<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________
FORM 10-K/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM________ TO_________
FOR THE YEAR ENDED DECEMBER 31, 1997 COMMISSION FILE NUMBER 000-21091
___________________
ADVANCED RADIO TELECOM CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 52-1869023
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
500 108TH AVENUE, NE
SUITE 2600
BELLEVUE, WASHINGTON 98004
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(425) 688-8700
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
_____________
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
--------------------- ---------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
TITLE OF EACH CLASS: COMMON STOCK ($.001 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 [_] .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X] .
The aggregate market value of the registrant's voting stock held by non-
affiliates was approximately $293 million on April 15, 1998, based on the
closing sales price of the registrant's common stock ("Common Stock") as
reported on the Nasdaq National Market as of such date.
The number of shares outstanding of each of the registrant's classes of Common
Stock as of April 15, 1998 was as follows:
Common Stock, $.001 par value: 22,235,103
DOCUMENTS INCORPORATED BY REFERENCE
None. Advanced Radio Telecom Corp. hereby amends its Annual Report on Form
10-K for the year ended December 31, 1997, filed with the Commission on March
30, 1998, by adding the information required by Part III (Items 10, 11, 12 and
13).
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<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The following five persons were the non-employee directors of the Company
as of April 29, 1998:
James C. Cook, 38, has been a director of the Company since 1996. He has
been senior vice president of First Union Capital Partners, Inc., private equity
investment affiliate of First Union Corporation, since 1995 and was as a vice
president of First Union Capital Partners, Inc. from 1989 to 1995.
Mark C. Demetree, 41, has been a director of the Company since 1995. He
has been president of North American Salt Company since 1993 and was president
of Trona Railway Company from 1991 to 1993. He also serves as a director of
J.C. Nichols Company.
Andrew I. Fillat, 50, has been a director of the Company since 1995. He has
been managing director of Advent International Corporation, a global venture
capital and private equity management firm since 1995 and was vice president of
Advent from 1989 to 1995. He also serves as a director of Interlink Computer
Sciences, Lightbridge, Inc. and Voxware, Inc.
James B. Murray, 51, has been a director of the Company since 1997. He has
been managing director of Columbia Capital Corporation since March 1989 and was
president of Randolph Cellular Corp., a cellular communications company, from
1990 to 1993. He also serves as a director of Saville Systems PLC and The
Columbia Group Incorporated.
Alan Z. Senter, 56, has been a director of the Company since 1996. He has
been chairman of Senter Associates, a financial advisory firm since 1996 and
from 1993 to 1994 and was executive vice president and Chief Financial Officer
of NYNEX Corporation from 1994 to 1996, executive vice president and Chief
Financial Officer of GAF/ISP Corporation from 1992 to 1993. He also serves as a
director or Exec Ltd. and InterVu Inc.
EXECUTIVE OFFICERS
The information required by this item with respect to executive officers is
included in Part 1 of this report under the caption "Executive Officers of the
Registrant."
