United States. From August 1992 to January 1993, Mr. Zoellick 7 8 served as Deputy Chief of Staff of the White House and Assistant to the President. From May 1991 to August 1992, Mr. Zoellick served concurrently as the Under Secretary of State for Economic and Agricultural Affairs and as Counselor of the Department of State, a post he assumed in March 1989. From 1985 to 1988, Mr. Zoellick served at the Department of Treasury in a number of capacities, including Counselor to the Secretary. Mr. Zoellick received the Alexander Hamilton and Distinguished Service Awards, highest honors of the Departments of Treasury and State, respectively. The German Government awarded him the Knight Commanders Cross for his work on Germany unification. Mr. Zoellick currently serves on the boards of the Council on Foreign Relations, the Congressional Institute, the German Marshall Fund of the U.S., the European Institute, the National Bureau of Asian Research, the American Council on Germany and the Overseas Development Council. Derek H. Burney, John A. MacDonald and Daniel E. Somers are directors of the Company. Certain reports by these persons with respect to the ownership of stock in the Company, required by Section 16(a) of the Securities Exchange Act of 1934, as amended, were not filed within the required time. Messrs. Burney, MacDonald and Somers failed to timely file an initial report of ownership of stock in the Company. As disclosed in Item 12, Security Ownership of Certain Beneficial Owners, Directors and Management, Mr. Burney owns 350 shares of the Class A Common Stock of the Company, and Mr. Somers owns 100 shares of the Class A Common Stock of the Company. Mr. MacDonald does not own any shares of stock in the Company. ITEM 11. EXECUTIVE COMPENSATION Compensation Summary The following table sets forth certain information relating to the compensation paid by the Company during the Company's past three fiscal years ended May 31, 1995, 1994 and 1993 and for the twelve months ended December 31, 1995 to those persons who were, at December 31, 1995, the Chief Executive Officer and the other four most highly compensated executive officers of the Company. 8 9
LONG TERM --------- COMPENSATION ------------ ANNUAL COMPENSATION AWARDS ------------------- ------ NAME AND -------- ALL OTHER PRINCIPAL POSITION YEAR (1) SALARY BONUS OPTIONS COMPENSATION(2) ------------------ -------- ------ ----- ------- --------------- Glenn R. Jones (3) 1/1/95-12/31/95 $ 2,500,067 $ -0- 125,937(8) $ 150,006 Chairman of the Board FYE 5/31/95 1,401,846 900,000 122,269(8) 135,623 and Chief Executive FYE 5/31/94 530,420 630,000 418,708(8) 136,226 Officer FYE 5/31/93 684,651 600,000 230,000(9) 13,540 James B. O'Brien (4) 1/1/95-12/31/95 $ 230,866 $ 139,870 17,000(8) $ 19,852 President FYE 5/31/95 224,961 250,000 14,387(8) 28,498 FYE 5/31/94 196,568 52,500 12,307(8) 19,404 FYE 5/31/93 196,568 85,000 6,300(8) 5,740 Kevin P. Coyle (5) 1/1/95-12/31/95 $ 177,160 $ 53,007 8,085(8) $ 11,998 Group Vice President of FYE 5/31/95 173,616 74,895 7,762(8) 15,811 Finance FYE 5/31/94 168,559 45,000 5,008(8) 12,814 FYE 5/31/93 157,530 40,000 0 6,618 Ruth E. Warren (6) 1/1/95-12/31/95 $ 163,314 $ 49,056 7,860(8) $ 9,644 Group Vice President/ FYE 5/31/95 149,854 50,126 7,418(8) 7,888 Operations FYE 5/31/94 139,052 40,500 8,000(8) 3,414 FYE 5/31/93 131,180 48,534 4,500(8) 3,414 Elizabeth M. Steele (7) 1/1/95-12/31/95 $ 164,302 $ 52,650 6,000(8) $ 11,864 Vice President and FYE 5/31/95 192,823 117,000 6,000(8) 20,655 Secretary FYE 5/31/94 187,207 30,000 0 16,080 FYE 5/31/93 187,207 36,000 0 5,480
_________________ (1) The Company has changed its fiscal year from a year ending May 31 to a calendar year ending December 31. (2) The Company's employees are entitled to participate in a 401(k) profit sharing plan. Certain senior employees of the Company are also eligible to participate in a deferred compensation plan. The amounts shown in the column reflect the Company's contributions pursuant to these plans for the benefit of the named person's account. (3) Mr. Jones' salary, bonus, options and all other compensation for the transition period 6/1/95 through 12/31/95 were $1,458,391, $0, 125,937 and $87,504, respectively. (4) Mr. O'Brien's salary, bonus, options and all other compensation for the transition period 6/1/95 through 12/31/95 were $137,133, $139,870, 17,000 and $8,228, respectively. (5) Mr. Coyle's salary, bonus, options and all other compensation for the transition period 6/1/95 through 12/31/95 were $104,820, $53,007, 8,085 and $6,289, respectively. 