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ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth information with respect to compensation
paid to or accrued in each of the last three completed fiscal years, if
applicable, on behalf of the Chief Executive Officer and each of the four other
most highly paid executive officers of the Company who were serving as executive
officers on December 31, 1997 and one other individual who would have been one
of the four most highly paid executive officers of the Company but for the fact
that he was not serving as an executive officer on December 31, 1997 (the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
----------------
ANNUAL COMPENSATION SECURITIES
-------------------------- UNDERLYING ALL OTHER
YEAR SALARY BONUS OPTIONS(#)(1) COMPENSATION
---- ----------- ------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Henry C. Hirsch (2)............... 1997 $ 54,168(3) $54,167 800,000 $ 113(4)
Chairman, President and Chief 1996 __ __ __ __
Executive Officer 1995 __ __ __ __
Vernon L. Fotheringham (5)........ 1997 $274,992 $50,000 -- $ 44(4)
Vice Chairman 1996 $250,000 -- -- --
1995 $ 90,000 -- -- --
Thomas A. Grina................... 1997 $210,600 -- 228,666 $ 26(4)
Executive Vice President and 1996 $122,190(3) -- 181,818 $25,000(6)
Chief Financial Officer 1995 __ -- -- --
James D. Miller,.................. 1997 $157,500 -- 36,364 $ 113(4)
Senior Vice President 1996 $135,000(3) -- 36,364 --
Sales and Marketing 1995 -- -- 18,182 --
Richard A. Shields, Jr.(7)........ 1997 $153,750 -- 54,545 $ 26(4)
Senior Vice President 1996 $ 93,777(3) -- 14,545 --
Technical Operations 1995 -- -- -- --
Thomas M. Walker.................. 1997 $110,000 -- 35,000 $ 10(4)
Vice President 1996 $ 44,736(3) $10,625 7,273 $ 2,943(6)
General Counsel 1995 -- -- -- --
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</TABLE>
(1) On July 31, 1997, the Board of Directors canceled certain options granted
under the Company's Restated Equity Incentive Plan (the "Equity Incentive
Plan") and issued new options in lieu thereof with a lower exercise price
of $7.875, the fair market value of the Common Stock on that date.
(2) Mr. Hirsch joined the Company in November 1997.
(3) Reflects compensation for a partial year. See "--Employment Agreements."
(4) Reflects payment of term life insurance premiums.
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(5) Mr. Fotheringham resigned his position as Chairman, President and Chief
Executive Officer and was elected vice chairman of the Company effective
November 1997. He resigned his position as vice chairman in April 1998, and
his employment with the Company will terminate in May 1998. Mr.
Fotheringham will continue to serve as a director of the Company.
(6) Reflects the reimbursement of moving expenses.
(7) Mr. Shields ceased being an executive officer of the Company in December
1997, and his employment with the Company terminated effective January 15,
1998.
OPTION GRANTS
The following table sets forth certain information regarding stock option
grants made to the Named Executive Officers during the fiscal year ended
December 31, 1997. No grants were made during 1997 to Mr. Fotheringham.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
POTENTIAL REALIZATION VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM (1)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ----------------------------
GRANTED FISCAL YEAR PER SHARE (2) DATE 5% 10%
----------- ------------- -------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Henry C. Hirsch 600,000 31.9% $8.875 10/17/02 $1,462,991 $3,295,000
200,000 10.6% 12.50 10/17/02 -- 342,550
Thomas A. Grina 46,848 2.5% 7.125 8/21/02 92,221 203,783
181,818 9.7% 7.875 7/30/02 395,584 874,138
James D. Miller 36,364 1.9% 7.875 7/30/02 79,118 174,830
Richard A. Shields, Jr. (3) 54,545 2.9% 7.875 7/30/02 118,674 262,240
Thomas M. Walker 35,000 1.9% 7.875 7/30/02 76,150 168,272
</TABLE>
______________
(1) The potential realizable value is calculated based on the term of the
option at its time of grant. It is calculated by assuming that the stock
price on the date of grant appreciates at the indicated annual rate,
compounded annually for the entire term of the option.
(2) On July 31, 1997, the Board of Directors canceled certain options granted
under the Equity Incentive Plan and issued new options in lieu thereof with
a lower exercise price of $7.875, the fair market value of the Common Stock
on that date.
(3) In connection with the termination of Mr. Shields employment, 36,545 of
these options terminated on January 15, 1998 and the remaining 18,000 will
terminate on January 14, 2000.
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AGGREGATE STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth the number and value as of December 31, 1997
of shares underlying unexercised options held by each of the Named Executive
Officers. As of December 31, 1997, Mr. Fotheringham held no options, and no
stock options had been exercised by any of the Named Executive Officers.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY-OPTIONS AT
FISCAL YEAR END FISCAL YEAR END(1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Henry C. Hirsch -- 800,000 -- $ 0
Thomas A. Grina 45,455 183,211 $ 5,682 $58,037
James D. Miller 20,001 34,545 $38,852 $28,548
Richard A. Shields 13,636 40,908 $ 1,705 $ 5,114
Thomas M. Walker 8,750 26,250 $ 1,094 $ 3,281
- --------------
</TABLE>
(1) Based on the last sales price of the Company's Common Stock reported on the
Nasdaq National Market on December 31, 1997 of $8.00 per share, less the
exercise price payable upon exercise of such options.