9 10 (6) Ms. Warren's salary, bonus, options and all other compensation for the transition period 6/1/95 through 12/31/95 were $97,007, $49,056, 7,860 and $5,236, respectively. (7) Ms. Steele's salary, bonus, options and all other compensation for the transition period 6/1/95 through 12/31/95 were $83,959, $52,650, 6,000 and $6,508, respectively. (8) Represents the number of shares of the Company's Class A Common Stock underlying the options granted. (9) Represents 200,000 shares of the Company's Common Stock and 30,000 shares of the Company's Class A Common Stock underlying the options granted. The following table sets forth information with respect to grants of stock options during January 1, 1995 through December 31, 1995 for the Executive Officers named in the Summary Compensation Table.
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF STOCK PRICE APPRECIATION INDIVIDUAL GRANTS FOR OPTION TERM (1) - --------------------------------------------------------- ----------------------------------------------------- % OF TOTAL OPTIONS GRANTED TO ALL EMPLOYEES EXERCISE OPTIONS 1/1/95 TO PRICE EXPIRATION NAME GRANTED(2) 12/31/95 ($/SHARE) DATE 0% ANNUAL 5% ANNUAL 10% ANNUAL ---- ---------- -------- --------- ---- --------- --------- ---------- Glenn R. Jones 122,269 30.60% $12.56 01/03/2005 $ 0 $965,925 $2,447,825 125,937 32.55% $12.875 11/17/2005 $ 0 $1,020,090 $ 2,584,227 James B. O'Brien 14,387 3.60% $12.56 01/03/2005 $ 0 $113,657 $288,027 17,000 4.39% $12.875 11/17/2005 $ 0 $137,700 $348,840 Kevin P. Coyle 7,762 1.94% $12.56 01/03/2005 $ 0 $61,320 $155,392 8,085 2.09% $12.875 11/17/2005 $ 0 $65,488 $165,904 Ruth E. Warren 7,418 1.86% $12.56 01/03/2005 $ 0 $58,602 $148,508 7,860 2.03% $12.875 11/17/2005 $ 0 $63,666 $161,287 Elizabeth M. 6,000 1.50% $12.56 01/03/2005 $ 0 $47,400 $120,120 Steele 6,000 1.64% $12.875 11/17/2005 $ 0 $48,600 $123.120
- ------------------- (1) The dollar amounts shown under these columns are the result of calculations at 0%, 5% and 10% compound growth rates provided by the Securities and Exchange Commission, and therefore are not intended to forecast possible future appreciation of the Company's stock price. In all cases, the appreciation is calculated from the award date to the end of the option term. (2) Represents the number of shares of the Company's Class A Common Stock underlying the options granted. 10 11 No options were exercised during the period January 1, 1995 through December 31, 1995 by any of the Executive Officers named in the Summary Compensation Table. Compensation of Directors Directors of the Company who are not full-time employees of the Company or any of its affiliates receive $5,000 per fiscal quarter for their services as director, with an additional $1,250 to be paid to each such director for each regularly scheduled quarterly meeting of the Board of Directors attended in person. No additional compensation for director service is paid to directors who are full-time employees of the Company or any of its affiliates. In addition, Donald L. Jacobs, a director of the Company, and Philip R. Ladouceur, a former director of the Company, each were compensated $5,000 during 1995 for their services to the Board of Directors in connection with their comprehensive review of a customer management and billing system. Employment Agreement On December 20, 1994, the Company entered into an Employment Agreement with Glenn R. Jones (the "Employment Agreement") pursuant to which the Company agreed to employ Mr. Jones as Chief Executive Officer of the Company for a period of up to eight years. Under the terms of the Employment Agreement, Mr. Jones is to receive a base compensation of $2,500,000 in fiscal year 1995 (which approximates his fiscal year 1994 combined compensation from the Company and Spacelink), with an annual cost of living index based adjustment. In addition, Mr. Jones is entitled to participate in the Company's bonus, stock option and other employee plans at a level generally commensurate with his previous participation. No other employee of the Company has an employment agreement with the Company. Compensation Committee Interlocks and Insider Participation A compensation committee was established in January 1995. Glenn R. Jones, Donald L. Jacobs and Philip R. Ladouceur were the initial members of the compensation committee. Mr. Ladouceur resigned as a director and as a member of the compensation committee on September 21, 1995. Glenn R. Jones, Derek H. Burney and Donald L. Jacobs are the current members of the compensation committee. Mr. Jones is an executive officer and director of the Company, and Messrs. Burney and Jacobs are directors of the Company. Mr. Jones also serves as a director of Bell Canada International Inc., and Mr. Burney is an executive officer of Bell Canada International Inc. Glenn R. Jones, James B. O'Brien, Timothy J. Burke and Elizabeth M. Steele, executive officers of the Company, serve as directors of certain of the Company's affiliates. As individuals, these executive officers had no transactions with the Company. 11 12 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT The following table sets forth certain information as of April 1, 1996, regarding ownership of the Company's Common Stock or Class A Common Stock by persons (including any group) known to the Company to be beneficial owners of more than 5% of either class of stock, the individual directors of the Company, each of the executive officers named in the Summary Compensation Table of the Company's Annual Report on Form 10-K, and the executive officers and directors of the Company as a group. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security which that person has the right to acquire within 60 days.
AMOUNT AND NATURE NAME AND ADDRESS OF OF BENEFICIAL BENEFICIAL OWNER (1) TITLE OF CLASS OWNERSHIP (2) PERCENT OF CLASS -------------------- -------------- ------------- ---------------- Jones International, Ltd. Common Stock 2,441,751(3)(4) 47.76 9697 East Mineral Avenue Englewood, CO 80112 Class A 2,447,568(3)(5) 9.32 Common Stock Glenn R. Jones Common Stock 2,916,151(3)(6) 57.03 9697 East Mineral Avenue Englewood, CO 80112 Class A 2,954,382(3)(7) 11.13 Common Stock Derek H. Burney Class A 350 less than .01 1000 rue de la Common Stock Gauchetiere West Montreal, Quebec, Canada H3B 4Y8 Timothy J. Burke Common Stock 196 less than .01 9697 East Mineral Avenue Englewood, CO 80112 Class A 4,525(8) .02 Common Stock Kevin P. Coyle Common Stock 345(9) .01 9697 East Mineral Avenue Englewood, CO 80112 Class A 4,513(10) .02 Common Stock
12 13 William E. Frenzel Class A 400 less than .01 1775 Massachusetts Ave., N.W. Common Stock Washington, D.C. 20036 James J. Krejci Class A 5,000 .02 1133 Race Street, 16N Common Stock Denver, CO 80206 Christine Jones Marocco Common Stock 2,749,679(11) 53.78 25 East End Avenue, #14F New York, NY 10288 Class A 90,757(12) .35 Common Stock James B. O'Brien Class A 26,049(13) .10 9697 East Mineral Avenue Common Stock Englewood, CO 80112 Daniel E. Somers Class A 100 less than .01 Bell Cablemedia House Common Stock Upton Road Watford Hertfordshire WD1 7EL Elizabeth M. Steele Class A 1,500(14) .01 9697 East Mineral Avenue Common Stock Englewood, CO 80112 Raymond L. Vigil Common 180 less than .01 9697 East Mineral Avenue Englewood, CO 80112 Class A 5,427(15) .02 Common Stock Ruth E. Warren Common Stock 208 less than .01 9697 East Mineral Avenue Englewood, CO 80112 Class A 10,918(16) .04 Common Stock Robert B. Zoellick Class A 300 less than .01 3900 Wisconsin Avenue, N.W. Common Stock Washington, D.C. 20016 All executive officers and Common Stock 2,955,621 57.81 directors as a group (21 persons) Class A 3,110,873(17) 11.71 Common Stock
13 14 Mutuelles AXA group Class A 1,356,200(18)(23) 5.16 Vie Mutuelle Common Stock 101-100 Terrasse Boieldieu 92042 Paris La Defense France AXA 23, Avenue Matignon 75008 Paris France The Equitable Companies Incorporated 787 Seventh Avenue New York, New York 10019 Bell Canada International Common Stock 2,878,151(19)(23) 56.29 BVI VI Limited Arawak Chamber Road Town Tortola, BVI Bell Canada International Class A 9,987,500(20)(23) 38.03 BVI III Limited Common Stock Arawak Chamber Road Town Tortola, BVI The Capital Group Companies, Inc. Class A 1,462,000(21)(23) 5.57 and Common Stock Capital Research 333 South Hope Street Los Angeles, CA 90071 Neuberger & Berman Class A 2,185,672(22)(23) 8.32 605 Third Avenue Common Stock New York, NY 10158