DIRECTOR COMPENSATION
Each director who is not a full-time employee of the Company or one of its
subsidiaries receives $4,000 per year for services rendered as a director, $500
for each board meeting attended and $500 for each committee meeting attended
("Director Fees").
Also, non-employee directors are eligible to participate in the 1997 Equity
Incentive Plan for Non-Employee Directors (the "1997 Directors Plan"). Each
eligible director received an initial grant of options to purchase 20,000 shares
of Common Stock, and each newly elected non-employee director will receive a
similar grant upon his or her first appointment or election to the Board of
Directors. In addition, each non-employee director will be granted options to
purchase 7,000 shares of Common Stock at each annual meeting at which such
director is reelected or is continuing as a director. These options have an
exercise price equal to the fair market value of the Common Stock on the date of
the grant, expire five years after the date of grant, and become exercisable on
the day before each of the first, second and third annual stockholders meeting
following the date of grant. Also, each eligible director may elect annually in
advance to receive Director Fees in the form of deferred grants of Common
Stock, rather than cash, payable on the earlier of (i) the first business day of
the third January following the date of grant, (ii) a change of control of the
Company or (iii) the date the eligible director ceases to be a director of the
Company.
EMPLOYMENT AGREEMENTS
On October 17, 1997, the Company entered into an employment agreement with
Henry C. Hirsch, providing for full-time employment as Chairman, President and
Chief Executive Officer through December 31, 2000 at a salary at the annual rate
of $325,000 for 1997 and 1998, $350,00 for 1999 and $400,000 for 2000. Under
the agreement, Mr. Hirsch is guaranteed an annual bonus of at least $54,167 for
1997, $325,000 for 1998 and $87,500 for 1999. The agreement further provides
that Mr. Hirsch's annual targeted bonus for years other than 1997 and 1998 will
be not less than 50% of his base salary, and that his maximum incentive bonus
will be 100% of his base salary, pursuant to such bonus or incentive
compensation plan as is available to executives of the Company generally or, if
there is no such plan,
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<PAGE>
as determined by the Board or Directors based on performance criteria set
annually. Pursuant to the agreement, Mr. Hirsch was granted five-year stock
options under the Equity Incentive Plan for an aggregate of 800,000 shares of
Common Stock, of which 600,000 will be exercisable at $8.875 per share, the fair
market value on the day of the grant, and 200,000 will be exercisable at $12.50
per share. The Company also granted Mr. Hirsch 100,000 shares of deferred stock
deliverable on January 2, 2001. The Company also loaned Mr. Hirsch $887,500 to
purchase 100,000 shares of Company Common Stock at $8.875 per share with
interest at the minimum applicable federal rate, payable over five years and
secured by the shares purchased. The Company has also agreed to pay Mr. Hirsch
$300,000 for relocation expenses. The agreement precludes Mr. Hirsch from
competing with the Company for two years after the cessation of his employment,
or a period equal to the length of his employment up to two years, if he is
terminated without cause. The agreement may be terminated at any time by either
party and provides that, if the Company terminates Mr. Hirsch without cause, Mr.
Hirsch's employment is terminated due to his disability or death, or Mr. Hirsch
terminates his employment as a result of constructive termination, Mr. Hirsch
will be entitled to continue to receive the full amount of his base salary and
bonus (at the guaranteed amount for 1997 and 1998 and at the target amounts for
1999 and 2000) for the remainder of the agreement term or, if Mr. Hirsch is
terminated after December 31, 1999, to be paid his base salary and target bonus
in effect for 2000 for twelve months. Upon such termination, Mr. Hirsch will
also be entitled to receive medical and term life insurance for the remainder of
the employment term, but no less than twelve months and no more than eighteen
months following termination. In addition, all options granted to Mr. Hirsch not
yet vested will vest and remain exercisable for the lesser of one year or their
original term.