(1) Directors and executive officers named in the Summary Compensation Table who are not listed in the table do not beneficially own any of the Company's shares. Shares shown as subject to options means that such options are exercisable within 60 days. (2) Unless otherwise noted, all persons indicated in the table have full voting and investment power with respect to the share ownership described. (3) Glenn R. Jones, Chairman of the Board of Directors and Chief Executive Officer of the Company, owns all of the outstanding shares of Jones International, Ltd. ("International") and is deemed to be the beneficial owner of all shares of the Company owned by International. By virtue of this ownership, Mr. Jones controls approximately 41% of the total votes to be cast by all shareholders of the Company's 14 15 shares on matters not requiring a class vote, because, with regard to such matters, a share of Common Stock has one vote and a share of Class A Common Stock has 1/10th of a vote. The holders of Class A Common Stock, as a class, are able to elect the greater of 25% or the next highest whole number of the Company's Board of Directors. Thus, holders of the Class A Common Stock, as a class, are presently entitled to elect four Directors. (4) Includes 38,000 shares held by Jones International, Ltd.; 2,239,416 shares held by the Jones International Grantor Business Trust; 100,400 shares held by Jones Entertainment Group, Ltd.; 35,707 shares held by Jones Space Segment, Inc.; 27,585 shares held by Jones Global Group, Inc.; and 643 shares held by Jones Interdigital, Inc. International may be deemed to be the beneficial owner of all shares of Common Stock owned by Jones Entertainment Group, Ltd., Jones Space Segment, Inc., Jones Global Group, Inc. and Jones Interdigital, Inc. (5) Includes 2,223,414 shares held by International; 136,946 shares held by Jones Entertainment Group, Ltd., 48,705 shares held by Jones Space Segment, Inc., 37,626 shares held by Jones Global Group, Inc.; and 877 shares held by Jones Interdigital, Inc. International may be deemed to be the beneficial owner of all shares of Class A Common Stock owned by Jones Entertainment Group, Ltd., Jones Space Segment, Inc., Jones Global Group, Inc. and Jones Interdigital, Inc. (6) Includes 474,400 shares held by the Glenn Jones Grantor Business Trust; 38,000 shares held by Jones International, Ltd.; 2,239,416 shares held by the Jones International Grantor Business Trust; 100,400 shares held by Jones Entertainment Group, Ltd.; 35,707 shares held by Jones Space Segment, Inc.; 27,585 shares held by Jones Global Group, Inc.; and 643 shares held by Jones Interdigital, Inc. (7) Includes 236,893 shares owned by Mr. Jones; 269,921 shares deemed to be held by Mr. Jones pursuant to exercisable stock options; 2,223,414 shares held by International; 136,946 shares held by Jones Entertainment Group, Ltd.; 48,705 shares held by Jones Space Segment, Inc.; 37,626 shares held by Jones Global Group, Inc.; and 877 shares held by Jones Interdigital, Inc. (8) Includes 3,992 shares deemed to be held by Mr. Burke pursuant to exercisable stock options. (9) Includes 320 shares held by Mr. Coyle's wife. (10) Includes 4,444 shares deemed to be held by Mr. Coyle pursuant to exercisable stock options. (11) Includes 8,799 shares held by Mrs. Marocco; 357 shares held by the Joseph Michael Marocco Irrevocable Trust; 26,707 held by the Christine Jones Marocco Irrevocable Trust; 2,239,416 shares held by the Jones International Grantor Business Trust in which Mrs. Marocco has shared voting power; and 474,400 shares held by the Glenn Jones Grantor Business Trust in which Mrs. Marocco has shared voting power. (12) Includes 44,972 shares held by Mrs. Marocco; 970 shares held by the Joseph Michael Marocco Irrevocable Trust; 34,815 shares held by the Christine Jones Marocco Irrevocable Trust; and 10,000 shares held by Mrs. Marocco's husband. Mrs. Marocco disclaims beneficial ownership of the shares held by her husband. Mrs. Marocco's husband is a principal in a firm that may from time to time invest in the Company's securities. Mrs. Marocco disclaims beneficial ownership of any securities of the Company that said firm purchases or in which Mr. Marocco may therefor have an interest. (13) Includes 16,049 shares deemed to be held by Mr. O'Brien pursuant to exercisable stock options. (14) Represents shares deemed to be held by Ms. Steele pursuant to an exercisable stock option. (15) Includes 4,939 shares deemed to be held by Mr. Vigil pursuant to exercisable stock options. 15 16 (16) Includes 5,854 shares deemed to be held by Ms. Warren pursuant to exercisable stock options. (17) Includes 313,451 shares deemed to be held by various executive officers and directors pursuant to exercisable stock options. (18) The Mutuelles AXA group includes AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, Alpha Assurances I.A.R.D. Mutuelle, Alpha Assurances Vie Mutuelle and Uni Europe Assurance Mutuelle. The Mutuelles AXA group, AXA and The Equitable Companies Incorporated have sole voting power over 1,341,700 shares and sole dispositive power over 1,356,200 shares. (19) Bell Canada International Inc. ("BCI"), the sole shareholder of Bell Canada International BVI III Limited, may be deemed to have beneficial ownership of the 2,878,151 shares of Common Stock covered by Option Agreements dated December 20, 1994 among Morgan Guaranty Trust Company of New York, acting as agent for BCI, and the Glenn Jones Grantor Business Trust, the Jones International Grantor Business Trust, Jones Entertainment Group, Ltd., Jones Space Segment, Inc., Jones Global Group, Inc. and Jones Interdigital, Inc. (20) Bell Canada International BVI III Limited is a wholly-owned subsidiary of Bell Canada International Inc., 1000 de la Gauchetiere Street West, Suite 1100, Montreal, Quebec, Canada H3B 4Y8. (21) Capital Guardian Trust Company and Capital Research and Management Company, operating subsidiaries of The Capital Group Companies, Inc., exercised as of December 29, 1995, investment discretion with respect to 482,000 and 980,000 shares, respectively, which was owned by various institutional investors. (22) Neuberger & Berman has sole voting power over 597,720 shares, shared voting power over 1,273,400 shares and shared dispositive power over 2,185,672 shares. (23) This information is based upon filings made by the shareholders with the Securities and Exchange Commission, copies of which were provided to the Company. ITEM 13. CERTAIN TRANSACTIONS Set forth below is a description of the Company's transactions with Jones International, Ltd., certain of its subsidiaries and certain other affiliates of the Company during the year ended December 31, 1995. While the Company believes that these transactions generally are as favorable as could have been obtained from unaffiliated third parties, in most instances no third party bids or appraisals were obtained and certain of the transactions are by their nature unique to the companies involved. Accordingly, no assurance is given to such effect. In some instances the amounts of transactions have been rounded to the nearest thousand. Certain of the transactions described below are expected to continue during the current fiscal year. JONES INTERNATIONAL, LTD. Jones International, Ltd. ("International") and certain of its subsidiaries provide various services to the Company and its managed limited partnerships, including information and data processing services, office space and programming services, as described below. The costs of these services are charged to the Company, and the Company reimburses International 16 17 accordingly. In some cases, a portion of certain of these expenses are reallocated to the limited partnerships managed by the Company pursuant to the terms of the limited partnership agreements of such limited partnerships. JONES FINANCIAL GROUP, LTD. Jones Financial Group, Ltd. ("Financial Group") performs services for the Company as its agent in connection with negotiations regarding various financial arrangements of the Company. Financial Group is owned 81% by International and 19% by Glenn R. Jones. In December 1994, the Company entered into a Financial Services Agreement with Financial Group pursuant to which Financial Group has agreed to render financial advisory and related services to the Company for a fee equal to 90% of the fees that would be charged to the Company by unaffiliated third parties for the same or comparable purposes. The Company will pay