On October 17, 1997, the Company also entered into a Change of Control
Agreement with Mr. Hirsch entitling him to certain benefits if his employment
with the Company is terminated, other than for cause or his disability or death,
or if he resigns for good reason within 24 months of any change of control of
the Company. Upon such a termination, the agreement provides that: (i) the
Company will pay Mr. Hirsch a cash payment equal to his annual base salary at
the time of termination, to the extent not theretofore paid for the year, plus a
prorated portion of his maximum incentive bonus for the year and any accrued and
unpaid vacation pay; (ii) any stock, stock option or other awards granted to Mr.
Hirsch by the Company will immediately vest and become exercisable in full and
shall remain exercisable for the lesser of four years or their original term;
(iii) the Company will pay to Mr. Hirsch a cash payment equal to the greater of
(a) Mr. Hirsch's aggregate base salary plus maximum incentive compensation for
the period from termination through December 31, 2000 and (b) two times his base
salary rate at the date of termination plus either his maximum incentive
compensation for the year in which termination occurs or his maximum incentive
compensation in effect immediately prior to the change of control, whichever is
higher; (iv) the Company will continue to insure Mr. Hirsch and his dependents
in the Company's life and medical insurance plans for up to two years after
termination; and (v) Mr. Hirsch will be entitled to return the 100,000 shares of
Common Stock pledged to secure the promissory note described above in full
satisfaction of the promissory note if the fair market value of the Common Stock
is less than the amount due on the note.
On August 21, 1997, the Company entered into a two-year employment agreement
with Thomas A. Grina, providing for full-time employment as an executive officer
at an annualized base salary of $210,000 for 1997, $235,000 for 1998 and
$258,000 for 1999. Under the Agreement, Mr. Grina is eligible for an annual
target incentive bonus of not less than 50% of his annual salary. The agreement
precludes Mr. Grina from competing with the Company for one year after the
cessation of his employment. The agreement may be terminated by either party and
provides that, if Mr. Grina's employment is terminated by the Company other than
for cause or by Mr. Grina as a result of constructive termination, Mr. Grina
will be entitled to receive an amount equal to twelve months of his base salary
and bonus in effect at his termination and continuation of benefits to which he
would have otherwise been entitled for a period of twelve months from the date
of such termination, and all options granted to Mr. Grina will vest and remain
exercisable for three years.
The Company's employment agreement with James D. Miller provides for full-time
employment at an annual base salary of $150,000 and an annual bonus in
designated amounts based upon the achievement of specified performance goals.
The agreement has a term of three years expiring January, 1999 and precludes him
from competing with the Company for one year after the cessation of employment.
The employment agreement may be terminated at any time by the Company or Mr.
Miller and provides that, if the Company terminates Mr. Miller's employment
without cause
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<PAGE>
or his employment is terminated due to his disability or death, Mr. Miller will
receive the full amount of his base salary and any other benefits to which he
would have otherwise been entitled for a period of six months from the date of
such termination.
The Company's employment agreement with Mr. Fotheringham provided for his
full-time employment as vice chairman at an annualized base salary of $275,000
for 1997 and $300,000 for 1998. Under an October 1997 amendment to his
employment agreement, Mr. Fotheringham received a guaranteed bonus of $50,000
for 1997. Mr. Fotheringham's resigned from his position with the Company in
April 1998, and his employment with the Company will terminate in May 1998. He
will continue to serve as a director of the Company. The agreement precludes
Mr. Fotheringham from competing with the Company for one year after the
cessation of his employment.