Financial Group an annual $1,000,000 retainer as an advance against payments due pursuant to this agreement and will reimburse Financial Group for its reasonable out-of-pocket expenses. The term of the Financial Services Agreement is for eight years. Financial Group and BCI have entered into a separate agreement pursuant to which BCI is entitled to receive one-half of the net fees earned (gross fees less reasonable and customary operating expenses) by Financial Group under the Financial Services Agreement. During the year ended December 31, 1995, the Company paid Financial Group a fee of $1,328,400 upon the Company's acquisition of the Dale City System. JONES COMPUTER NETWORK, LTD. Jones Computer Network, Ltd. ("JCN") is a subsidiary of Jones Education Networks, Inc., which is controlled by International. The Company and JCN have entered into an Affiliation Agreement whereby JCN provides computer related video programming to cable television systems owned by the Company and its managed partnerships. JCN charges a fee based upon the number of subscribers receiving the programming. Payments to JCN by the Company with respect to programming provided to cable television systems owned by the Company for the year ended December 31, 1995 totaled approximately $488,000. MIND EXTENSION UNIVERSITY, INC. Cable television systems owned by the Company and its managed partnerships distribute the video programming of Mind Extension University, Inc. ("ME/U"), which is controlled by International, for a fee based upon the number of subscribers receiving the programming. Payments by the Company to ME/U with respect to programming provided to cable television systems owned by the Company for the year ended December 31, 1995 totaled approximately $196,000. PRODUCT INFORMATION NETWORK, INC. Product Information Network, Inc. ("PIN") is an affiliate of International that provides a satellite programming service. PIN shows product infomercials 24 hours a day, seven days a 17 18 week. A portion of the revenues generated by PIN are paid to the cable television systems that carry PIN's programming. Most of the Company's owned cable television systems carry PIN for all or part of each day. Aggregate payments received by the Company from PIN relating to the Company's owned cable television systems totaled approximately $300,000 for the year ended December 31, 1995. JONES INTERACTIVE, INC. Jones Interactive, Inc. ("Interactive"), a wholly owned subsidiary of International, provides information management and data processing services for all companies affiliated with International. Charges to the various operating companies are based on usage of computer time by each entity. The amount charged to the Company and its managed partnerships by Interactive for the year ended December 31, 1995 totaled $6,439,000. Approximately 25% of this amount was paid by the Company, and the remainder was allocated to and paid by the Company's managed partnerships. JONES PROPERTIES, INC. Jones Properties, Inc. is a wholly-owned subsidiary of International. The Company is a party to a lease with Jones Properties, Inc. under which the Company has leased a 101,500 square foot office building in Englewood, Colorado. The lease agreement, as amended, has a 15-year term expiring July 2000, with three 5-year renewal options. The annual rent is not to exceed $24.00 per square foot, plus operating expenses. The Company has subleased approximately 49% of the building to International and certain other affiliates on the same terms and conditions of the above-mentioned lease. Rent payments to Jones Properties, Inc. by the Company, net of subleasing reimbursements, for the year ended December 31, 1995 were approximately $1,645,000. Approximately 21% of this amount was paid by the Company, and the remainder was allocated to and paid by the Company's managed partnerships. _______________ In addition to the foregoing described transactions, the Company has engaged in certain transactions in connection with the acquisition by BCI of shares of the Company's Class A Common Stock. The transactions described below are expected to remain in force during the Company's current calendar year. On December 20, 1994, contemporaneous with the closing of the acquisition by BCI of shares of the Company's Class A Common Stock, 