The Company's employment agreement with Richard A. Shields provided for full-
time employment at an annual base salary of $110,000 and an annual bonus in
designated amounts based on the achievement of specified performance goals. The
agreement precludes him from competing with the Company for one year after the
cessation of employment. Mr. Shields' employment with the Company terminated
effective January 15, 1998. Mr. Shields is entitled to salary and benefit
continuation for three months from the date of termination. In connection with
the termination, 36,545 of Mr. Shields' options terminated on January 15, 1998
and the remaining 18,000 will terminate on January 14, 2000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Demetree, Murray and Fotheringham served on the Compensation
Committee during 1997. Mr. Fotheringham ceased to be a member of the
Compensation Committee in January 1998. Mr. Fotheringham was an executive
officer and employee of the Company until May 1998.
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<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information with respect to the
beneficial ownership of shares of Common Stock as of April 15, 1998 by (i) the
Named Executive Officers, (ii) each director of the Company, (iii) all executive
officers and directors of the Company as a group and (iv) each person (including
any "group" as that term is used in Section 13(d)(3) of the Exchange Act) known
to the Company to be the beneficial owner of more than five percent of the
outstanding Common Stock. Except as noted below, each of the persons listed has
sole investment and voting power with respect to the shares indicated:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
---------------------
NAME NUMBER PERCENT
---- --------- ---------
<S> <C> <C>
Advent International Corporation (1).. 1,321,511 6.0%
Columbia Capital Corporation (2)...... 1,338,278 6.1%
Commco, L.L.C. (3).................... 2,831,677 12.8%
Landover Holdings Corporation (4)..... 2,982,446 13.4%
James C. Cook (5)..................... 65,236 *
Mark C. Demetree (6).................. 393,609 1.8%
Andrew I. Fillat (7).................. 9,868 *
Vernon L. Fotheringham................ 1,039,187 4.7%
Thomas A. Grina (8)................... 70,455 *
Henry C. Hirsch....................... 100,000 *
James D. Miller (9)................... 35,001 *
James B. Murray, Jr. (10)............. 69,190 *
Alan Z. Senter (11)................... 16,303 *
Richard A. Shields, Jr.(12)........... 13,636 *
Thomas M. Walker(13).................. 16,250 *
Laurence S. Zimmerman (4)............. 2,982,446 13.4%
All executive officers and directors
as a group (14)..................... 1,828,735 9.0%
</TABLE>
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Unless otherwise indicated, the business address of each director and executive
officer named above is c/o Advanced Radio Telecom Corp., 500 108th Avenue NE,
Suite 2600, Bellevue, Washington 98004.
*Less than 1.0%.
(1) Includes 1,189,673 shares, 1,149 shares and 58,143 shares of Common Stock,
and 69,107 shares, 58 shares and 3,381 shares of Common Stock issuable upon
exercise of warrants, respectively, owned by Global Private Equity II, L.P.,
Advent International Investors II Limited Partnership and Advent Partners
Limited Partnership (collectively, the "Advent Partnerships"), each a
limited partnership whose general partner is controlled by Advent
International Corporation ("Advent"). Mr. Fillat is an officer of Advent.
The address of Advent and each of the Advent Partnerships is 101 Federal
Street, Boston, Massachusetts 02110.
(2) Includes 62,173 shares of Common Stock issuable upon exercise of warrants
owned by Columbia Capital Corporation ("Columbia Capital") and includes
357,166 shares, 116,826 shares and 802,113 shares owned by CCC Millimeter
L.P. ("CCC Millimeter"), Columbia Millimeter Communications, L.P.
("Millimeter") and Columbia Capital, respectively. Columbia Capital, as the
sole general partner of CCC Millimeter and Millimeter, has the power to vote
and dispose of the Common Stock held by CCC Millimeter and Millimeter.
Robert Blow, Mark J. Kington, David P. Mixer, James B. Murray and Mark R.
Warner share investment control of the shares held by such entities and may
be deemed to beneficially own such shares. Each of Messrs. Blow, Kington,
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Mixer, Murray and Warner disclaims beneficial ownership of the shares held
by such entities, except to the extent of such individual's interest in
such entities. The address of each of Columbia Capital, CCC Millimeter and
Millimeter is 0 Court Square, P.O. Box 1465, Charlottesville, VA 22902.
(3) Includes 54,191 shares of Common Stock issuable upon exercise of warrants.
The address of Commco, L.L.C. is 4513 Pin Oak Court, Sioux Falls, SD 57103.
(4) All of such securities are held in the Landover Voting Trust (as defined
below). Includes 15,672 shares of Common Stock issuable upon exercise of
warrants. Does not include 36,364 shares of Common Stock beneficially owned
by the wife of and 36,364 shares of Common Stock beneficially owned by a
family trust of Laurence S. Zimmerman, of which shares Landover Holdings
Corporation ("LHC") and Mr. Zimmerman disclaim beneficial ownership. LHC is
controlled by Mr. Zimmerman. LHC's address is 156 W. 56th Street, Suite
2000, New York, New York 10019. See "--Voting Trust Agreement."
(5) Includes 8,000 shares of Common Stock issuable upon exercise of warrants
and 9,868 shares of Common Stock issuable upon exercise of options
exercisable within 60 days of April 15, 1998.
(6) Includes 9,868 shares of Common Stock beneficially issuable upon exercise
of options exercisable within 60 days of April 15, 1998. Does not include
117,999 shares of Common Stock issuable upon exercise of warrants or
1,534,964 shares of Common Stock beneficially owned in each case by members
of Mr. Demetree's family or a trust for their benefit, of which he
disclaims beneficial ownership. Mr. Demetree's address is 3740 Beach Blvd.,
Suite 306, Jacksonville, FL 32207.
(7) Includes 9,868 shares of Common Stock issuable upon exercise of options
exercisable within 60 days of January 12, 1998. Does not include shares of
Common Stock and shares of Common Stock issuable upon exercise of warrants
held by the Advent Partnerships, of which Mr. Fillat disclaims beneficial
ownership, except for 2,495 shares of Common Stock and 32 shares issuable
upon exercise of warrants.
(8) Includes 70,455 shares of Common Stock issuable upon exercise of options
exercisable within 60 days of April 15, 1998.
(9) Includes 35,001 shares of Common Stock issuable upon exercise of an option
exercisable within 60 days of April 15, 1998.
(10) Includes 8,401 shares of Common Stock issuable upon exercise of options
exercisable within 60 days of April 15, 1998 Mr. Murray is a Managing
Director of Columbia Capital Corporation. Excludes shares held by Columbia
Capital, CCC Millimeter and Millimeter. See Footnote 2. Mr. Murray's
address is c/o Columbia Capital Corporation, 0 Court Square, P.O. Box 1465,
Charlottesville, VA 22902.
(11) Includes 16,301 shares of Common Stock issuable upon exercise of options
exercisable within 60 days of April 15, 1998.
(12) Includes 16,250 shares of Common Stock issuable upon conversion of stock
options exercisable within 60 days of April 15, 1998.
(13) Includes 8,750 shares of Common Stock issuable upon conversion of stock
options exercisable within 60 days of April 15, 1998.
(14) Includes 99,229 shares of Common Stock issuable upon exercise of options
exercisable within 60 days of April 15, 1998. Does not include 2,894,046
shares of Common Stock held in the Landover Voting Trust by trustees, all
of whom are directors of the Company and do not have beneficial ownership
of such shares. See "--Voting Trust Agreement."
VOTING TRUST AGREEMENT
Pursuant to a Voting Trust Agreement dated November 5, 1996, LHC and the
wife of and a trust for the benefit of the family of Laurence S. Zimmerman
deposited all of their shares of Common Stock in trust (the "Landover Voting
Trust") with Messrs. Demetree, Fillat and Fotheringham as trustees with
irrevocable instructions to vote such shares on all matters submitted to a vote
of the stockholders of the Company in proportion to, or in certain cases,
consistent with the majority of, the vote of other stockholders of the Company.