1. International and Glenn R. Jones and certain affiliates of International (collectively, the "Grantors") entered into option agreements providing for the grant of options to Morgan Guaranty Trust Company of New York, acting as agent for BCI, to purchase all of the 18 19 shares of the Company's Common Stock then held, directly or indirectly, by International, Mr. Jones and the affiliates of International in consideration for the payment by BCI to the Grantors of an option deposit of $19.00 for each share of the Company's Common Stock owned by Grantors on the date of the execution of the option agreements. This option deposit payment resulted in the Grantors receiving approximately $54,684,869 from BCI. 2. The Company entered into an Employment Agreement with Glenn R. Jones (the "Employment Agreement") pursuant to which the Company agreed to employ Mr. Jones as Chief Executive Officer of the Company for a period of up to eight years. Under the terms of the Employment Agreement, Mr. Jones is to receive a base compensation of $2,500,000 in fiscal year 1995 (which approximates his fiscal year 1994 combined compensation from the Company and Spacelink), with an annual cost of living index based adjustment. In addition, Mr. Jones is entitled to participate in the Company's bonus, stock option and other employee plans at a level generally commensurate with his previous participation. No other employee of the Company has an employment agreement with the Company. 3. BCI, International, Glenn R. Jones and the Company entered into certain arrangements concerning the operation and governance of the Company and other related matters pursuant to a Shareholders Agreement ("Shareholders Agreement"). Certain provisions of the Shareholders Agreement grant to Mr. Jones, International and their affiliates the right to use a number of channels on cable television systems now or hereafter owned or controlled by the Company for distribution of their programming networks for a period of 15 years after December 1994; BCI was also granted a similar right for a fewer number of channels. International was granted certain non-exclusive rights to provide the Company with goods and services on competitive terms which will, at the Company's discretion, be pursuant to competitive bidding or other processes. BCI was granted identical rights pursuant to a Supply and Services Agreement among the Company and BCI. 4. The Company entered into a Supply and Services Agreement with BCI. Pursuant to the Supply and Services Agreement, BCI will provide the Company with access to the expert advice of personnel from BCI and its affiliates for the equivalent of three man-years on an annual basis. The Company will pay an annual fee of $2,000,000 to BCI during the term of the agreement. Payments made by the Company under the Supply and Services Agreement during the year ended December 31, 1995 totaled $2,000,000. 5. The Company entered into a Secondment Agreement with BCI. Pursuant to the Secondment Agreement, BCI provided nine secondees during 1995. These secondees worked for the Company and its managed partnerships. The Company reimbursed BCI for the full employment costs of such individuals. The Company reimbursed BCI $823,000 during the year ended December 31, 1995. Approximately 21% of this amount was paid by the Company, and the remainder was allocated to and paid by the Company's managed partnerships. 19 20 The Company has equity investments in the following affiliated entities: 1. The Company owns a 38% interest in Jones Global Group, Inc. ("Jones Global Group"), a Colorado corporation which is 62% owned by International. On July 22, 1994, Jones Global Group and certain of Jones Global Group's wholly owned subsidiaries transferred all of their interests in their cable/telephony properties in the United Kingdom to Bell Cablemedia plc, a public limited company incorporated under the laws of England and Wales, in exchange for 3,663,584 American Depository Shares ("ADSs") representing 18,317,920 Ordinary Shares of Bell Cablemedia. In July 1994, Jones Global Group sold 1,100,000 ADSs. In 1995, Jones Global Group sold an additional 444,200 ADSs. 2. On July 22, 1994, the Company and certain of its wholly owned subsidiaries transferred all of their interests in their cable/telephony properties