The voting trust will expire on November 5, 2006, but is subject to early
termination in the event of (i) a business combination in which the Company
stockholders own less than 50%, and the Company directors constitute less than
50% of the Board of
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<PAGE>
Directors, of the combined entity and LHC owns less than 5% of the voting power
of such entity, (ii) the death of Mr. Zimmerman or (iii) the sale by LHC of such
shares to unaffiliated parties. The trustees of the trust will be indemnified by
the Company. LHC retains the right to pledge or dispose of the Common Stock to
third parties. Any such shares of Common Stock transferred to an affiliate of
LHC will remain subject to the terms of the Landover Voting Trust. Any such
shares of Common Stock transferred to parties not affiliated with LHC will be
released from the Landover Voting Trust.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The following information regarding certain transactions with directors,
officers and holders of record or beneficially of more than five percent of the
Company's Common Stock does not include information for any period during which
such person or entity, as the case may be, was not an officer, director or five
percent holder.
PURCHASE OF LICENSES FROM COLUMBIA CAPITAL CORPORATION
In September of 1997, the Company entered into an agreement with Columbia
Capital and one of its affiliates to acquire certain 38 GHz authorizations in
exchange for 1,354,209 shares of Common Stock, with closing subject to FCC
approval. Upon the occurrence of certain contingencies, the agreement may also
require the Company to acquire additional 38 GHz authorizations in exchange for
an additional 220,107 shares of Common Stock. The agreement provides the
Company with a right of first offer with respect to any 38 GHz authorizations
that may be granted to Columbia Capital in the future.
COMMCO OPTION
In connection with the acquisition of certain 38 GHz licenses from
CommcoCCC, Inc. ("CommcoCCC"), in 1996, the Company gave Commco, L.L.C., a
stockholder of CommcoCCC, an option to acquire twelve 38 GHz FCC licenses in
specified markets, in which the Company has more than one license. Such option
was exercised in June 1997, with closing subject to FCC approval. The purchase
price will be paid by a non-recourse note and will be determined based on the
sales price of Common Stock on the day the option was exercised and the
population covered by the twelve licenses. The Company has the right to be a
reseller with respect to these licenses for a term of five years at market
rates.
PIERSON & BURNETT TRANSACTIONS
During the year ended December 31, 1997, the Company paid Pierson &
Burnett, L.L.P., a law firm of which W. Theodore Pierson, Jr., an executive
officer of the Company until March 1997, is a principal, approximately $666,695
for legal services.
LOAN TO HENRY C. HIRSCH
Pursuant to his employment agreement, in November 1997, the Company loaned
Mr. Hirsch, the Chairman of the Board of Directors and Chief Executive Officer
of the Company, $887,500 to purchase 100,000 shares of Common Stock at $8.875
per share, the fair market value of the stock on the date of the loan. The loan
bears interest at the minimum applicable federal rate, is payable over five
years, and is secured by the shares purchased. As of April 28, 1998, all of the
debt is outstanding.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED ON THIS 29TH DAY OF
APRIL 1998.
Advanced Radio Telecom Corp
Thomas A. Grina
By: /s/Thomas A. Grina
----------------------------
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE
/s/ Henry C. Hirsch Chairman, President, Chief April 29, 1998
- ------------------------------ Executive Officer and Director
HENRY C. HIRSCH
/s/ Vernon L. Fotheringham Vice Chairman and Director April 29, 1998
- ------------------------------
VERNON L. FOTHERINGHAM
/s/ James Cook Director April 29, 1998
- ------------------------------
JAMES COOK
/s/ Mark C. Demetree Director April 29, 1998
- ------------------------------
MARK C. DEMETREE
/s/ Andrew I. Fillat Director April 29, 1998
- ------------------------------
ANDREW I. FILLAT
/s/ James B. Murray, Jr. Director April 29, 1998
- ------------------------------
JAMES B. MURRAY, JR.
/s/ Alan Z. Senter Director April 29, 1998
- ------------------------------
ALAN Z. SENTER
/s/ Thomas A. Grina Executive Vice President, April 29, 1998
- ------------------------------ Chief Financial Officer
THOMAS A. GRINA
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