in the United Kingdom to Bell Cablemedia plc in exchange for 6,035,648 ADSs representing 30,178,240 Ordinary Shares of Bell Cablemedia. As a result of this transaction, the Company no longer owns any direct interest in cable/telephony properties in the United Kingdom. Jones Spanish Holdings, Inc. ("Spanish Holdings") is an affiliate indirectly owned 38% by the Company and 62% by International. On October 13, 1994, Spanish Holdings and Jones International Spanish Investments, Inc., a subsidiary of International, transferred all of their interests in their cable/telephony properties in Spain to Bell Cablemedia in exchange for a total of 190,148 ADSs representing 950,740 Ordinary Shares of Bell Cablemedia. Such shares subsequently were transferred to the Company in repayment of advances made to finance such affiliates' Spanish operations. As a result of this transaction, the Company and its affiliates no longer own any direct interest in cable/telephony properties in Spain. The 6,225,796 ADSs of Bell Cablemedia plc held by the Company are now considered available for sale because of an effective shelf registration statement that is available to the Company. 3. The Company is the general partner of Jones Intercable Investors, L.P., a Colorado limited partnership, which was formed on September 18, 1986, and the Company owns a 1% general partner interest. In a series of transactions, the Company purchased limited partnership units, giving the Company an approximate 19% limited partner interest in Jones Intercable Investors, L.P. The Company's net investment in this partnership totaled approximately $3,982,000 at December 31, 1995. Based upon the quoted market price of $12.38 per unit at December 31, 1995, the quoted market value of this investment was approximately $19,709,000. 4. During 1992, the Company invested $10,000,000 in ME/U for 25% of the stock of ME/U, which also received certain advertising avails and administrative and marketing considerations from the Company. The number of shares of Class A Common Stock of ME/U issued to the Company was based on the average of two separate independent appraisals of ME/U. Through the Company's acquisition of the assets of Jones Spacelink, Ltd. in December 1994, the Company obtained an additional 13% interest in MEU. In 1993, 1994 and 1995, the Company advanced a total of $20,000,000 to ME/U. On April 11, 1995, the Company converted its advances to ME/U into shares of the Class A Common Stock of Jones Education Networks, Inc. ("JEN") for an approximate 17% equity interest in JEN. JEN 20 21 is an affiliate of International and, in addition to its 51% ownership of ME/U, JEN owns an 81% interest in Jones Computer Network, Ltd. 5. The Company and Jones Cyber Solutions, Ltd. ("JCS"), an indirect subsidiary of International, have formed a venture, known as Jones Customer Service Management, L.L.C., for the purpose of developing a subscriber billing and management system. As of December 31, 1995, the Company had invested $5,200,000 in the venture. JCS is performing the basic system development work for the venture and is being paid periodically on a time and materials basis, plus 10% of the amount charged, for its own service. Upon the completion of the billing and management system software, the Company and JCS will have license rights to use such system in perpetuity. The venture will also perform additional services for the Company in the implementation of the new subscriber billing and management system. The venture intends to subcontract such maintenance and conversion services to JCS on the basis of time and materials plus 10% of the amount of the JCS services. The venture will grant to JCS the exclusive right to distribute the system to third parties for a period of five years for a commission on the license fees to be earned by the venture from such licensing. 21 22 SIGNATURES Pursuant to the requirements of the Securities Act of 1934, as amended, the Company has duly caused this Amendment No. 1 to its Form 10-K Transitional Report to be signed on its behalf by the undersigned hereunto duly authorized. JONES INTERCABLE, INC. By: /s/ Glenn R. Jones ----------------------------- Glenn R. Jones Dated: April 23, 1996 Chairman of the Board and Chief Executive Officer 22 -----END PRIVACY-ENHANCED MESSAGE-----